For years, Floridians have faced skyrocketing homeowners’ insurance premiums, with lawsuits often blamed for this financial burden. A recent study commissioned by the Legislature, however, sheds light on a more nuanced reality.
Examining 58,395 insurance claims leading to lawsuits in 2022, the study highlights a concentration in Miami-Dade, Broward, and Palm Beach counties, hinting at potentially fraudulent practices. Surprisingly, these litigated claims were over six times more expensive than non-litigated ones, potentially contributing to higher premiums statewide.
Article Summary
Here are the key takeaways:
- Is litigation really driving up insurance premiums in Florida? A legislative study challenges the narrative blaming lawsuits for Florida’s soaring homeowners’ insurance premiums.
- Litigation numbers in South Florida: Examining 58,395 insurance claims leading to lawsuits in 2022, the study reveals concentrations in certain counties, hinting at potential fraud. Despite being a small percentage of total claims, these litigated claims were over six times more expensive, potentially impacting statewide premiums.
- Litigation isn’t the only cause of rising premiums in Florida: The study’s data challenges Governor DeSantis and insurers’ rhetoric, suggesting other factors contribute to rising premiums.
- Insurance Companies delaying and underpaying claims: Delays in claims processing by insurers lead to some lawsuits, linking poor practices to consumer dissatisfaction.
- Despite revealing challenges in obtaining comprehensive data, the study emphasizes the need for improved industry record-keeping and reporting practices.
Article Analysis
The study shows that the issue of rising premiums in Florida is nuanced, revealing that litigated claims were a minor fraction of total closures in 2022, challenging common narratives.
Importantly, certain lawsuits stem from insurers dragging their feet in claims processing, shedding light on practices fostering discontent among consumers.
It underscores that litigation is only a piece of the larger puzzle, with the study emphasizing the substantial influence of storms and rising reinsurance costs. Claims by the industry suggesting that contingency fee multipliers drive frivolous cases are contradicted by the data, as the multiplier was rarely granted in 2022.
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Source: Lawrence Mower. (2024, January 8). Legislature’s Report On Florida Insurance Lawsuits Is Mixed. Tampa Bay Times.