Palm Beach Post
Published September 12, 2020
The latest forecast from the National Oceanic and Atmospheric Administration indicates this could be one of the most active hurricane seasons on-record. This is especially troubling news for Florida as our state’s geographic location and growing population create an inherent risk for catastrophic damage from hurricanes.
Prior to 1992 and the historic damage from Hurricane Andrew, the state’s vulnerability to hurricanes had been underestimated. Hurricane Andrew created billions in losses and forever changed the marketplace for property insurance in Florida. One silver lining? Hurricane Andrew ushered in modern day building codes, which save lives and increase the resiliency of communities.
Since Hurricane Andrew, Florida has experienced many catastrophic weather events that have challenged the insurance marketplace. Six of the 10 costliest hurricanes have impacted Florida. In recent years, Hurricanes Michael and Irma caused billions of dollars in damages. All the while, Florida insurance companies have been there and will continue to be there to help families, individuals, and businesses recover after a disaster.
In addition to the inherent greater risk from hurricanes, Florida’s crumbling legal environment has had significant consequences on the insurance marketplace. Rampant lawsuit abuse has increased costs for all Floridians. Even when an insurance company does everything possible to settle a claim efficiently, fairly, and in accordance with a policyholder’s contract, some plaintiffs’ attorneys are using questionable legal tactics to deliberately prevent a claim from being settled in order to file a lawsuit in the hopes of winning an astronomical settlement.
Legal reforms are critically needed to put an end to widespread lawsuit abuse. The governor and Florida Legislature took a positive step forward in 2019 by passing a law that protects homeowners from assignment of benefits property scams, but more legal reforms are needed to restore fairness to the state’s legal system and keep insurance premiums reasonable for Florida families.
There are actions that consumers can take to save money and reduce insurance premium costs, such as shopping around for the best coverage at the best price. We are in the peak of hurricane season, and now is the time for home and business owners to review their insurance policies and make sure they have both the right amount of coverage and the right coverages. In Florida, flood insurance is essential. This is why it is important to remember that flood damage is not covered under a standard homeowners policy. Flood coverage must be purchased as a separate policy through the National Flood Insurance Program (NFIP) or the private market.
Insurers also implement strategies to reduce damage and contain costs. Some insurers offer discounts for verifiable steps that homeowners take, such as getting hurricane shutters, to reduce the possibility of damage to their home. With COVID-19 and social distancing concerns, there is a renewed emphasis on making homes stronger and safer places in which to shelter during a storm. Simple, low-cost steps like inspecting and repairing your roof, clearing away yard debris that could become projectile “missiles” during high winds, trimming branches and trees away from the roof and home, securing loose gutters, and sealing doors and windows to prevent water intrusion can go a long way toward making your home more resilient against storms.
Florida is constantly in Mother Nature’s crosshairs, which presents significant challenges to Floridians and the insurance industry. With more storms likely on the horizon, now is the time for Florida residents to make sure they have enough insurance coverage to recover and rebuild if disaster strikes. Insurers will continue to do everything they can to hold the line on costs, but policymakers need to prioritize legal reforms that will improve the insurance marketplace, reduce consumer costs, and keep premiums affordable.
LOGAN MCFADDIN, TALLAHASSEE
Editor’s note: McFaddin is assistant vice president of State Government Relations for the American Property Casualty Insurance Association.