Eight home insurers fined total of $2.1 million for violations after hurricanes Ian and Idalia

Eight home insurance companies have been fined a total of $2.1 million for claims-handling misconduct, including failure to deny or pay claims on a timely basis, following hurricanes Ian and Idalia, the Florida Office of Insurance Regulation said on Tuesday.

The eight companies, identified in a news release, are American Coastal Insurance Company, American Mobile Insurance Exchange, Centauri Specialty Insurance Company, Clear Blue Insurance Company, Monarch National Insurance Company, Sutton National Insurance Company, Tower Hill Prime Insurance Company and TypTap Insurance Company.

Insurance Commissioner Mike Yaworsky warned insurers to watch how they handle claims that might arise during the current hurricane season, which the agency said is now in “full swing.”

“Commissioner Yaworsky wants to make it clear that [the office’s] Market Conduct Unit is ready to deploy during storms to make sure claims handling practices are up to standard,” the release said.

Yaworsky was quoted in the release as adding, “Capital is pouring in and the market is stabilizing, but our office holds insurers to high standards. It is important that consumers have confidence that they are getting what they pay for.”

The release also quoted Chief Financial Officer Blaise Ingoglia as promising to hold insurance companies accountable “if they do not uphold the contractual agreement that they sign with their policyholders.”

The findings were based on market conduct examinations of how 10 companies responded to initial, reopened and supplemental claims. The examinations found “several findings of misconduct” for eight of the 10 companies, according to the release.

Hurricane Ian struck the southwest coast of Florida in late September 2022 and headed northeast before leaving the state. Hurricane Idalia struck the state’s Big Bend region the following August.

Notable to policyholders were the number of times companies did not pay or issue denials of coverage of Hurricane Ian claims within the 90-day deadline required by state law. In this list, followed by fines imposed by the office, they were:

— American Coastal: 34 (20.4%) of 167 claims, $400,000.

— American Mobile: 2 (0.8%) of 241 claims, $400,000.

— Centauri Specialty: 12 (4.4%) of 272 claims, $100,000.

— Clear Blue: 27 (11.8%) of 228 claims, $400,000.

— Monarch National: 39 (12.2%) of 320 claims, $325,000.

— Sutton National: 3 (1.4%) of 211 claims, $50,000.

— Tower Hill Prime: 21 (7.1%) of 295 claims, $250,000.

— TypTap: 17 (5.3%) of 319 claims, $150,000.

Examining companies

The state Office of Insurance Regulation, in its news release, said the “findings included using adjusters not properly appointed, not acknowledging receipt of claims communications in a timely manner, not including certain disclosure statements when providing estimates on damage claims, failing to provide Homeowners Claims Bill of Rights, failing to pay interest when owed and more.”

These violations were among those cited in examination reports:

Centauri Specialty was cited for failing to ensure field adjusters inspected Hurricane Ian losses within 72 hours of assignments, a violation of the company’s claims handling manual.

Monarch did not utilize “properly appointed” adjusters in 88 of 320 Hurricane Ian claims reviewed. Clear Blue was cited for the same misconduct in 86 of 228 reviewed claims.

TypTap did not ensure independent adjusters delivered inspection reports in 73 of 319 claims reviewed.

American Mobile provided non-compliant preliminary or partial estimates of damages in 148 of 241 Hurricane Ian claims reviewed and 69 of 85 claims reviewed for Hurricane Idalia.

Mark Friedlander, senior director of media relations for the industry-funded Insurance Information Institute, said the fines were appropriate.

“The role of the property-casualty industry is to be a financial first responder to help their customers recover from catastrophes as quickly as possible. Most Florida insurers acted in this manner following the six hurricanes which struck the state over the past three seasons,” he told the South Florida Sun Sentinel. “The role of the state’s insurance regulator is to ensure insurance carriers follow Florida regulations when handling storm claims. When they don’t, they should be held accountable.”

Yaworsky was quoted in the release as vowing to deploy office examiners “to make sure claims management practices are efficient and handled appropriately.”

Regulators will “be paying particularly close attention to any company who has had concerning performance behavior in the past,” he said.

During the 2023-24 budget year, the office issued more than $2.8 million in fines and secured more than $8 million in restitution, the release said. During the current budget year, the office has secured more than $660,450 in restitution.

Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071 or by email at [email protected].

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