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Tasha Carter

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State forum highlights huge flood insurance issues


Date: June 16, 2016
Source: Insurance Business America
Author:  Lyle Adriano


A recent forum has revealed the problematic state of Florida's flood insurance market, with consumers, insurers and even providers placing blame on each other.

The state held its Troubled Water panel Tuesday to address the issues plaguing the state’s flood insurance market, reported Palm Beach Post. The forum was attended by over a hundred executives, attorneys, contractors, and consumers from all over the state.

Insurance consumer advocate Sha’Ron James helped organize the forum, which transpired at Florida Atlantic University.

The forum sought to find answers for South Florida’s biggest problem: inflated costs for non-storm water damage claims. It was hoped that dialog between consumers, insurers, and contractors would help Florida’s legislators and regulators come up with proper solutions to the issue.

The inflation is tied closely to the “assignment of benefits” abuse that is running rampant in the state. The abuse happens whenever a consumer—either willingly or unknowingly—signs over his or her control of insurance benefits to repair contractors, who could then demand higher claims. The issue has exacerbated to the point that even attorneys could get involved and drive up claim costs further by taking the issues to court.

Some insurers present in the event felt that the inflated water damage claims hurt not just them, but their consumers as well. To offset the high claims, insurers had to raise their rates in response.
“This is not a victimless crime,” said Homeowners Choice CEO Paresh Patel. “We have to figure out a way to protect the many from the actions of a few.”

Roughly 38% of Homeowners Choice’s 157,000 policies are in Palm Beach, Broward and Miami-Dade counties. Patel claims that 88% of the lawsuits the company deals with are from those areas.

Orlando-based attorney Lee Jacobson offered a counterpoint, citing record profits data from companies that have complained about the so-called issue. Jacobson believes that insurers are “crying wolf” in order to force changes to state laws—regulations that could unreasonably restrict the rights of consumers to choose an attorney to represent them to get full and fair payment of claims.

Dave DeBlander, a restoration and cleaning company owner based in Pensacola, raised the issue of abusive insurers in the forum. DeBlander spoke of insurers who failed to quickly respond to consumers that needed repairs immediately and those that refused to put small repair companies like his on their “preferred providers” list, despite the number of industry accolades his company has attained.