PANAMA CITY, Fla. (WMBB) — Several insurance companies have announced the cancellation of some new business stop policies in Florida, but not for the reason you think.
Trey Hutt of the Hutt Insurance Agency said it’s not hurricanes that are causing the mass exodus of insurance companies from the state — it’s fraud and litigation.
“We have a real fraud problem and a real litigation problem in Florida,” Hutt said. “Most people would be really surprised to learn that for landlord claims in Florida over the past five years, only eight percent of the money that was paid out actually went to the landlords.”
Hutt said it’s not all avocados, just a few bad apples that are causing trouble for everyone.
“We have a quirk in Florida law that makes it really, really profitable for lawyers to chase insurance companies,” Hutt said. “So there are these law firms that go after fees instead of doing what’s best for the client. It’s really not the majority, but those who do cause enough trouble for us and cost everyone higher premiums.
Insurance companies like TypTap, UPC, Farmer’s, St. John’s and Progressive are taking action.
“Over the last few months several insurance companies have announced that they are going to stop new business, we have had five or six, we have had three or four that have announced that they will start canceling policies , most recently the progressives said they were going to cancel 56,000 policies and we had insurance that went bankrupt,” Hutt said.
Hutt said people can expect to struggle to find coverage with higher prices.
“Good insurance companies had to get out of the market – it’s not good for anyone,” Hutt said. “It’s not good for us, even if there are competitors, a good healthy insurance market is good for everyone.”
Hutt said he hadn’t seen such an outing since Hurricane Andrew and said we could be there for the next two years.
He suggested if you’re looking for new insurance, don’t wait until the last minute to start looking. He also said that getting four-point and wind attenuation inspections and presenting them to your agent will make the buying process easier.