From landlords to lawyers to the insurance companies themselves, the insurance crisis runs deep in Florida.
Rohom Khonsari lives at Pinellas Point. He had to scramble for the past month trying to find a new insurance company to cover his home after his cover dropped.
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“So I didn’t think anything of the advice I was getting. I opened one earlier this month and it said the company was bankrupt, my policy was canceled and I had to find a new policy by May 28,” Khonsari explained.
Khonsari’s policy is renewed in November, and he was frantic especially since he lives in a flood zone. He’s trying to pick up the pieces, like thousands of other owners in Florida. It’s a rat race that mortgage brokers try to get their clients through.
“A lot of customers who come to me had five or eight different carrier options to choose from various premiums, various coverages are probably down to two or three, and in some cases just one,” said Michael Koopman, of Mortgage Through the country.
This option in most cases is citizens’ property insurance. It’s the state-backed agency now seeing a flood of homeowners who can’t find coverage anywhere else. It’s not good because if a hurricane hits the citizens, who are essentially supported by you, the taxpayer, could end up having to pay billions of dollars in claims.
“Florida, because it’s a hotbed of people to visit, has been widely publicized during the pandemic. Everyone is moving to Florida. Great weather, no state income tax, affordable housing so far,” Michael said.
Now Florida lawmakers find themselves in a race against weather and climate as they scramble to pass some sort of deal or legislation as hurricane season soon begins.
Insurance agent Jake Holehouse said he doesn’t blame the insurance companies, but rather blame the lawyers who feast on Florida laws that require insurance companies to pay for a complete roof replacement in the event of a storm damage.
“What basically happens is you have roofers in areas like the villages of Orlando and Lutes, where they go to a neighborhood that was built in 2004. So they know that every roof of that neighborhood needs to be replaced in the near future. And they just find a day in the last two or three years where they think hail might have happened. And so they go and knock on the door and they sign a claim by doing a free roof inspection. And they represent that they’re part of your insurance company,” Jake explained.
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He added: “They basically get the owner who doesn’t know any better to sign that claim. The insurance company is trying to deny the claim because it is wear and tear. It was never intended to be covered by the police and it is not covered by the police in any state except Florida. And so what happens is basically that the carrier initiates litigation about it.
Florida has over 100,000 lawsuits against insurance companies, while the rest of the country has around 1,000. This is one of the main reasons insurance companies go bankrupt, raise their rates or cancel their coverage.
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“Everyone thinks it happened overnight. It didn’t. We’ve been fighting this real crisis since March 2015. For seven years, and every year referents and lawyers are becoming more and more experts at the games being played. Moving far beyond central Florida to the entire state. And the game continues because it can,” explained Bob Richards, CEO of American Integrity.
Either way, you pay the price. It’s you whose house is at stake.