Broken system: Florida’s insurance mess front and center 6 months after Hurricane Ian

Six months ago, Hurricane Ian slammed into Southwest Florida with destructive winds, a biblical storm surge and an apocalyptic 60-mile-wide eye wall.

Six months later, many region residents still feel they are getting slammed by the storm.

Frustration is surging with insurance companies and the handling of Ian-related claims and coverage.

Alison Ferguson, Rosie Buccine and Margie Cochran are among local residents and property owners in that frustrated camp upset over delays with claims, low-ball damage compensation from insurance companies — and red tides of cancellations and higher premiums.

And they are not alone.

Residents, small business owners and local nonprofit leaders continue to face the stiff winds of Florida's malfunctioning insurance system, a half year after the winds and waters of Ian tore off roofs and flooded homes.

CONSTERNATION IN CAPE HAZE

Buccine and Ferguson own condominiums at the Cape Haze Condominium Resort close to where Hurricane Ian first hit the Florida shore.

Ferguson and her husband, Peter, own a condo in the unit community — as does Buccine, the president of the Cape Haze Resort Community Association. The 144-unit development saw major damage from the storm.

Like other condo projects, there are insurance carriers for the interiors and interior systems of individual owners' units. Another carrier is used for the development's exterior structure.

Buccine said the Cape Haze condos have received an estimated $22 million to $24 million in damage.

So far, she said, the condo association's insurance carrier, Tampa-based Heritage Insurance, has paid out $6.7 million.

"Woefully shy of us being able to get started (on repairs)," Buccine said.

She said 25 of her condo neighbors are full-time residents of the community. While six units were untouched, others were totaled by the storm.

"Many of them have no walls, no ceilings, no bathrooms, no kitchens," Buccine said.

The condo HOA hired an attorney in December to press the insurance carrier and potentially pursue litigation after frustrations over delays, hiccups over damages estimates and lack of communication.

"We were given assurance payments were coming, but they never came," Buccine said.

Buccine said the HOA had to go into its financial reserves after the storm to help bring some livability and protection to exposed units and is seeking loans to help move the rebuilding process forward.

After hiring a lawyer, HOA received a $4 million payment in late December and another $1.6 million in late February from Heritage, Buccine said.

Heritage did not respond to requests for comment.

Buccine said a new adjuster is bringing in a drywall contractor to start some repair work.

She just wants storm damage funding "to be made whole," she said.

"We are not looking for any funding we don't deserve," Buccine said, mirroring frustrations across Florida with insurance companies. "We don't feel this is a fair deal."

Alison Ferguson, an insurance agent from Colorado, said the Florida condo serves as a second home and was "completely gutted" by Ian. She and her husband have had good deals with their individual insurance carrier — New Jersey-based Spinnaker Insurance Co.

"They've been, overall, pretty good to work with," Ferguson said.

But like other residents, she's concerned about the Heritage situation and getting the condo property's exteriors and other community covered assets such as roofs repaired.

"Heritage is a whole other story," she said. "There is a pretty big delta between what has been paid and what is needed to make the condos whole again."

'WHY IS IT TAKING SO LONG?'

In North Port, Margie Cochran, and her husband Don, moved into a manufactured home in the Holiday Park community in May 2022.

The couple came to Florida from Michigan and previously lived in Ruskin.

Cochran said the hurricane cut a destructive path through their 815-home community.

"Over 300 had major damage. A lot of them are being demolished," she said.

Cochran is upset with her homeowners insurance company, American Integrity Insurance.

She said the storm damaged the roof to her manufactured home and an attached Florida room. There was water and a downed carport.

"It flooded everything," Cochran said.

The home was purchased for $224,000 and its insured for $240,000. Cochran said damage estimates was $144,000. She said received $6,600, so far, from her insurance company. That includes two checks that were made incorrectly, Cochran said.

"We are living in the house. We bought air purifiers. We have water in the underbelly. We're living with the musty smell," she said. "Why are they taking so long?"

Cochran said she has been impressed with service and car insurance claims handled by Progressive Insurance, including for a truck damaged during the Category 4 hurricane.

Cochran said there are still tarps serving as roofs, and she has now hired an attorney to press the insurance carrier.

American Integrity did not respond to requests for comment.

MORE CANCELLATIONS, PULLOUTS

Private insurance companies are continuing the trend of pulling out of the Florida markets after surges of claims after big storms and waves of litigation.

Robyn Gendreau said she and her boyfriend recently received a cancellation notice from St. Petersburg-based United Property & Casualty Insurance.

UPC announced last month it was selling its "personal lines business" to Tampa-based Slide Insurance. UPC canceled 72,000 Florida policies with Slide offering replacement policies.

But some other UPC policies were, or are, slated to be canceled outside of the deal with Slide, according to the Tampa-based company.

Gendreau is still looking for a replacement policy with new quotes in the $3,000 annual premium range up from her previous $950 homeowners insurance costs.

"We're still looking," Gendreau said. "It's really hard. The rates have jumped exponentially."

UPC did not respond, directly, to a request for comment.

However, when the company was put into receivership Feb. 27, its parent company, United Insurance Holdings Corp., blamed Ian for fourth quarter and year-end financial losses in a March earnings call.

"We are deeply disappointed with our fourth quarter results driven by Hurricane Ian loss development that ultimately exhausted the reinsurance available to our subsidiary, United Property & Casualty Insurance Company," CEO Dan Peed said. "Our immediate focus has shifted to providing the Florida Department of Financial Services the Company's full cooperation to complete the separation and run-off of UPC."

The insurer will continue to sell commercial insurance.

CUSTOMER SERVICES PROMISES

Slide Insurance CEO and co-founder Bruce Lucas said his Florida-based company is working to get the 72,000 policies acquired fully transferred from UPC.

"This has been accelerated due to UPC's receivership," Lucas said. "In the future, these policyholders can expect enhanced portal capabilities as well as streamlined service and claims."

He said Slide does not plan on canceling the policies it picked up from UPC and stressed the company's focus on serving customers including those in disputes over claims.

"Resolution may include re-inspecting or re-reviewing the case, connecting the customer to trusted vendor partners who can help when there are construction delays, providing documentation so that they may seek flood damage assistance with the appropriate entity, and so on," Lucas said. "Our goal in all cases is to honor the policy contract and help the policyholder get their home back to pre-loss condition as soon as possible."

LACK OF TRUST

The challenge is many Florida policyholders don't trust the insurance industry — especially with hurricane-related claims.

That includes skepticism toward insurance industry-backed changes moving to fruition through the Republican-controlled Legislature.

Cochran said she sent a note to Gov. Ron DeSantis — who backs insurance favored changes to make it harder to sue carriers — saying the state needs to fix behaviors of insurance companies first and foremost.

"Why is the government allowing this?" she said. "June 1, we go into another hurricane season."

Insurance industry groups, the Florida Chamber of Commerce and other business allies of DeSantis back the changes pushed by GOP lawmakers which aim to reduce lawsuits brought against carriers.

"We have a lot of pressures on the private insurance market," Florida Chamber of Commerce President/CEO Mark Wilson said.

Wilson and other business and insurance advocates point to a surge of lawsuits.

"We have 76% of the nation's lawsuits on homeowners insurance," Wilson said, adding Florida has as much one-third of the world's insurance exposure related to hurricanes and tropical storms.

Waves of litigation — whether it's related to hurricane damage, replacement of roofs on homes or sometimes dubious windshield auto insurance claims — drives up insurance costs giving Florida some of the most expensive auto and property rates in the U.S.

"We need more insurance companies coming to Florida who are willing to write auto insurance and homeowners insurance so we can have a more competitive market," Wilson said.

The GOP and industry-backed bills aim to change rules related to create more transparency related to who is responsible for damages, curtailing fee multipliers requested by attorneys in civil and insurance cases and changing rules related to attorneys fees.

"The incentive by a personal injury trial lawyer is to always ask for 3, 4, 5 times (usual attorneys fees)," Wilson said. "The big losers in the legal reforms are the people on the billboard, radio and television encouraging you to sue somebody."

The Florida Justice Association, which represents personal injury and other plaintiffs attorneys, opposes the insurance changes in House Bill 837 and Senate Bill 236 — and other skeptics contend DeSantis and GOP legislators are carrying water for insurance interests.

"We cannot allow 'Big Insurance' or multi-billion-dollar corporations to dictate our rights and block the courthouse doors," FJA President Curry Pajcic said.

DeSantis said state insurance and financial regulators are investigating consumer complaints regarding lowball hurricane insurance claims and cancellations.

"They need to be held accountable and they are going to be aggressively doing it," DeSantis said at a March 17 news conference.

On Friday, he signed House Bill 837 into law.