This past week was a significant one on the Florida insurance litigation front, with decisions in two major cases. But first, some levity to help start your Monday morning and a new workweek on the right foot that also has everything to do with our increasingly litigious society:
(Credit: Jeff Foxworthy from Netflix and Comedy Dynamics)
Comedian Jeff Foxworthy’s key insight and humorous commentary crystalizes the essence of runaway litigation. While you are chuckling, please take a minute to review our ongoing body of research on insurance litigation and the consumer advocacy and educational nature of this newsletter, now in its eighth year. Increasing litigation costs are one of the factors (along with rising reinsurance costs and claims creep) that’s driving double-digit homeowners rate increases and the resulting contraction of the private market, with taxpayer-backed Citizens Property Insurance Corporation left picking up the policies.
At its Board meeting last week, President Barry Gilway said Citizens now sits at just over 500,000 policies (up from 420,000 at the end of 2019) and projects a policy count of 540,000 at year end 2020 and well over 625,000 next year. New business has increased from 7,770 per month to 17,691 over the past twelve months. In his prepared remarks, Gilway noted these same factors above have created an “unhealthy” private insurance market. “We have to be more aggressive in this area. We need to look at every single option we can to help move people back into the private market and assist the private market get healthy,” he said.
As a reminder of why we – and the taxpayers of Florida – should care about this, Gilway took the board back to 2012, when Citizens had 1.5 million policyholders. “If we would have had a 1:100 year storm, we would have subjected Floridians to $11.6 billion in assessments. We were 23% of the market,” he reminded them, warning “we should never be in that position again.” There is no better spokesperson than Barry Gilway when he tells it like it is. His distinguished career gives him tremendous perspective.
Last week, I addressed the Central Florida CPCU chapter in a virtual presentation on our changing insurance marketplace. We talked about these issues as well as the solicitors going door to door encouraging claims, many of which shouldn’t be claims but rather, normal wear and tear and home maintenance. Senior citizens are particularly targeted. What I tried to convey was that the missing piece to providing consumer protection is law enforcement. In my opinion, law enforcement has a special place in the solution for seniors and other vulnerable homeowners. It’s our duty to bring these cases to their attention. As citizens of Florida, we have this duty to help. It helps us keep our promises to our policyholders.
LMA Newsletter of 9-28-20
