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Miami Florida Insurance Claim Law Blog

Florida homeowners face thousands of cancelled insurance policies

Florida homeowners have been dropped in large numbers by local insurance companies as many fear that premium rates will jump up in the year to come. Insurers shed around 87,000 policies in 2018, leaving many homeowners looking for new insurance to cover the gaps. These policy changes come after Hurricane Michael and Hurricane Irma led to $15 billion in property damage claims from insurance companies, according to the Office of Insurance Regulation in the state.

In addition to the hurricane damage claims, water damage claims also rose in 2018. According to state records, five of Florida's top 10 insurers of property had fewer policies outstanding in October 2018 than they did at the beginning of the year. Smaller companies based in the state are already forecasting premium increases for 2019; Citizen's Property Insurance proposed an 8 percent hike. Homeowners with cancelled policies will need to look around for new insurers, and experts say that the overall market will be more expensive. Many companies are proposing rate hikes of somewhere between 7 and 12 percent for the coming year.

Florida homeowners face growing insurance costs

Some analysts say that Florida homeowners are facing unprecedented homeowners' insurance premiums, but the growth in fees cannot be attributed to hurricanes, floods and other natural disasters. Instead, analysts claim that provisions in the state's insurance laws allow contractors to exploit the system to obtain high payments at the expense of insurance companies and, eventually, homeowners. State law allows for Assignment of Benefits, or AOB, under which homeowners can assign the right to their benefits to a third party.

In most cases, that third party is a roofer or other home repair contractor who has been engaged to repair a damaged home. The contractor will perform the work before the homeowner has received an insurance payment; instead, the contractor will go after the insurance company itself for the benefits involved. The number of lawsuits related to AOB has escalated dramatically in Florida in the past 10 years. In 2007, there were 4,986 lawsuits related to AOB issues. However, by 2017, that number reached 129,781 cases annually, and AOB lawsuits made up 60 percent of all insurance litigation statewide.

Recovery efforts underway after Hurricane Michael

In October 2018, Hurricane Michael made landfall in Florida, which lead to 35 people losing their lives. At the time of landfall, the storm had sustained winds of 155 miles per hour, and it was noted for its rapid intensification just before impacting land. Both storm surge and fallen trees caused significant property damage in Mexico Beach and surrounding areas. Furthermore, building codes did not require that structures in the area be able to resist the storm's strong winds.

Of the 119,160 insurance claims that have been filed so far, about 71,000 of them were filed in Bay County. The Florida Office of Insurance Regulation said that four other counties also had more than 5,000 claims from the storm. According to official figures, 45.9 percent of the claims had been closed, and there were more than $3 billion in insured losses as of Nov. 9.

Don't wait for an insurance payout to repair hurricane damage

There is no question that the climate in Florida is one of the most attractive in the United States. The hot, frequently humid weather is good for those with rheumatoid arthritis, as well as many other medical conditions. That, as well as the lower cost-of-living when compared to Hawaii or California, is one reason why Florida is such a popular destination for retired adults.

Unfortunately, the trade-off for the lovely weather and the proximity to the ocean is the potential for hurricanes. Almost every year, some category of hurricane makes landfall over some part of the Florida coast. Those hurricanes, as well as the winds and waves they generate, can cause catastrophic property damage and even cost people their lives.

More than a million Hurricane Irma claims have been filed

The impact of Hurricane Irma on Florida has become even clearer with the release of figures by the State Office of Insurance Regulation showing that more than a million insurance claims have been filed because of this storm. Estimated losses have already passed $11 billion, according to the state agency that tracks insurance losses and claims. While claims have slowed down since the storm hit in September of 2017, thousands of additional hurricane-related claims continue to be filed on a regular basis.

The massive storm resulted in hurricane damage claims being filed from all of Florida's 67 counties. Figures for individual insurance companies aren't released by the Office of Insurance Regulation. The agency's numbers also do not include agricultural losses in the state due to the storm. Such losses are believed to have exceeded more than $2 billion, according to estimates. Damage to government structures (e.g. beaches, roads, and parks) also wasn't accounted for in figures released. Another company that publicly reports insurance-related numbers reported nearly $2 billion in Hurricane Irma losses related to more than 70,000 claims.

Citizens Insurance avoids brunt of Hurricane Michael claims

As the Office of Insurance Regulation continues to tally insurance claims arising from Hurricane Michael, Citizens Property Insurance Corp. announced that the storm will not negatively impact its finances. The bulk of personal policies written by Citizens apply to properties in South Florida, and damage from Michael was concentrated in the northwest region of the state.

The state-owned insurer reported that as of Nov. 14 it had received 3,189 claims so far related to Hurricane Michael, which was a category 4 storm that produced significant damage. Citizens expects to pay out roughly $142 million, an amount that does not exceed the company's cash reserves. Because of the light load of claims directed at Citizens, the company will not need to dip into the Florida Hurricane Catastrophe Fund or make claims upon reinsurance partners.

Hurricane Michael damage claims continue to rise

Florida homeowners are facing significant losses from Hurricane Michael, a Category 4 storm that caused serious damage along the Florida Panhandle in October. The Florida Office of Insurance Regulation said that estimated insured losses from the hurricane are greater than $2.1 billion to date. The office also said that there were 110,183 insurance claims filed for hurricane damage and that 26.1 percent of the claims had been closed by the end of October. The state agency compiled these statistics based on reports from all insurers.

The majority of hurricane damage claims were related to residential property losses. Over 78,000 of the insurance claims that were filed were residential in nature, and 57,088 of those were claims on a homeowners' insurance policy. Only around one-fifth of all of these homeowners' claims had been closed by Oct. 30. Other types of insurance claims included commercial property damage, private flood claims and business interruption coverage. Commercial claims were less likely than residential as only 10.3 percent of the 4,471 claims submitted had been closed by the October date.

Recent hurricanes lead to insurance rate hikes

In 2018, homeowners insurance rates in Florida went up by as much as 15 percent. In the aftermath of hurricanes Florence and Micheal, rates are set to go up again by as much as 20 percent. This may be true whether a person lived in an area impacted by a hurricane or not. However, where a person lives will likely play a role in how much more they will pay for coverage.

It is also possible that the rate increases are not over with, according to a representative from College Park Insurance. As there have been many hurricanes in the state over recent years, insurance rates could go up three times in the next four to five years. In addition to the Florida hurricanes, insurance companies nationwide are dealing with the fallout from California wildfires.

4 hidden signs of damage to check for after a storm

After a storm hits, people tend to look for obvious signs of structural damage in their home. There are many signs that something is amiss that might not be noticeable right away. Keeping an eye out for these can help you to catch problems before they advance.

Many of the issues that can occur can turn serious quickly. Has the hidden damage caused moisture to leak into the home? If you do have any leakage, there is chance of mold or mildew invading. Here are a few signs of damage you should check for:

  • Lifted shingles or ones that are cracked can be problematic. These might not be obvious from the ground, so you might need to have the roof checked by a professional after a storm that produced heavy winds. Blown off shingles are easily noticed, and a sign that immediate attention must be given to the roof.
  • Splits, chips and cracks in the stucco, siding or exterior of your home, can lead to more troublesome issues. Larger issues might be easily noticed. However, smaller defects can remain hidden. It is especially troublesome if the issue is deep enough to allow water to enter the wall space.
  • Defects in window frames can occur even if you don't have any window damage. If you have impact glass, it will give with strong winds, but this comes with a risk of trouble with the frame. The problem is in the walls, so it isn't easy to spot. A good rule of thumb is to have the window, frames and surrounding areas checked after a bad storm, such as a hurricane or a storm with winds that make it on the Saffir-Simpson Hurricane Wind Scale.
  • A musty smell in your home could signal that there is hidden water damage. This might come from some of the issues that are listed above. It can also occur if the home had minimal flooding. In some cases, water on the exterior of the home might seep into the seams of the structure, especially near the foundation, door frames or low windows. Homes with basements are more prone to this since the moisture can seep into the walls below ground level.

Florida insurers expected to weather Hurricane Michael losses

Although Floridians are just beginning to calculate the damages caused by Hurricane Michael, insurance industry analysts have reported that insurers in the state will be able to survive the heavy hit. Michael landed in the less densely populated Panhandle, and the backup reserves of the small and medium-sized insurance companies that write homeowners' policies in the state should cover expenses.

A preliminary projection of property losses prepared by Karen Clark & Company, a firm that models catastrophes, estimates that Michael will impose claims totaling $6 billion on private insurers. This estimate does not include claims that will be directed to the National Flood Insurance Program. About 60,000 policies from that program cover properties in the counties that took the brunt of the category 4 storm.

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