Florida insurers steered money to investors while claiming losses, study says

This practice is pretty common in auto insurance. The company you wrote your policy with is usually broker and your ID car will list the actual Insurance Company. If you go through an independent agent you'll encounter 3 layers of abstraction where the agent writes business for multiple brokers who manage books of business for different insurance companies.

> why do I need a city permit, why do I need a fraudulent contractor permitted ONLY by the city (I don’t want the city looking out for me…that’s always their BS argument…leave that to me). I should be able to shop the supplies myself.

You are not the only person that will own the house you live in, that’s essentially what permits and regulations are for, to ensure the next owner isn’t saddled with a stupid decision made by the previous homeowner. Roof inspections are particularly important in places with snow load or hurricane force winds.

Roof claims are prorated, if your previous roof was rated for 30 years and installed 15 years ago, you get half of the replacement cost paid.

If you don’t like it you can pay off your house and self-insure your residence. If you don’t like cities, go buy land and build a house in an unincorporated area, there are places that completely lack any local building code enforcement.

That seems impossible. I have been assured that only government pays fraudulent claims. The invisible hand ensures that corporations will root out fraud.

Florida significantly reformed insurance/claims in 2023 to reduce fraud. Senate bill 2A prevents assigning insurance claim benefits to 3rd parties, which was a significant source of insurance fraud.

The elephant in the room is that hurricane insurance shouldn’t be a for profit business because no business can survive multiple cities being destroyed by a hurricane, this money should have been driven to a state fund that pays out when disaster strikes and the private insurance business should insure only the usual stuff.

Are you saying that the insurance companies are paying 4 to 5 times cost to repair roof, but then at the same time saying that adjusters are only paying out 50 to 90% of the actual cost?

That doesn’t make sense. The former which you were claiming is fraud seems unlikely to be approved by an insurance company. The cost to replace roofs is well known. Why would they pay 4 to 5 times the amount? The latter point regarding adjusters only paying 50-90% of the actual cost sounds more like the real insurance companies that I’ve ever dealt with.

Furthermore, building permits and requiring licensed contractors to repair the roof and replace the roof are not only to protect you, but to protect any poor person that comes to buy your home from having to deal with shoddy repairs from well-meaning homeowners.

The roof stuff drives up prices massively. The MGA stuff is just the tool/response for the insurer to manage the downside for things like the roof nonsense - if they can pocket the fee when they write the deal then if there’s a subsequent rush of claims (some roofer, in some area, following some storm, which inflates claim costs), then the loss is capped at the equity they have in the insurance carrier.

My thoughts exactly. I live in Florida, and have for 30 years. I’ve never personally used my insurance, and my parents had to use theirs once when the neighbor’s tree randomly fell in our yard, and they also had their insurance pay for most of their roof-a lot of people do. I paid for my own roof fully out of pocket.

If you are near water or below ground then there is a near certain risk of flood, and I realize I subsidize those areas while I chose to stay away from water. But the entire national conversation is focused on saying that climate change has doomed Florida

Well, this probably explains why those Koi pond entranceways fell out of fashion after the 80s

Between tariffs (nails) and a huge number of undocumented workers in the roofing industry[1], it’s all setup to fall apart pretty soon.

[1] https://www.roofingcontractor.com/articles/100311-reporting-...

Your insurance company blindly cut a check and didn't send an adjuster out to see how old your roof was and deny the claim or pro-rate it to only pay 10% of the cost?

For those of us who live here, it's frustrating. Tons of scams and bullshit.

But we can name 10 recent transplants who built new, very large homes at water level in the past 5 years (ever wonder why they tell you hurricanes are getting more expensive??)

Then these same transplants scream bloody murder if the water gets close to their house. It has dominated political discussion in areas where, imho, these homes shouldn't even exist and other, less wealthy residents are lacking proper infrastructure maintenance.

Many of those transplants lost their shit after the recent hurricanes, even though anyone who is native knows it's always a possibility when you live 25 feet from the water at water level.

Then these same transplants want the cities to work impossible magic and "fix it." These same city officials, from my experience, are almost certainly in the pocket of big real estate investors.

Anyway, I get it. It sucks to flood out. But many of of these rich transplants clearly do not have the SLIGHTEST idea how the physics of water works. They're lucky it recedes so fast in my metro too.

You raise the rates on everyone to cover actual expected losses, and make sure that the insurance companies don't commit fraud.

Then people will say that they can't afford Florida. And they will be correct.

This is accurate at the macro level, but on the micro level the insurance companies are doing nasty insurance company stuff like doubling rates in ~5 years, requiring people to replace their roofs every 10 years instead of every 30 years (at their own expense) and low balling claims expecting most people to not hire a lawyer to fight for them when their house is in shambles. They've really gotten shady over the last few years. These aren't fly-by-night insurance companies, these are companies you've all heard of that make hundreds of billions of dollars a year, companies with blue logos and red logos; how American.

The other problem is, as most of you may know, to get a home loan to buy a house, you are required by the banks to carry insurance. This makes it a near monopoly that these companies are taking full advantage of. I'm sure the legislature is happy to take campaign contributions from these companies to ensure the status quo. No one will get arrested. You know the drill.

I agree insurance will be more expensive in a hurricane prone area, but all the shady stuff is what people are complaining about.

> FL's in a bad spot where home insurance in particular is unsustainable given the increasing threat from climate change.

I was a South FL resident for half of my life. Either the insurance pool is spread across the entire country, subsidizing FL, or just stop.

FL will soon be uninsurable in the free market.

> There ARE going to be multiple city-leveling hurricanes in the future - how do people expect to be able to pay for this?

Are there?

As far as I can tell, hurricanes:

- Destroy buildings that are not properly designed and built to withstand enough wind. The industry and modern codes know how to deal with this for new and sufficiently retrofitted construction. I don’t even think the measures needed are particularly expensive.

- Damage to structures due to wind-blown rain. The more informed architects and engineers know how to deal with this. A very brief search suggests that even the Miami-Dade code hasn’t caught up: for example, you can still build a vented roof assembly in Florida. This is a poor idea in a humid climate even without hurricane, and those vents are problematic in a hurricane. Getting rid of them in new or remodeled construction is easy and not very expensive, but architects and builders need to learn how.

- Damage to structures due to flying things near them. In a city setting, this can be mitigated by building structures that don’t turn into flying junk and enforcing requirements for people to keep their yards clean.

- Flooding: this will cause massive damage to whole cities.

An interesting property of the issues other than flooding is that the most vulnerable structures may get destroyed by hurricanes, leaving behind the less vulnerable structures.

~20 years ago when I worked for an auto insurance broker, we opened a program in Florida and it was very challenging. I'm trying to remember the specifics but the regulations were such that you couldn't collect more than like 15 days of premium in the down payment and you were required to cover that policy for the first 30 days. So there was always something like a 15 day gap. This meant policies were cancelling after the first month and rewriting. They didn't have electronic approvals at this time so you couldn't implement any sort of real-time checks either. If your producer wrote a policy, you were on the hook for it. I think we introduced some by-fax validation process to mitigate this.

Another common practice for people who need insurance to register vehicle but had no intention of carrying insurance was to write bad checks. If the person was approved they'd basically have 30 days of coverage for free. If they had an accident they could pay the premium, if they didn't then they could let the policy lapse.

There was also something weird about the uninsured and underinsured coverage, I can't remember specifics but I think it was that the coverage was required due to the high number of people who drove uninsured but we couldn't charge for it? I can't recall exactly.

The regulations were such that it made it very hard to make money and I think we backed out of the market after 12-18 months.

Still are.

https://news.ycombinator.com/item?id=42450680

https://news.ycombinator.com/item?id=41664750

It's all predicated on having competition, which of course companies hate. Once a company becomes both a monopoly and "too big to fail" it isn't really a company anymore, but functionally a piece of government run by unelected profiteers. If elected officials did their jobs and maintained something resembling a free market everything would be so much better.

"It is a flawed model that is sucking society dry but this is how America is set up."

This article is about a problem of how Florida, specifically, is set up.

To the downvoter - perhaps you didn't read the article, don't know about Florida's P&C regulatory problems, or wanted to make another point. But from the article:

"The Office of Insurance Regulation said in a statement that the study was not given to lawmakers because it was “not a formal examination report.” It was produced months before lawmakers met in emergency legislative sessions in 2022 and left in a “draft” status."

Florida knew this, and was surpressing this, because the state executive branch is corrupt and in a state of regulatory capture.

> But of course - I don't understand why people are forgetting that when companies raise prices/cut benefits, it is not because of actual losses but because they want to return more of their revenue to shareholders than to customers or employees.

When I raise my prices (construction services), it’s due to the annual wage increase for the union labor I use to perform the work. If I arbitrarily raise my price, I will lose a competitively bid project to a hungrier competitor.

I understand that not all industries are competitive, but that’s what regulations should be used for, regulating markets with a handful of players. Not all price increases are due to greed, the price of everything goes up over time due to inflation.

DeSantis received 4.61 million votes [1] from a population of 23.37 million [2]. 3.15 million voters voted for a candidate other than DeSantis [1]

[1] https://en.wikipedia.org/wiki/Electoral_history_of_Ron_DeSan...

[2] https://en.wikipedia.org/wiki/Florida

Average elevation in Georgia: 600ft

Average elevation in Florida: 100ft

Georgia coastline: 100 mi non-NOAA

Florida coastline: 1350 mi non-NOAA

Even when cheating with non-NOAA numbers, Georgia is nowhere near comparable to Florida. Most of the people in your pools in Georgia are not on the coasts, and live at non-dangerous elevations. Whereas in Florida, nearly all of the people in your pools live on the coasts, and at extremely dangerous elevations.

What the insurers are doing is all legal, what do you propose exactly?

Do you think that the current administration is going to 'hold executives accountable'?

Trump could literally drive over to your house and shoot you in the head for even suggesting such a thing.