Maxwell: Floridians looking at little insurance help from Legislature — again

Let’s start today’s column with a flashback.

Two months ago, the Florida Legislature was about to convene, and top lawmakers were vowing to tackle the state’s insurance crisis.

Despite their prior “reform” efforts, homeowners in Florida had watched their already-high rates rise for nine consecutive quarters. And Florida media had just exposed an industry scandal involving hidden profit margins at Florida insurance companies that claimed they were struggling and needed to jack up rates.

Florida hid insurance profits and did industry’s bidding | Commentary

As a result, House Speaker Daniel Perez kicked off the session eight weeks ago by pledging action. Perez vowed to use “the full range of tools — including issuing subpoenas, putting witnesses under oath, and hiring outside experts.”

The tough talk generated the kind of headlines Perez craved and that Floridians wanted to read: “Florida House Speaker Danny Perez announces a major investigation into insurance companies.”

Now flash forward to today when the headlines are quite different: “Property Insurance Changes Appear Unlikely.” And “Hope for legislative property insurance fix dimming …”

Instead of getting insurance reform, we got a bill that officially renames the Gulf of Mexico as the “Gulf of America.” That’ll show the storms.

Most of you probably aren’t shocked. I’m not. When a reader asked me a few weeks ago if I believed GOP lawmakers would actually crack down on insurance companies who were hiding their profits, I wrote: “I believe there are a lot of politicians who will talk about how wrong it was — and then go right back to doing the industry’s bidding.”

And here we are.

I still believe Florida lawmakers should hold insurance companies to account for the big story from earlier this year when the Miami Herald and Tampa Bay Times revealed that Florida companies were claiming losses and thin profit margins while shipping billions of dollars to affiliated companies in other states, sometimes by paying the affiliates excessive fees. In other words: Some companies were crying poor to get lawmakers to do them financial favors while concealing their true profits.

Even worse, the investigation revealed that state insurance officials knew all this but hid the information from both lawmakers and the public for nearly two years.

Florida insurance companies steered money to investors while claiming losses, study says

Floridians were rightfully outraged. Lawmakers supposedly were as well, vowing to get answers. But two months later, not much has changed. Perez says he still wants answers and reform, but said the Senate hasn’t been “as bullish” about the issue.

So Florida’s insurance market remains a high-priced mess.

Still, we have to be honest: We can’t blame that entirely on insurance companies. We’re a mess because our state is one gigantic policy risk.

Florida is a magnet for hurricanes and susceptible to rising waters — no matter how many references to “climate change” GOP lawmakers vote to scrub from statutes and textbooks.

Textbook authors told climate change references must be cut to get Florida’s OK

I’ve argued many times before that Florida has only a couple of real options to meaningfully drive down rates.

One would be to invest more money in the state-run Citizens Insurance program, expanding it so that it becomes something like Medicare for property insurance, a state-run insurance program most everyone can access.

Another would be to use tax dollars to subsidize the market even more than the state already does by investing even more in underwriting of reinsurance or through direct subsidies — in exchange for total transparency and guaranteed rate reductions.

But both of those options are costly and involve hard work. So instead, lawmakers have largely just nibbled around the edges.

The state has indeed attracted more companies into the market, partly through lawsuit reform (which means it’s now tougher to sue an insurer that tries to unfairly deny paying a claim).

It’s good to have new companies, but also worth noting that these aren’t your parents’ insurance companies. Many didn’t even exist a few years ago. Forget Allstate, State Farm and Travelers. The new companies have names like Mangrove, Patriot Select and Slide.

And in many cases, Florida homeowners didn’t choose to do business with new companies. They were forced onto them when the state-run Citizens program involuntarily “depopulated” these customers to private insurers at higher rates.

So we have a market cobbled together with untested newcomers and a disturbing number of homeowners who are simply opting for less coverage or no coverage at all just to make ends meet. That last part is a recipe for trouble.

Some of the new companies look promising. As the Sun-Sentinel reported this week, Patriot Select, for example, has some veteran insurance players involved and solid preliminary financial ratings.

But a handful of encouraging anecdotes doesn’t address Florida’s root problem of being a high-risk state. Nor does it provide Floridians what lawmakers vowed just two months ago — a look at the real financials of insurance companies who claim they need the public’s help to survive.

There’s still a bit of time. Both of those things require hard work, stiff backbones and a lot more effort than it takes to stage a “Gulf of America” photo opp.

[email protected]

©2025 Orlando Sentinel. Visit orlandosentinel.com. Distributed by Tribune Content Agency, LLC.