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Newsweek
5 days ago
- Business
- Newsweek
Florida Insurers Celebrate Record Profits as Premiums Surge For Residents
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Florida home insurers are celebrating their best year in a decade as in 2024 they collected more premiums than paid out claims for the first time since 2015, according to the latest data by the Florida Office of Insurance Regulation (FLOIR). Regulators' most recent Property Insurance Stability Report shows that Florida's home insurance sector has finally bounced back from a yearslong crisis, even as the state was hit by three devastating hurricanes—Debby, Helene, and Milton—last year. From Losses To Gains The Sunshine State is still in the process of recovering from a tumultuous time for its home insurance sector, as premiums skyrocketed over the past five years while carriers went bankrupt or cut coverage across the state to avoid rising costs. The crisis that unfolded in the state, which saw both insurers and policyholders struggling, was due as much to the growing threat posed by more frequent and more severe natural disasters as to excessive litigation and widespread fraud in Florida's insurance market. In an aerial view, homes along the Gulf of Mexico are seen after they were destroyed when Hurricane Milton passed through the area on October 12, 2024, in Manasota Key, Florida. In an aerial view, homes along the Gulf of Mexico are seen after they were destroyed when Hurricane Milton passed through the area on October 12, 2024, in Manasota Key, Florida.A particularly low point was reached in 2020, when the Florida home insurance industry collectively reported a loss of $1.2 billion. Between 2021 and 2023 alone, nine insurers went insolvent, including three of the ten largest ones operating in Florida. Faced with shrinking availability, homeowners in the state found themselves having to pay higher premiums or otherwise rely on Florida's insurer of last resort, Citizens, for continuous coverage. Citizens ballooned in size between 2020 and 2023, adding hundreds of thousands of policies to its count and raising concerns among experts and lawmakers of what could have happened should the state-backed insurer be unable to pay all their claims. While extreme weather events, like hurricanes, are likely to continue hitting Florida more often and more violently in the coming years due to the impact of climate change, state lawmakers have intervened to stop the other factors contributing to the market's crisis. Between 2022 and 2023, Florida lawmakers reformed the state's tort law so that it would be less profitable and less appealing for attorneys to take disputed insurance settlement cases. They also made contesting an insurer's offer for settling a claim harder to dispute for policyholders in the first place. "Legislative actions addressed the crisis, resulting in a 40 percent year-over-year decline in new property claim lawsuits in 2024," Mark Friedlander, senior director of media relations at the Insurance Information Institute (Triple-I), previously told Newsweek. "This has led to market stabilization and lower rates. The Florida Office of Insurance Regulation reported that average home premiums declined by 0.7 percent statewide in the fourth quarter of 2024, the first drop in nearly a decade." Out Of The Crisis—But Not Out Of Trouble Not only tort reform—Florida has also welcomed new, smaller insurers into its property insurance market in recent months, diversifying and increasing the options available for homeowners. This has happened at the same time as Citizens had dropped tens of thousands of policies to get back to a size that can be considered sustainable. As for the latest count, dating June 30, Citizens had less than 800,000 policies in force. And yet, despite the progress made over the past couple of years to fix Florida's broken home insurance market, homeowners in the state might struggle to draw a sigh of relief, as they are still paying some of the highest premiums in the country. According to Bankrate, the average annual premium for $300,000 dwelling coverage is $5,728 in Florida. That is still much higher than the national average of $2,397. Many homeowners may also see insurers' profits as a personal slight. Out of 10,900 closed claims for residential properties damaged by Hurricane Debby closed, 7,397 were closed without payment, according to data by FLOIR. Out of 67,266 closed claims related to Hurricane Helene, 37,951 were closed without payment. And out of a total of 254,574 closed claims linked to damage caused by Hurricane Milton, 111,150 were closed without payment. There are several reasons a claim can be closed without payment, ranging from the policy not covering the damage claimed, duplicate claims, or the policyholder's decision to withdraw the claim. FLOIR data does not offer details about why these claims were closed without payment.
Business Journals
22-04-2025
- Business
- Business Journals
Florida insurance agency urges probe into Tampa senior living mismanagement
Florida's insurance agency is urging a criminal investigation into the mismanagement of a now-defunct Tampa senior living facility that allegedly deceived regulators about its poor financial condition before filing for bankruptcy. After a yearlong examination of Tampa Life Plan Village's facility in North Tampa, Unisen Senior Living, the Florida Office of Insurance Regulation found nine 'significant and damning' violations of Florida law, according to a report released Monday. Tampa Life's financial mismanagement ultimately forced more than 100 elderly residents to relocate, and many have yet to be reimbursed for tens of thousands of dollars they paid in entry fees, per court documents. FLOIR claims Tampa Life and Big Rock Management Company, the managers of day-to-day operations at the facility, filed financial statements with material errors that misrepresented the facility's solvency during the three years they were in control, according to the report. In some cases, financial reports were never filed. Tampa Life purchased the facility, formerly University Village, out of bankruptcy in 2020 but struggled to revive operations, per the report. University Village was the subject of a similar fraud investigation in 2015 before it filed for bankruptcy in 2016. As financial challenges mounted in late 2023, Tampa Life engaged with potential buyers to sell the facility but with no success. Only 21% of the building was occupied, and the remaining residents were forced to relocate due to Tampa Life's inability to honor its financial obligations, FLOIR said in the report. 'The level of mismanagement in this case and pure lack of empathy and quality of care for Tampa Life's senior residents was unprecedented and shocking,' said Michael Yaworsky, Florida insurance commissioner. Tampa Life owed approximately $130 million to creditors when it filed for Chapter 11 in April 2024, shortly after it notified FLOIR of its insolvency. A Tampa bankruptcy judge approved Tampa Life's plan to liquidate in December and the facility has since been permanently closed. Representatives for Tampa Life did not immediately respond to a request for comment. Yaworsky referred the report to the Florida Department of Financial Services' bureau of criminal investigation. The agency stressed the need for greater legal authority to strengthen its oversight of assisted living facilities. The bankruptcy of University Village was foundational for legislative reforms in 2019 that expanded FLOIR's authority over senior living.
