Q&A of the Day – What’s Required to Fix Florida’s Property Insurance Crisis
Each day I feature a listener question sent by one of these methods.
Email: brianmudd@iheartmedia.com
Gettr, Parler & Twitter: @brianmuddradio
iHeartRadio: Use the Talkback feature – the microphone button on our station’s page in the iHeart app.
Today’s entry: You brought John Morgan to "represent" the public v. Insurance. Nicely done. You turned into a fully-fledged lobbyist for the carriers. Have you ever dealt with them when you had a claim? I encourage you to speak with people that deal with carriers on a daily basis.
Insurance carriers have taken the victim position of acting in such a shock when they are sued for improper claim handling. We can all agree that major changes must take place, but to pretend that this is a one-way issue is a complete mischaracterization of the real story.
Yes, some roofers are bad, some restoration companies are bad but that doesn't mean carriers are divine.
Bottom Line: Today’s note, which includes parts of an email exchange with a well-intended but frustrated listener in the insurance adjusting business, comes on the heels of my interview last week with Florida CFO Jimmy Patronis, in which he spoke to the progress made with property insurance reforms during the special Legislative session and made reference to Florida’s most prominent attorney. John Morgan. In what was borderline shocking to me when I heard it – John Morgan publicly supported Jimmy Patronis’ proposals to limit property insurance litigation in the state. Anytime you have a prolific litigator who’s supportive of limiting litigation – you've got a story within a story. Just in case you weren’t really sure how extensive Florida’s property insurance litigation crisis is – the attorney who’s had the most success in Florida’s history suing insurance companies is saying we need to significantly limit the ability to sue insurance companies. So, kudos to Morgan for standing up for what’s right, rather than what might be most profitable for his firm and industry. That’s the kind of perspective and leadership that’s required for meaningful change. But back to the issue at hand.
The prominent reason why the Legislature hasn’t taken meaningful swings at addressing property insurance litigation reform until now, is precisely because of what I was ironically being called in today’s note. Lobbyists. With only 8% of the in-force property insurance policies, but 79% of the country’s lawsuits, you don’t have to be any better at math than your typical mainstream media reporter or Biden economic official to know we have big problems. But while the average Floridian is now paying $680 per property insurance policy annually – just for the litigation expense associated with those lawsuits – those on the receiving end of all of that money out of your pocket aren’t inclined to give it quietly. The slimy attorneys and the slimy contractors who have broken our property insurance market by taking advantage of persuadable homeowners who are willing participants in their scheme – make lots of noise and spend lots of money attempting to maintain the status quo.
Throughout the course of this year, as I’ve ramped up my coverage and ramped up my criticism, I’ve already had a huge ramp up in accusations against me. While it's comical to call me a lobbyist, it's among the nicer names I’ve been called by the property insurance reform detractors. As cited last week, while originally being concerned the state still didn’t go far enough with reforms (I’d like to see the end of assignment of benefits altogether), we had the first big sign that what did pass can meaningfully move the needle. That came when one of the biggest property insurance suers (or sewers if you prefer – it applies too) in the state, Orlando based The Restoration Association of Florida and Air Quality Assessors LLC., sued the state over the new law. Why? Among the reforms passed by the Legislature, AOB, or assignment of benefits reform. Under the reform contractors are no longer able to recover attorney’s fees if they sue an insurance company after having been assigned the benefits. This has been at the crux of Florida’s crisis. Slimy contractors which petition homeowners for unnecessary fixes, like replacing whole roofs, then suing insurance companies to get them to pay for it – along with the attorney’s fees. Now let me come back around to the question at hand in today’s Q&A.
The listener is right that my coverage has been effectively one-sided recently. It gets back to their being two sides to stories and one side to facts. For any well-intentioned attorneys, contractors, insurance adjusters, etc. who may disagree with my coverage and perhaps litigation reform. I’m clear on the facts and have been engaged with this issue for far longer than most would have any reason to know. I’ve worked on Florida’s property insurance issues dating back to the crisis after the '04-05' hurricane cycle. If you've ever heard Jimmy Patronis reference the extent of my knowledge on this subject - he's not just blowing smoke. Much of my work on key issues takes place off-air.
I'm not dismissing concerns or issues with Florida property insurance companies paying legitimate claims, however these are two entirely separate issues. Insurance companies dragging their feet on legit claims, or outright denying them, isn’t unique to Florida. What is, is the current crisis. If the crisis isn't fixed you won't have any property insurance companies to worry about aside from Citizens which would make our current property insurance market look like a property insurance dream come true. If we fix this crisis and restore stability to the market, it's possible if not likely, many of your concerns will dissipate due to less skeptism/greater financial stability with the carriers. Florida’s property insurance market is naturally challenged due to Florida being the highest risk state in the country from a property insurance perspective. This crisis, however, is entirely driven by absurd, largely dishonest, and unsustainable litigation aimed at our carriers. Wanting to talk about legitimate claim payout concerns is the equivalent of grabbing a bucket to bail water out of your sinking boat as opposed to plugging the hole. If we fix the crisis any remaining issues can be better assessed.