PANAMA CITY, Fla. (WMBB) — Several insurance companies have announced the cancellation of some policies of a halt to new business in Florida but not for the reason you think.
Trey Hutt with Hutt Insurance Agency said it’s not hurricanes 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 find out that for homeowners claims in Florida in the last five years only eight percent of the money that has been paid out has actually gone to homeowners.”
Hutt said it’s not every attorney, just a few bad apples that are causing problems for everyone else.
“We have a quirk in the law in Florida that makes it really, really profitable for attorneys to chase insurance companies,” Hutt said. “So there are those law firms that will go chase the fee instead of go do what’s best for the client. It’s really not the majority but the ones who are doing it are causing us enough trouble and costing everyone higher premiums.”
Insurance companies like TypTap, UPC, Farmer’s, St. John’s and Progressive are taking action.
“In the last few months, we’ve had several insurance companies announce they’re going to stop new business we’ve had five or six of those, we’ve had three or four announce they’re going to start canceling policies, most recently progressive has said they’re going to cancel 56,000 policies and we had one insurance go bankrupt,” Hutt said.
Hutt said people can expect having a difficult time finding coverage along with higher prices.
“Good insurance companies had to drop out of the market – that’s not good for anybody,” Hutt said. “That’s not good for us even if there are competitors, a good, healthy insurance market is a good thing for everybody.”
Hutt said he hasn’t seen this big of an exit since Hurricane Andrew and said we could be in this spot for the next couple of years.
He suggested if you’re in the market for new insurance to not wait until the last minute to start looking. He also said getting Four Point and Wind Mitigation inspections and presenting them to your agent will help with the buying process.