Over the past week there have been headlines in the insurance trade press where one company had to increase their Hurricane Irma reserves by $200 million, and a leading reinsurer expressing frustration that the dreaded Hurricane Irma “loss creep” (a funny sounding term meaning that losses continue to increase or “creep up” when they should be decreasing) is “deeply disappointing.” Also cited was the unrealized benefits so far of last year’s Assignment of Benefits (AOB) reforms.
We can expect that the translation of “deeply disappointing” to mean “increasing reinsurance costs” to account for the disappointment. Another headline said that the amount of increase would be 20% and others are saying it will be 30%. Increased reinsurance costs are passed on in increased costs of insurance for consumers. Meanwhile, one insurance company has already received a 22% average statewide increase in its homeowners line (Edison Insurance) and another company (Capitol Preferred) went before Florida regulators at a hearing this past Friday seeking a 47% HO3 increase (which after further study by the company is hovering around 36%) – driven by AOB abuse and increased overall litigation costs.
We are heading into the 5th week of session and we adjourn March 13. Will the legislature expand on the AOB reform from last year to stop “the hustle” of contractors knocking on doors and duping consumers into signing contracts just so the contract can be a ticket to a lawsuit? I spoke to three more consumers in their 80’s last week and they all shared the same story. Roofing solicitor knocked on their front door, asked them to sign a document for a new roof, conveniently didn’t have any business cards and no way to leave the consumer with a copy of what they had just signed, then promptly inflated the claim amount and called in a claim, only to have it denied for lack of documentation for the exorbitant roof price and a court case ensued so the attorney could gain fees! Over and over again…I am working with these consumers to have their roofing contracts voided by the court. Please contact me with your ideas and input!
Up next, the latest action from the legislature plus an assortment of other insurance-related morsels.
LMA Newsletter of 2/10/20
