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Inside Florida's property insurance crisis

This photo taken on June 16, 2018 shows a low-lying home near sea level in the Indian Beach neighborhood of Sarasota, Florida. (KERRY SHERIDAN/AFP via Getty Images)
This photo taken on June 16, 2018 shows a low-lying home near sea level in the Indian Beach neighborhood of Sarasota, Florida. (KERRY SHERIDAN/AFP via Getty Images)

The Florida property insurance market is in trouble.

“For the last two years, the private companies operating in Florida have had a combined negative net income of $1 billion. So, the market is fundamentally shutting down.”

It’s bad for homeowners too.

“Consumers are on life support right now. They are … paying more money for less coverage.”

When a market craters like that, something fundamental has gone wrong. In Florida, it comes down to one thing: litigation.

“Florida has 8% of the claims and 79% of the litigation, so there’s something very, very wrong with that.

“And I don’t think anyone logically could explain that kind of differential other than the statutes in Florida being abused.”

Today, On Point: Florida’s property insurance meltdown. Can it be fixed?


Mark Friedlander, director of corporate communications at the Insurance Information Institute, a non-partisan nonprofit. (@markfri09)

Jeff Brandes, Republican Florida state senator since 2012. Author of Senator Jeff Brandes Calls for Special Session on Insurance. (@JeffreyBrandes)

Also Featured

Mandy Wells, a homeowner in Cape Coral, FL

Joe Carlucci, co-owner of Brightway Insurance, an insurance agency in Jacksonville, Florida.

Transcript: One Florida Homeowner On Florida’ Property Insurance Meltdown

MANDY WELLS: Cape Coral’s like copy-paste. It’s like the builders just went and built the same house over and over again.

MEGHNA CHAKRABARTI: Mandy Wells, her husband and her son, moved to Cape Coral, Florida in 2017, and they live in one of those copy-paste homes. The three bedroom, two bath, 1,600 square foot house was modern and in great condition until October 2019, when Mandy noticed that the roof was leaking. Not good.

Mandy had remembered, though, seeing a roofing ad on Facebook. It was from Fort Myers based Marlin Construction Group, and their website says they’re licensed and insured and a red banner across the top of the home, page says at Marlin Construction Group, your satisfaction is our No. 1 priority. So Mandy called them up.

WELLS: He comes over. He has me sign a document called a proposal contract. And then he also writes on the back of my direct to pay authorization that I have a leak in the front. He tells me a storm date, which is different than the date that we’re meeting on and even different than the date that I had seen the water.

And he tells me, Oh, this is from high winds. Everything is like high winds down here. So and then he sits down next to me at the computer and assists me in filing an insurance claim.

CHAKRABARTI: By the way, the contractor hadn’t even been up on the roof to inspect it, but he puts down December 20th, 2018, on the paperwork, the very same day that severe weather and wind did hit Florida. But that happened to be more than a year before Mandy had any roof issues.

And by the way, the proposal contract, which Mandy provided to us, has both an Angie’s List logo and a Better Business Bureau A-plus rating logo in the upper right hand corner. But Mandy, of course, wasn’t feeling like she was getting that A-plus service. So she spends the next several weeks going back and forth with this company, trying to sort it all out.

WELLS: And this company never came back to do the work. They tried to leverage this document into getting me to sign a power of attorney, and assignment of benefits. This one not until February of 2020, when I asked them just to cancel my file. No work had been done on my home. The company’s never even been on my roof. My home had been taking on water that entire time.

CHAKRABARTI: Assignment of benefits, also known as AOB. It’s very common in property insurance lawsuits in Florida. And here’s how it works. A contractor or attorney has the homeowner sign over their property insurance policy to them. So that any money collected in an insurance claim goes directly to the attorney or contractor, not the policyholder. It’s common and it’s legal. But here comes your plot twist.

In Florida, lawyers often sue insurance companies for much more than the actual repair costs. And because of that AOB, they get to collect the extra cash. In fact, since 2013, insurance companies made $15 billion in payouts in Florida, but less than 10% of that went to policyholders. More than 70% of it went to attorneys. What’s more, the Sunshine State is a standout nationwide. More than 75%, three quarters of all property insurance litigation in the entire country originates in Florida.

WELLS: The construction firms are being aided by attorneys and they’re tying everybody up in litigation. I can promise you that the homeowner has no idea what they’re getting into. They think, you know, this is the path to, you know, I’m going to save my home. I’m going to have a healthy place to live. You know, I have mold in my house now. I have water stains on my ceilings.

CHAKRABARTI: That’s Mandy Wells in Cape Coral again. It’s taken more than two years of legal battles with Marlin Construction Group and her insurance company. But Mandy will finally get her roof fixed in a few weeks. Meanwhile, her insurance premium has gone up. A lot.

WELLS: It went up from $800 a year to $2,700 a year.

CHAKRABARTI: More than tripled since 2017. All the while, Mandy’s coverage has gone down. And on top of that, her current insurance sent her a non-renewal letter for this coming year, meaning she’s got to find a new policy by next month.

WELLS: Before, I maybe had, like three or four companies to choose from. There was one company to choose from. That was it. But, you know, it’s just like paying for gas. You just put your card in the machine and you just look away and you just do it, you know? So … the sting is over.

CHAKRABARTI: But if insurance premiums keep rising the way they are, Mandy doesn’t know how much longer she can withstand that sting.

WELLS: If it’s going to triple for every couple of years, I mean, we’re basically almost single income household. Because I am a stay at home mom with my special needs son that I do homeschool. We would have to consider making some kind of change.

I don’t know how much longer we could even afford to stay in the house. I guess maybe I’m just fixing up the house for someone else to move into. It’s just incredible. It’s incredible what’s happening. It’s incredible that Tallahassee can’t do more for homeowners because we’re the ones that are. … We’re losing. We’re losing.

This article was originally published on WBUR.org.

Copyright 2022 NPR. To see more, visit https://www.npr.org.