Property insurance attorney offers perspective on Florida’s insurance crisis

ORLANDO, Florida. – Insurance companies protecting Florida homeowners are going bankrupt as seven of the state’s carriers have gone insolvent in recent weeks.

Meanwhile, agencies that are still afloat are doing what they can to stay financially sound by raising premiums, dropping policies and turning down new business.

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The crisis, according to insurance companies, is fueled by the increase in litigation and fraud. Carriers operating in the Sunshine State shelled out more than $1 billion last year in underwriting losses, in addition to paying claims.

John Tolley, a property insurance attorney at JT Law, told presenter Justin Warmoth on “The Weekly” that the crisis isn’t just about homeowners suing insurers.

“It’s kind of a one-sided story,” Tolley said. “These insurance companies have millions of dollars to spend. It’s always that people commit fraud against the insurance company. It is never the insurance company that commits fraud.

Florida lawmakers have called for a special session to reform the state’s insurance market, but that likely won’t happen until after November’s midterms.

Tolley, who used to represent insurance companies before switching sides, said the bill — which essentially gives roofs a monetary value — isn’t fair to Florida homeowners.

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“A lot of the reform that’s being proposed is one-sided,” Tolley said. “The major senator on this actually owns an insurance brokerage firm. He has a financial incentive to draft legislation favorable to insurance companies.

The insurance market, according to Tolley, began to change in 2016 after Hurricane Irma caused massive damage in Florida.

“What I’m seeing here is they’re denying more claims than they’ve ever had since Hurricane Irma, and they’re underpaying more claims than they’ve ever had. had since Hurricane Irma,” Tolley said. “Basically, Irma has been a game changer in the state of Florida for these types of claims, and therefore litigation obviously needs to be filed.”

In a recent episode of “The Weekly”, Hugh Cotton Insurance CEO Tom Cotton said there were 117,000 real estate claims filed for litigation, representing more than 75% of real estate insurance lawsuits filed in the states. -United.

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Cotton said he agrees with the legislation surrounding the value of a house’s roof.

“People treat their home insurance policy like a warranty policy for a roof,” Cotton said. “Right now, if you have damage to a roof and it’s five years old, you get a new roof. If your roof is 25 years old and damaged, you get a brand new roof.

Insurers also accuse predatory roofing companies of going door to door asking homeowners if they would like a new roof. Tolley acknowledged alleged fraud committed by some “bad actors”, but said they were not causing insurance companies financial hardship.

“Obviously I get their point, but there are two sides to every story,” Tolley said. “We have to ask ourselves why. Is this a situation where you wrote too many policies and didn’t have enough assets, knowing you didn’t have any? Is this a situation where you didn’t buy enough reinsurance at the time? »

Tolley also discussed a recent case handled by his law firm which revealed that a major carrier in Florida committed insurance fraud during Hurricane Irma claims, which ultimately led to a RICO civil case filed against the carrier in the Central District of Florida.

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“I just recently filed basically four whistleblowers against a major insurance company here in Florida,” Tolley said. “They all came out under oath and testified that this insurance company forced them not to list damages on their report and forced them to zero out the estimates, and ultimately deny these event-related claims. because they weren’t going to provide coverage. They instigated these adjusters by telling them they were going to pay them faster.”

Watch the full interview in the video player above.

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