State's own insurance company needs help

Florida lawmakers — especially Senate President Ben Albritton — want to make sure property insurance companies are paying their claims.

It seems too many people who lost homes, or whose property was severely damaged, were told "too bad." There are thousands of claims that have gone unpaid.

Albritton, in a non-nonsense warning, said he would work to make sure every legitimate claim is paid.

He — and all lawmakers — may want to start with their own state-run insurance company of last resort — Citizens Property Insurance.

In a story that broke recently and was printed in most every newspaper in the state, The Tampa Bay Times/Miami Herald staff reported that Citizens paid less than half the claims filed for hurricanes in 2023. And that pattern may be continuing after Hurricanes Helene and Milton.

That almost unbelievable news garnered a response from Citizens that tried to explain how something that sounds so bad really was not unusual.

The response was in reference to a report by Weiss Ratings analysis firm that said Citizens denied about 17,000 claims, or 50.4%, made in 2023. That data, according to a South Florida Sun Sentinel story, came from the firm's own annual report.

Weiss said the percentage of unpaid claims was higher than other Florida insurers that closed their books in about 46% of claims without paying.

Our question is what good is insurance if they're not going to pay when you have damage? This seems ludicrous.

Citizens made its argument as to why it did not pay.

Reasons, according to the South Florida Sun Sentinel story, included:

Citizens writes some of the riskiest policies in the state — earning the name the insurer of last resort. Because of that, many policies are categorized "wind-only" and deductibles for other damage are higher. That results in policies not paying off.

Some homeowners whose policies were booted from Citizens mistakenly filed their claims with the state-backed company instead of their new insurer.

Citizens required flood insurance for any property appraised at $600,000 or more. That damage is insured by the National Flood Insurance Program.

In short, damages not exceeding the deductible and flood damage which was not covered by Citizens were the two major reasons most policyholders were given.

The South Florida Sun Sentinel quoted a spokesman for Weiss saying, despite the rebuttal, it appeared "... Citizens does not currently understand precisely why each claim was denied for this season's storms."

The hard facts that our Legislature should be looking at is Citizens denied 50.4% of claims filed in 2023. Its record of paying claims has never been great.

Weiss reported, according to South Florida Sun Sentinel, Florida homeowners had the worst chance in the nation of receiving a paycheck after filing a claim in 2022.

Over the last five years, South Florida Sun Sentinel reported, claims by Citizens' customers that were not paid went from a low of 40.2% to 50.5%. Those numbers were part of the Weiss analysis.

To say these findings give Citizens — and our state as a whole — a black eye is not unreasonable.

The state formed Citizens for good reason and had good intentions of helping homeowners protect their investment. But the troubled insurance market in Florida, battered by busy hurricane seasons, has forced tens of thousands of homeowners to flock to Citizens, raising the number of policyholders it must account for well past what it ever expected.

The Legislature will have a real challenge coming up with a solution to the problem. But if Florida is to remain attractive to prospective homebuyers, it must find some answers.

— Charlotte County Sun