Hopeful news came Monday for thousands of Florida homeowners who have been dropped by their insurance company or experienced their rates skyrocketing.
Gov. Ron DeSantis promised lawmakers will take up a special session in Tallahassee next month to address the property insurance crisis.
Independent property insurance agents are welcoming any chance for relief.
Kris Pontell, the owner of Pontell Insurance Group in Winter Springs, is struggling to take care of his customers, especially those on a fixed income.
[TRENDING: VIDEO: Man records himself being hit by driver who allegedly followed wife home in Orlando | Florida education officials reject 54 math textbooks for ‘attempts to indoctrinate students’ | Become a News 6 Insider (it’s free!)]
Because of the property insurance crisis, independent agents have very few options to offer customers and most of them are expensive compared to what they used to be.
“We’ve lost three to five private insurance companies [here in Florida] over the last two years to insolvency,” Pontell said. “And we have a few on the brink of going out of business that are barely hanging on. The biggest national ones don’t want to come to Florida, they don’t need to.”
Pontell used to have 20 or 30 insurance companies to get quotes from. Now?
“We’re lucky to get two or three,” Pontell said.
Usually, one of those two or three is Citizens, the state-run, state-funded insurer of last resort.
Citizens is overwhelmed, according to UCF history professor and News 6 political analyst Dr. Jim Clark.
“There’s so much controversy, I’m not sure anything is going to come out of this,” Clark said. “[The state of] Florida is the insurer of last resort — the Citizens insurance company — so if you can’t get insurance anywhere else they’ll sell you insurance. The problem is the number of people getting Citizens insurance has jumped from 400,000 to 700,000 and it may go past a million and it’s the state that guarantees that insurance. So if a huge hurricane, like an Andrew, or one of those should hit the state, we [taxpayers] could be on the hook for tens of billions of dollars.”
DeSantis announced the special session in May will tackle “issues like property insurance and trying to bring some sanity and stability and have a functioning market.”
Pontell said the problem largely centers around unscrupulous contractors, namely roofers that offer “free” roofs and even flood neighborhoods with salesmen after a storm to drum up business.
Pontell said unethical roofers are forcing insurers into bankruptcy by convincing customers to sign over their rights to the claim — the contract is called “assignment of benefits” — effectively taking the customer out of the negotiations between the roofer and the insurance company.
Some roofers will sue insurance companies that don’t pay up or pay as much as the roofer demands to replace the roof with 80% of all lawsuits against insurance companies in the U.S. are in Florida, according to Pontell.
“And what could have been maybe a $20,000 roof is three or four times that much with attorney’s fees,” Pontell said. “Premiums have doubled or tripled in the past year and if something doesn’t change, they’re going to go up again.”
Pontell and Clark suggested lawmakers immediately require that insurance payouts for roofs are for “actual cash value” rather than “replacement value,” meaning that roofers are only paid what the roof is worth, depending on the roof’s age. The homeowner would have to pay the rest of the cost. That would discourage roofers from offering “free” roofs and suing insurance companies.
Another solution: require that roof damage be covered by a separate deductible, much like a hurricane deductible.