Property insurance chaos confounds Florida homeowners

Prohibitive insurance premiums, a flurry of litigation and failing companies are combining to leave many Florida property owners uncovered and without options, consumers and industry critics say.

Although state lawmakers have sent bills design to address some of the issues to Gov. Ron DeSantis, who signed them Thursday, observers say it will be up to 18 months before the public realizes any impact from this week’s special session in Tallahassee.

Here are several snapshots of homeowners who have suffered from failures in the system, be it from canceled polices, skyrocketing rates or unresolved claims as a result of company insolvencies.

Last December, Mimi Bright, owner of a five-bedroom, three-bath home in Parkland, filed a claim with Avatar Property & Casualty Insurance Co. of Tampa to help cover the costs of water damages from a slab leak beneath a marble floor in one of the home’s bathrooms.

But Avatar entered into liquidation in March, while her claim of nearly $30,000 remains unresolved. After 6 months of not being able use her bathroom, she decided to pay for it herself while still fighting for a settlement that will cover her costs.

Bright, who is a marketing consultant and former Parkland city commissioner, said it took Avatar ten days to send out a leak detection company and another month to send an adjuster to assess the damage.

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The experts were also slow to learn that mold was part of the damage equation, Bright says.

Then an unexpected calamity struck: an adjuster who visited her home left a door open as he went outside to his truck. Instantly, her dogs bolted from the house and one of them was struck by a car.

Total cost of the veterinary bill: $23,000.

The vet bill aside, Avatar gave her a “very lowball estimate,” so she accepted a partial settlement of around $20,000 for the water damage.

“They did send me a partial settlement which we were disputing because they were giving me $20,000 for the entire thing,” Bright said. A number of years ago, the bathroom had been remodeled for $30,000.

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But the next month, Avatar was in receivership.

“When I went to deposit the [settlement] check it bounced,” she said

Her claim is now in the hands of the Florida Insurance Guaranty Association, the state agency which processes claims of customers of insurance companies that go belly-up. An agent there told Bright there are 18 claims to be processed ahead of her.

“Now I have no money,” Bright said.

So she’s taken out a $40,000 loan to cover the water damage repairs and the medical bills for the dog, whose condition from the accident has improved.

The latter is about the only positive thus far.

“I have nothing” from the claims process, Bright said. “If I didn’t take a loan it could take another 6 months. The question is how long do I want to live without my bedrooms and my bathroom? It’s already been six or seven months.”

In the meantime, she’s obtained a new policy from Citizens. but her annual premium has shot up from $4,540 with Avatar to $7,453.

“It’s just been a nightmare,” she said. “I finally for my mental sanity took a loan out and I’m doing it myself.”

Steve Haas, a retiree who has lived in the same West Boca Raton home for 30 years and was insured by the same company for 20, says he lost his policy with Federal National Insurance, also known as FedNat, for no specific reason pertaining to him.

“There has been no claim activity,” he said. “I guess my number came up. The long and the short of it is they wrote a letter saying due to economic circumstances and in order to stay in business, ‘see you, bye.’”

Haas said his home did suffer damages from Hurricane Wilma in 2005. But he didn’t file a claim because the cost of rebuilding his screen porch was less than the policy’s deductible.

“I am not a claims hog,” he said. “I always pay in full, right at the beginning of the policy.”

The farewell from FedNat came in a letter to Haas and more than 68,000 other policyholders. FedNat and affiliated firms said those customers have until June 29 at 12:01 a.m. to find another insurer. Industry analysts believe that would likely be Citizens.

“I’m certainly not the only pea in the pod,” Haas said.

“They said they have a bad financial situation and because of that they are cutting them [the policyholders] loose,” Haas added. “There was no no other specific reason.”

Nest Tuesday. Haas said, an inspector is scheduled to visit his home, built in 1980, to the start the process for finding a new policy.

“Once the inspection is done, I will get a report to them and start shopping,” he said. “There has been no discussion of rates yet. In talking to people at the insurance agency and reading the papers, heaven only knows what the [premium] number is going to be. I’ve got my fingers crossed.”

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But he added: “I anticipate the premium to be a lot higher than what has been,” which was $2,930 after discounts.

“I’m not broke,” Haas said. “But when you’re retired and you are living from your investments and Social Security, it is not fun when any expense is increased by whatever it may be — a thousand dollars or two thousand per year.”

Lou Medina, 80, has lived in his single-family home in Pembroke Pines since 1981.

The last three years in a row his premiums have risen 30% every year. It used to be $2,500 a year, he said. Now it’s $4,434.

Over the years, he said he’s filed claims to replace a roof after a hurricane, and to fix water damage in his home caused by an overflowing washing machine.

He said he was insured by State Farm for decades until the company dropped him six years ago.

Since then, he’s been covered by two other private firms and Citizens, which dropped him twice. His insurer now is VYRD, a St. Petersburg firm that serves Florida. The premium is now $6,656 versus $5,217 the year before, he said.

The prices, he argues, are anything but rational.

“You can’t kept keep ahead of it,” Medina said.

Medina dropped a policy for full replacement value, which covers the cost of rebuilding a home with a brand-new version, in favor of a cash value option that gives the owner the ability to cover the actual cost of damage at today’s values after depreciation.

“The insurance kept going up 25% or 30% every year and that’s crazy,” he said. “The insurance will be more than what the house is worth.”