House panel vents frustrations over insurance cost drivers, accountability failures

TALLAHASSEE, FLA. 1/5/23-09Rep. Hillary Cassel, D-Dania Beach, during the House Select Committee on Hurricane Resiliency & Recovery, Thursday at the Capitol in Tallahassee. COLIN HACKLEY PHOTO

The House Insurance and Banking Subcommittee is tackling homeowners insurance, with a panel discussion featuring cost drivers in the market, though it won’t lead to any immediate legislative action or consideration.

Experts and legislators bounced colloquial questions and answers off each other, with one takeaway being that the people voting on laws are as confused by the state’s insurance market as the homeowners subjected to it.

Early on, Office of Insurance Regulation (OIR) Commissioner Mike Yaworsky noted that various ratings factors come into play, including age of home, type of roof, litigation history and claims history in a given home.

This vanilla preamble quickly led to spicier questions and proclamations, with legislators of both parties asking tough questions about the market and voicing frustrations about fixes being fruitless to this point for many consumers.

Rep. Susan Valdés, a recent convert to the Republican Party, wondered why claims were denied regarding flood damage. Yaworsky says that precedent dates back to law passed in 1968 federally, with the feds creating the National Flood Insurance Program and therefore releasing wind policies from the burden.

He also noted that many people decided to forego flood insurance.

Rep. Yvonne Hinson wondered why the condition of the house factored into coverage, and Mary Katharine Lawler, who is on the board of the Florida Association of Insurance Agents, took that question. She noted that the improved building code combined with a tougher insurance market affected rates.

“This is a change over the last four or five years,” the Gainesville Democrat noted.

Yaworsky framed costs as part of a larger risk pool, noting that “mitigation techniques” can bring a “pretty stark differential” in costs.

Chip Merlin, a lawyer who specializes in insurance, took a different tack.

He questioned “how successful” OIR was in fighting insurance companies and noted that insurers are using drones and the like to deny people insurance over arbitrary factors such as the age of the home or its component parts.

“A lot of people right now are very frustrated with the insurance product,” Merlin said, saying that technicalities in policies “frustrate people,” imposing limits and chipping away at the claim.

“How cheap is insurance if you can’t collect on it? This nickel and diming is very frustrating to individuals,” Merlin said.

Rep. Dianne Hart, a Democrat from Tampa, honed in with specific details. She described her century home with a brand new roof, tiedowns, and other mitigations, but noted that her insurer’s contractors are given a more favorable rate than those she might use herself.

Yaworsky noted that some companies indeed do just that, “an additional offering to save money on insurance” via “managed repair.”

Rep. Berny Jacques, a Clearwater Republican, questioned Yaworsky about capitalization of new companies to avoid “bait and switch” scenarios for consumers.

“We’re making sure companies aren’t taking more risk than they can,” he said, saying companies had to have more lines of business than just “takeout” policies for Citizens.

Rep. Danny Alvarez said constituents of his are leaving Florida because of insurance costs.

“It feels like the further I get involved in this issue, the less I can talk to them,” said the Miami Democrat.

Palm Beach Republican Rep. Mike Caruso said he was a “patient man,” but expressed frustrations over reforms he voted for on assignment of benefits and tort reform not offering relief or stabilization to all homeowners, or “better service” from insurers.

He described a Fort Myers octogenarian who wrote to him to say she had only gotten $10,000 after Hurricane Ian in 2022, and fighting to get her claim filled ever since. Her case has been through seven adjusters, three engineer inspections.

“I think she’s going to die before she gets her money,” Caruso said, adding that the “insurance companies are failing us.”

It’s not just legislators who are affected by the insurance market.

Chad Carr of Tampa, a Realtor, is dealing with flood and wind deductibles for two storms. His savings is depleted and he’s going to have to get another job, he said, while he and his family live in a camper even as they have spent $120,000 out of pocket so far with no relief in sight.

He’s not alone.

“I have clients who are waiting, on the backburner. They wonder if the insurance companies are doing this to us on purpose,” Carr said.

In the wake of complaints from Carr and stories from other impacted consumers, Vice Chair Hillary Cassel, who recently switched to the GOP,  lambasted Yaworsky for getting just “5%” of “consumer complaints” amid a marketplace with troubles.

“You’re only getting 5% of consumer complaints. Shouldn’t you be getting 100%?” she asked.

“Every time a Floridian complains that something has gone wrong with their insurance company, you should be receiving every single one of those complaints, so how do we make sure that every single Floridian’s voice is heard by your office so we can actually look into these insurance company’s behavior?”

People feel, added Valdes, that “insurance companies are always going to win” and “they are on the menu.”