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I-TEAM: Uncovering why Florida homeowners risk losing their insurance

Originally published by News 4 JAX| Read Full Article Here

By Vic Micolucci

Skyrocketing number of claims & crooked contractors blamed

If you’ve noticed your homeowner’s insurance premiums have skyrocketed, you’re not alone.

Florida is in a property insurance crisis and many homeowners have been hit with an ultimatum: Replace your roof or lose your coverage completely.

Regardless of the size of your home and the kind of roof you get, a replacement will cost you thousands of dollars – a cost that will come out of your own pocket.

“My insurance agent reached out to me and said my rates are going up,” said Donny Mak, who owns a 100-year-old property in Avondale.

Mak tells the I-TEAM he’s facing a $1,500 a year hike because his roof is more than 10 years old.

“It has never leaked. No issues. So, I don’t see why I have to replace it, you know?”

If Mak doesn’t replace his roof, his insurance company could ultimately drop him. The same goes for homeowner Sue Blanchard.

“When we called our insurance agent, she said, ‘Good luck finding something,’” Blanchard said. “We’ve always paid everything on time. We’ve never had any claims.”

Countless homeowners across Florida are getting notices that their insurance isn’t being renewed – because their roof is too old.

Ty Karakus with Southern Coast Roofing tells the I-TEAM his company gets the frantic calls every day.

“They also give you a deadline,” Karakus said about the insurance companies. “If you don’t get your roof done in such and such time frame, you’re going to get dropped.”

“They are obligated to put that roof on. And what happens is they have to pay out-of-pocket,” he added.

Daniel Miller, a broker and co-owner of Brightway Insurance, said don’t blame the insurance companies – much of the blame falls on crooked contractors.

“The reason for the roof replacement requests is that so many claims are being put on these homeowners’ insurance companies,” Miller said.

Miller said fraud is worse in Florida than anywhere else, with a record number of phony claims after hurricanes and hailstorms. It’s turned the insurance industry upside down – running many companies right out of the state.

“We have had two carriers enter the state over the last two years. We’ve had about four leave. It just does not help for a ratio of creating cheaper insurance,” Florida’s Chief Financial Officer Jimmy Patronis told the I-TEAM.

And then there are the lawsuits, which he said can cost a company 20 times what the claim is for. Essentially, the companies still issuing insurance policies in Florida must pass costs to consumers and make new requirements to reduce the number of claims.

“It’s unfortunate that bad actors are getting in the middle of driving up insurance rates,” said Patronis. “There’s exploitation of Florida statutes in ways that were never meant to be used. Individuals are being able to take advantage of the current Florida law in order to create -- in my eyes -- fraud. In the state of Florida’s eyes, it is legal by the statutes. We’ve got to change that.”

“Do you think that the insurance providers are working in the public’s best interest? Are they being fair here with these insurance hikes?” we asked Patronis.

“You know I think they’re trying to survive. When you’ve got exploitation taking place with the roofs. I’ll give you a perfect example. Citizens Insurance -- there are approximately four law firms that generate approximately 10,000 lawsuits every single month,” he answered.

It’s not just your roof you need to worry about. Some insurance companies are now asking for homeowners to replace hot water heaters, plumbing, electrical – even if they’re in working order.

Again, an effort to limit the chances of you filing a claim. And again, it’s more money out of your own pocket.

“Insurers are bleeding excessively here in Florida. We’re projecting an underwriting loss in excess of $1.6 billion for 2021,” said Mark Friedlander with the nonprofit Insurance Information Institute.

He tells the I-TEAM there’s a property insurance crisis like nowhere else that’s triggering a domino effect with premiums skyrocketing.

“We’re hearing from homeowners across the state that are seeing 50% increases, 100% increases,” said Friedlander. “And some of them have legitimately never had a claim.”

Friedlander says homeowners need to:

  • Plan for these expenses

  • Shop around

  • Ask their agents for other areas to potentially cut costs

  • Know there are fewer options as more companies pull out of Florida

He says if you have a mortgage and your insurance company does drop you, you are required to get coverage. If not, your bank will assign you coverage – which Friedlander warns can cost you multiple times your latest quote.

“If there is somebody that has done everything right, they’re still getting dropped and they don’t have the money for that total roof replacement? Where do they go?” the I-TEAM asked Patronis.

“Unfortunately, it’s Citizens Insurance. It’s based right here in Jacksonville. It’s the insurance company that both you and I own, every citizen of the state owns. But it’s the insurance of last resort,” he said.

Patronis says to keep the situation from getting worse – stay away from fly-by-night contractors who promise to make a claim on your behalf.

“Your house is insured. Your house is eligible to make claims. Just don’t let somebody take you down the path where ultimately, it’s going to make it harder for you to get your house re-insured because what they’ve done to your ZIP Code, your neighborhood,” he said.

There could be some relief soon. Patronis is pushing a bill that includes what’s called Home Hardening. If lawmakers pass it, you will get a tax deduction for installing impact-resistant doors, windows, and garages. Patronis says by strengthening your home, you could also save money on your insurance premium. The Home Hardening initiative is part of a tax package that is now headed to the full Florida House of Representatives for a vote.

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