Florida’s Insurance Crisis: A Manufactured Problem
For years, Florida’s insurance industry has presented a narrative blaming external factors for its failures, including catastrophic storms, unscrupulous actors, and litigious consumers. However, recent reports are exposing a different reality, revealing the industry’s own questionable business practices as a primary cause of the problem. One such report, detailed by Miami Herald and Tampa Bay Times reporter Lawrence Mower, has challenged the industry’s version of events.
This image depicts a businessman holding insurance-related symbols, perhaps representing the industry’s role in the crisis.
Mower’s investigation unveiled a secret 2022 study conducted by the Office of Insurance Regulation (OIR). Despite multiple public records requests, the OIR withheld the study for two years. The $150,000 study found that insurer parent companies were diverting billions of dollars to affiliate companies, including Managing General Entities (MGAs), while simultaneously claiming financial losses. This revelation points to the industry’s own actions as the root of the crisis.
In response to these findings, the insurance industry has attempted to control the narrative. One instance involves Allen McGinniss, a Tallahassee insurance agency executive, who criticized Mower’s reporting and questioned his ethics, while also defending the industry’s reliance on MGAs. McGinniss quoted former Insurance Commissioner Kevin McCarty—who has not been in office since 2016—to support his position, trying to rewrite the situation.
This behavior has influenced the state’s actions. By relying on industry misinformation, Florida lawmakers passed pro-insurance, anti-consumer legislation in hopes of achieving “market stability.” Now, the industry and state regulators claim the desired outcome is being achieved. But, residents and voters are still struggling.
Voter Concerns and Legislative Realities
Lawmakers are hearing a different story from their constituents, who are struggling with the insurance crisis. During a recent House Subcommittee on Insurance and Banking meeting, Rep. Daniel Alvarez shared: “When I’m on the street, I simply don’t know how to talk to my constituents…I know I voted on a bill that every insurance expert told me, ‘Give me two years, Danny, before you start getting hot, right? And you will see either prices stabilize and come down or come down, and I do not know that I have seen either of those two. And when I am the guy who faces the consumer, I just do not know what to tell them anymore other than, ‘I’m sorry.’ I have got people leaving because they cannot afford it anymore, and this is the main driver.”
Reality paints a troubling picture. In the four years since reforms began, the rate at which insurers deny claims has increased significantly. OIR data shows claim denial rates have increased in the wake of so-called reforms. Post-reform storms show dramatically higher denial rates. Hurricane Milton resulted in 43% of claims being closed without payment, and Hurricane Helene, 53%. Insurance companies have attempted to blame flood damage for many of these denials, implying homeowners weren’t responsible with flood insurance.
Florida’s homeowner policies have long included “anti-concurrency causation” (ACC) provisions, which allow insurers to deny claims if any part of the damage relates to factors not covered by the policy. While ACC abuse is not new, it has become more common since Hurricane Michael in 2018. The 2022 and 2023 tort reform laws have further empowered insurance companies to deny claims, knowing consumers will have a difficult time challenging those denials.
Even Insurance Commissioner Yaworsky has voiced concerns, sending a memo to insurers requiring additional data and noting potential problems with ACC policy language. These issues have come to light thanks to the work of Mower and other reporters who have given a voice to Florida residents.
The Manufactured Crisis and Voter Anxiety
It’s becoming clear the insurance industry, designed to support residents during times of need, manufactured this crisis. It has used calls for “market stability” to benefit its bottom line, while record profits accumulate. A recent poll by the Associated Industries of Florida Center for Political Strategy showed that one in three likely voters named property insurance costs as the most pressing issue. When asked what costs caused the most “anxiety,” insurance-related costs—property, auto, mortgage, and health care—topped the list. This polling, conducted by one of the key proponents of tort reform, reveals the continued economic strain four years into Florida’s insurance reform experiment.
During a speech two years ago, former President Trump called Florida’s industry-backed tort reform law “the biggest insurance industry BAILOUT to Globalist Insurance Companies, IN HISTORY” and “the worst Insurance Scam in the entire Country.”
Instead of attacking journalists for exposing the truth, Florida’s insurance companies need to be held accountable for honoring their contractual obligations to Floridians. If they are unwilling to do so, the Florida Legislature should take action. It’s time for the industry to address its part in the crisis and honor the agreements that Floridians depend on.
