Weiss Ratings, an independent rating agency, has warned that Florida homeowners filing legitimate claims for damage from Hurricanes Helene or Milton may face a high risk of denial from their insurance companies.
The agency's analysis of official filings revealed that several large Florida insurers denied nearly half of homeowner claims closed in 2023. Among these carriers were Castle Key Indemnity Company, which denied 47.1% of claims, State Farm Florida Insurance Company at 46.4%, and Castle Key Insurance Company at 46%.
Weiss Ratings founder, Dr Martin Weiss, noted that some insurers are short on reserves, which he attributed to funds being diverted to shareholders or parent companies outside of Florida.
“Thus, some are abusing their power to deny damage claims as a deliberate tactic to conserve cash and avoid bankruptcy,” he said.
Over the past two decades, more property insurers have declared bankruptcy in Florida than in all other states combined.
In 2023, Florida insurers closed 76,428 homeowner claims without payment to policyholders. Homeowners who were denied filed lawsuits against their insurers at a rate 18 times higher than the national average outside Florida, according to data from the National Association of Insurance Commissioners.
Weiss said that insurers who deny legitimate claims often send an implicit message encouraging policyholders to pursue lawsuits, and many homeowners did.
However, that legal recourse has become more difficult. After lobbying by the insurance industry, the state government passed legislation in 2023 that has made it more challenging for policyholders to sue their insurers.
Weiss Ratings provides safety ratings on insurers, banks, credit unions, and investment ratings on stocks, ETFs, and mutual funds.
The latest estimates from CoreLogic reveals that total losses from both wind and flooding range between $30.5 billion and $47.5 billion. This figure covers damage to residential and commercial properties across 16 states, accounting for wind damage as well as insured and uninsured losses from storm surge and inland flooding.
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