Ins. agents: Citizens will be insuring more Fla. homes
ORLANDO, Fla. – April 24, 2017 – Get used to the idea that more South Florida homeowners will be forced back to state-run Citizens Property Insurance Corp., the so-called insurer of last resort.
That’s the message members of the Professional Insurance Agents of Florida will be hearing when they convene at the Rosen Plaza Hotel in Orlando on April 27-28 for their annual “Agent Expo.”
Prospects for a legislative solution to costly claims abuses in South Florida are dimming again this year with just two weeks left in this year’s session. If the Legislature fails to address “assignment of benefits” abuses for a fifth-straight year, more private insurers will likely decide parts or all of the tri-county region are too risky and refuse to take new customers, said Corey G. Mathews, CEO and executive vice president of the insurance agents’ trade group.
“Unfortunately, from what we’re hearing, it’s already happening,” Mathews said in an interview Friday. “I’m hearing from agents who say they submitted [a new policy] in a zip code they wrote [a policy in] last week, and the insurer is saying ‘Sorry, we’re closed in that zip code.'”
Citizens spokesman Michael Peltier said the company expects to grow by about 50,000 in coming months – a sharp reversal from the previous five years in which about a million policies were absorbed into the private market. Most of those policies will be in South Florida, he said.
Last year, Heritage Property & Casualty Insurance stopped writing new policies in Miami-Dade, Broward and Palm Beach counties, then later resumed writing to a “very select” number of homeowners through a small number of agents.
In December, Citizens released a report quoting United Property & Casualty president John Forney as saying his company stopped writing new business in Miami-Dade and Broward because claims had become far more costly there than in the rest of the state.
Citizens and other insurers have been asking the Legislature to help stem a flood of lawsuits generated by South Florida water damage restoration companies and about a dozen law firms. They say the contractors convince policyholders to sign over benefits of their policies, then quickly file suit if insurers refuse to pay inflated claims.
Attorneys are motivated by a law that shields policyholders from paying their insurer’s legal fees if they sue a company in a claim dispute and lose, but lets them collect legal fees if the insurer loses or agrees to pay more than originally offered.
Contractors have learned to secure an assignment of benefits to assert the same right, and that encourages them to file large numbers of suits with little risk, insurers say.
This year, insurers backed a legislative bill that would bar contractors from collecting legal fees if working under an assignment, but the chair of the Senate’s Banking and Insurance Committee refused to bring it up for debate.
A House bill that would award fees under a complicated formula was advanced this week but faces poor prospects of enactment with so little time left in the session……
For the full Article go to Sun-Sentinel.