ORLANDO, Fla. – Florida’s property insurance market was already in bad shape before hurricane season, and with two storms causing billions of dollars in damage, many homeowners are wondering what the future holds.
State lawmakers are meeting this week for a special session dedicated to addressing the crisis and stabilizing the market.
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Nine companies have gone bankrupt in less than two years and a number of others have left the state. Meanwhile, homeowners have seen their premiums triple on average or they’ve been dropped altogether, which is why the state-backed Citizens Insurance has now become the largest property insurer in Florida.
Anchor Justin Warmoth joined Tom Cotton with Hugh Cotton Insurance on “The Weekly” to discuss the moves lawmakers need to make to stabilize the market.
“Citizens is intended to be a market of last resort,” Cotton said. “It’s intended to be a landing pad for folks who have no other option. It’s not a parking lot, it’s a landing pad. We have to be able to depopulate Citizens and maintain the provisions of consumer choice.”
Carriers blame mounting litigation and attorneys fees for their financial woes, and according to a proclamation about the upcoming special session, lawmakers could make it harder for Florida homeowners to sue their insurers.
Data from the state’s Office of Insurance Regulation shows 76% of the nation’s homeowners’ lawsuits against insurance companies are filed in Florida, yet the state accounts for just 8% of all claims in the U.S.
“There are carriers at the border waiting to come in,” Cotton said. “But they’re not going to commit resources when a gun can be held to their head in a courtroom, and if the consumer wins $1 more than they offered on the initial claim, they have to pay the lawyer a quarter of a million dollars. They’re not going to do it.”
Watch the full interview in the video player above.
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