December 2022

The state-backed Florida insurer has seen a huge uptick in policies the last two years, which has meant an increase in litigation costs, as well.

By Jim Saunders | June 27, 2022 at 12:04 AM

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer.

Citizens and private insurance companies have long complained that Florida is a hotbed for lawsuits that drive up costs in the property-insurance system. (Credit: Roman Motizov/Shutterstock)

It’s possible Florida’s state-backed Citizens Property Insurance Corp. could be on the path to spending $100 million to defend an increasing number of lawsuits this year.

The Citizens Board of Governors in December approved spending $50 million on outside attorneys needed to handle thousands of lawsuits in claims disputes. A Citizens committee on Thursday recommended approval of another $50 million, a proposal that the board likely will consider during a July 13 meeting.

Board member Scott Thomas, who chairs the Citizens Claims Committee, said officials had always anticipated the need for additional money to pay law firms. The board in December considered a proposal to approve spending $500 million over five years but decided to handle the issue incrementally.

“It’s because people are suing us, and we have to defend them (the lawsuits),” Thomas said.

The amount spent on attorneys, however, highlights the volume of litigation facing Citizens. During the first four months of this year, Citizens was served with 3,881 lawsuits — or 970 a month — and had 18,455 pending cases as of April 30, according to information presented Thursday to the Claims Committee.

“Those are some pretty crazy numbers,” committee member Jon Palmquist said.

As another indication of the scale of litigation, the committee Thursday also backed spending an additional $2.5 million as part of long-term contracts for court reporters. Citizens officials expect to exhaust an initially approved $18.5 million by the end of this year, with another $2.5 million needed to get through March 2023, according to information presented to the committee.

Citizens and private insurance companies have long complained that Florida is a hotbed for lawsuits that drive up costs in the property-insurance system. But Citizens also has seen massive growth in its number of policies during the past two years, which results in needing to defend more lawsuits.

As an illustration of the growth, Citizens had 883,333 policies as of the end of May, up from 609,805 policies a year earlier and 463,247 policies two years earlier. Those numbers have climbed as private insurers have shed customers and sought large rate increases because of financial problems.

Officials also say the COVID-19 pandemic caused a backlog of court cases, which has helped drive up the number of Citizens’ pending lawsuits.

Elaina Paskalakis, vice president of claims litigation for Citizens, said about 75 percent of the insurer’s lawsuits this year have come from Miami-Dade, Broward and Palm Beach counties. But she said those three counties accounted for a larger percentage of lawsuits in the past and that Citizens is seeing increasing numbers of cases from areas such as the Tampa Bay region.

State lawmakers during the past few years, including during a special session last month, have taken a series of steps to try to reduce insurance litigation.

But Citizens, which has contracts with 91 outside law firms, spent about $82.3 million in 2020 and $78.8 million in 2021 on legal services, according to information provided to the committee.




By Steve Hallo 

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer.

Through the first half of 2022, the U.S. excess and surplus market saw direct premiums, excluding Lloyd’s of London syndicates, grow 27.6% to reach $37.6 billion, according to S&P Global.

According to Fitch Ratings, the growth is being driven by hard-to-write risks and volatile businesses moving into the E&S market. Further, hard market pricing is boosting premium growth across all segments.

One of the biggest trends of 2022, and one that is likely to move into 2023, is more business flowing into the E&S and wholesale spaces, according to Danny Kaufman, president of Burns & Wilcox and vice president at its parent company H.W. Kaufman Group.

“It has been happening for the past few years, but the numbers for the non-admitted market are increasing and we see it happen at quite a quicker clip into next year,” Kaufman tells

The above slideshow reveals additional insights into what 2023 might have in store for the E&S market, according to executives with Aspen Insurance Holdings, AXA XL, Burns & Wilcox and Navigators.



Steve Hallo

Steve Hallo

Steve Hallo is managing editor of He can be reached at  

By William Rabb |

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer.

Some of the best-read and most-commented-on stories in the Southeast this year were mostly about Florida’s imploding insurance market, insurer insolvencies, and hurricanes, but also included news on Georgia’s auto insurance rates and proposed legislation on roofs.

The Top 10 Southeast Insurance Journal Articles for 2022:

  1. Another Big Insurer Stops Writing Homeowners Policies in Florida

Three Florida-based insurers slipped into insolvency in 2021 in a market that has been squeezed by a juggernaut of claims litigation, exaggerated roof claims, hurricanes and rising reinsurance costs. In February, United Property & Casualty Insurance Co., one of the largest carriers in the state, set off alarm bells that more insolvencies were on the way when it announced it would stop writing new business in the Sunshine State.

  1. St. Johns Insurance Insolvent, to be Liquidated, Florida DFS Reports

Just three weeks later, another large carrier, Johns Insurance, was put into liquidation by state regulators. Four more would follow before summer had turned to fall.

  1. Florida Building Codes Made a Big Difference for Newer Homes in Ian, Reports Show

When Hurricane Ian ground its way across Florida in September, it left a path of destruction from high winds, storm surge and heavy rains. But when the dust settled, researchers found that many newer homes had sustained only minimal damage while older structures had roofs ripped off or were completely washed away. The disparity showed that Florida’s vaunted building codes, toughened several times since the late 1990s, made a big difference, according to reports from university researchers.

  1. Florida CFO Calls for Ban on Assignments of Benefits, Limits on Public Adjusters

Two months before Florida lawmakers were set to convene in a second special legislative session to tackle the insurance crisis, officials were taken aback by the large number of public adjusters and plaintiffs’ attorneys that had descended on parts of southwest Florida after Hurricane Ian. The “swarms” prompted state Chief Financial Officer Jimmy Patronis to hold a news conference and call for an outright ban on assignment-of-benefits agreements and limits on fees paid to public adjusters. At the December special session, lawmakers granted one of his wishes and outlawed AOBs, but did not address public adjuster regulations.

  1. Florida Regulators, FAIA Slam Demotech for Reported Plans to Downgrade 17 Carriers

The Demotech financial rating firm in July created a firestorm of controversy when it informed 17 Florida insurers that they would soon be downgraded or lose their stability ratings altogether, due to financial losses and flagging surplus levels. Some in the industry said the downgrades were not unexpected, given Florida’s deeply stressed market. But the state’s chief financial officer, the insurance commissioner and the Florida Association of Insurance Agents cried “foul” and fired off letters objecting to it. Officials also hired a consulting firm to find alternatives to Demotech. Ultimately, the rating firm downgraded only three carriers, while others voluntarily withdrew from the firm’s review process.

  1. Pickleball Explosion in Florida Creating New Hits and Misses for Insurers, Agents

If you haven’t noticed, the sport known as pickleball has gone crazy across the country, and as many as 15 high-end pickleball clubs are now being built in Florida. With Florida’s insurance market in trouble, though, developers have found it difficult to find construction risk and liability insurance. And the big sticker shock won’t come until the clubs are built and the owners have to find property insurance. Some are hoping that insurance reforms passed at the Legislature’s December special session will soften the market a bit.

  1. Georgia Bill Would Require Full Replacement for Some Types of Roofs

Meanwhile, as Florida lawmakers contemplated repealing laws and codes that required full roof replacement when only a small part of the roof is damaged, a Georgia state representative fired up the insurance world by introducing a bill that would have done the opposite. Florida insurance buffs decried the bill, and it died in the Georgia House of Representatives.

  1. Florida Lawsuit Charges United P&C with RICO Violations in Widespread Claims Denials

In the long war between restoration companies and insurers in Florida, contractors suing carriers in assignment-of-benefits claims is nothing new. And insurers have long argued that some construction firms are colluding with adjusters and law firms to jack up claims and churn lawsuits. A Stuart, Florida, roofing and restoration company in January brought in a new weapon: The contractor claimed in a federal lawsuit that United Property & Casualty Insurance Co. had conspired with adjusters to systematically deny and underpay thousands of AOB roof claims after Hurricane Irma hit the state in 2017. A federal judge in October dismissed the suit on something of a technicality. He noted that federal law leaves it to states to regulate the business of insurance. A state suit is pending.

  1. Georgia Insurance Commissioner Slams Allstate’s 25% Auto Rate Increase

Georgia Insurance Commissioner John King, in the middle of a close reelection campaign, publicly shamed Allstate Insurance after it announced a 25% increase in auto insurance rates in the state. The insurer had employed a “file and use” method, as it’s known in Georgia – raising rates, then asking for approval, as allowed by law. But King said Allstate had bypassed his office, prompting some in the industry to say that the commissioner did not understand the rate review process.

  1. Florida Senate Committee Passes Reform Bill; Would Make Citizens ‘Noncompetitive’

The Florida Legislature met in May, in the first special session on insurance. But after more carrier insolvencies and a continued flood of claims litigation, lawmakers were called back in December to leave no stone unturned. After just three days, the House and Senate approved a sweeping reform package that will repeal the state’s one-way attorney fees, ban assignment-of-benefits agreements, offer a new layer of state-backed reinsurance, and require Citizens Property Insurance policyholders to also buy flood insurance, among a number of other changes.


Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer.

No one should think that one agency can do things that other agencies cannot, there are just agencies willing to put your clients at risk & should not do it, but welcome to Florida. If your policy should not have been bound for coverage then in a claim, you are not covered end of story. People take chances & risks, but foolishly just to save a few dollars or just to get someone to closing. We all want to get someone to closing , but not get sued for claims not covered which does happen quite frequently. At a closing, roof issues are very possible w/ several scenarios you should understand, but the roof having leaks plays a major role in the ability to do something. Electrical & plumbing issues are not possible without the seller making repairs before closing. Surplus carriers can also be used in many scenarios to help a client get to closing & having them sign off on the coverages is very critical. I am able to do classes live or zoom for 1 hour or 3. The 3 hour class is good for 3 hours of CE credit w/the DBPR, but we must have at least 15 people in that class. The 1 hour is stictly educational & questions are encouraged by all. This topics covered also do Inc,ude Flood Insurance which will now be required by Citizens Insurance on 4/1/2023 & we expect all carriers to follow suit shortly after. Learn aboit the new Bill passed by Tallahassee & learn how this will impact your business in 2023, because it surely will.

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer.

Florida’s struggles to retain a property and casualty (P&C) insurance market have made headlines and spurred multiple special legislative sessions in 2022. The May session ended in a package of regulatory overhauls and an unprecedented move for state-backed reinsurance, yet the fall of Hurricane Ian tested those newly drafted reforms already. As the legislature reconsiders the state of private homeowner’s insurance, it remains to be seen whether proposed reforms can plug the holes of Florida’s beleaguered system.

General struggles in P&C across the country

As climate change increases the number and severity of natural disasters and their accompanying damages, states particularly vulnerable to drought or floods have struggled to maintain coverage options for homeowners.

California has stop-gap measures enabling the insurance commissioner to put a moratorium on home insurance cancellations in disaster areas. In the wake of Hurricane Katrina, the biggest insurers pulled out of homeowners insurance in Louisiana. That state now maintains its P&C market through smaller, more localized insurers, which the state tailors its regulatory culture to, as evidenced by the 2022 legislative packages.

Overall, a McKinsey report echoes the anecdotal evidence of these states: P&C insurance has in recent years left larger incidents uninsured, and tends to perform better for smaller carriers interested in localized coverage and underwriting. Unfortunately, there’s still no widespread solution that delivers that coverage at a more affordable rate for consumers. Fewer insureds often means more expensive coverage for those who do retain it. 

Broadly speaking, then, Florida is hardly alone in needing to address a property insurance market that has as many challenges as it does opportunities. Yet, in a season that’s seen relatively few disastrous incidents thus far, why are so many insurance companies leaving Florida?

Why is homeowners insurance so expensive in Florida?

There’s no single reason homeowners insurance has ballooned – although it’s true that the typical Florida homeowners insurance premium is three times the national average. Instead, there are a few reasons. For one thing, insurers’ underwriting and premium assessments haven’t kept up with rising risk, which has eaten into surpluses and caused losses in profitability. However, a few factors unique to Florida have created a snowball effect that goes well beyond the market adjustments we see in other coastal states (more on how these create a perfect storm for carriers later on):

  • Roof coverage and replacement rules: Florida law requires homeowners to replace roofs that have sustained 25 percent or more in damage. However, carriers may require homeowners to meet a deductible for coverage, or may reject a roof claim outright.
  • Assignment of benefits: An assignment of benefits, or AOB, allows a homeowner to sign their policy benefits over to a roofing company so the roofer can directly approach an insurance carrier about the cost and reimbursement of roofing repairs, or enlist a public adjuster to back up their assessment of damage. 
  • Attorney fee multiplier: A court case in 2017 affirmed and strengthened a legal principle in Florida that an attorney can collect as much as 250 percent of a typical attorney fee if they win a lawsuit on behalf of a homeowner. The rule is based on the understanding that these are typically “contingency cases,” meaning attorneys only get paid if they win. So, homeowners’ suits can be unattractive when compared to other cases where your firm is guaranteed compensation for their billable hours. The idea of the fee multiplier was to encourage attorneys to take on cases on behalf of homeowners.
Man in distress stands in front of home destroyed by a storm.

For an anecdotal perspective on how these factors have played out in recent years, several media outlets have profiled homeowners whose stories have a similar thread

Following a storm, a Florida property owner is approached by a roofing contractor who asserts that the property’s roof has substantial enough damage to warrant a total replacement. The contractor assures the homeowner that the damage will be fully covered by their insurance; in fact, if the homeowner will just sign an AOB, the contractor and their legal team can even handle the insurance end of the roof replacement for them, no hassle!

The Florida property owner signs the AOB, and then has to wait for months, or years, while the roofing contractor engages an insurance carrier. The carrier may dispute that the roof has damage equaling or exceeding 25 percent of its value. The roofing contractor then sues the carrier for the benefits, leading to months of protracted litigation, and often resulting in coverage for a brand new roof as well as tens of thousands of dollars in attorneys fees, incentivized by those 100 to 250 percent multipliers. 

If the carrier wins, it still has to pay its attorneys’ fees.

Taken together, these rules have yielded a crisis for the Florida homeowners insurance industry. Consider: Florida largely avoided a major hurricane season from 2018 to autumn 2022. Prior to Hurricane Ian, Florida homeowners composed 9 percent of annual claims in the U.S. However, Florida accounted for 79 percent of annual homeowners claims lawsuits.

The downstream result is premiums that have risen in triplicate for some property owners, and insurers have become increasingly unwilling to take the risk of insuring roofs over the age of 10 years old. 

A neighborhood is flooded. A road can be seen under the water.

Florida P&C market in crisis as insurers leave, ratings downgraded

The Florida homeowners insurance crisis reached a fever pitch in the last year as insurers have backed out of the state entirely.

In a proclamation calling for a special session of the legislature in late May 2022, Gov. Ron DeSantis justified the emergency measure with stats such as, “the Florida insurance industry has seen two straight years of net underwriting losses exceeding $1 billion each year,” and “Citizens Property Insurance, the State of Florida’s public insurer of last resort, has seen an increase of 399,822 policies since the beginning of 2020 and is on track to be over 1 million policies by year end.” 

So, very clearly, the market is losing money, and more people are being forced onto the state-backed insurer after their insurers leave the market.

And, to be clear, insurers are certainly leaving the market. 

In July 2022, Bankers Insurance Group became the thirteenth insurance company to begin liquidating or stop offering new policies just in 2022. For perspective, the Tampa Bay Times noted there were 63 P&C insurers required to report financials in the state as of the end of 2020 (a list that included companies in the process of liquidation even then). That same year, the Times said, an analysis of the market showed only four companies had demonstrated profitability at all.

And, lest you think condominium owners in Florida have it better… After a tragic building collapse that killed 98 people in Surfside, Florida, in 2021, a $1 billion insurance settlement has driven P&C carriers away from insuring Florida condos. For carriers that choose to remain in the Florida condo market, there’s so little competition that prices can double, triple, or more and consumers have no option to shop elsewhere. 

Florida’s May special session P&C insurance legislation

With the available pool of insurers facing contractions of more than 10 percent, DeSantis and the legislature went back to the table after the regular session to address some of the underlying factors that have driven market collapse in the last five years.

Florida capitol

May 24, 2022, the legislature passed sweeping legislation aimed at reforming the market, with the Florida governor signing it into law two days later.

Provisions of the law include:

  • $2 billion allocated to a Reinsurance to Assist Policy program, giving insurance companies assistance to place reinsurance contracts for coverage
  • $150 million in grants to Florida homeowners for “home hardening,” aiming to make homes more resilient to storm damage
  • Requirements that carriers cover roofs less than 15 years old, or roofs that “have at least five years of useful life remaining”
  • New standards for attorney fee multipliers and attorney’s fee assignments, “disincentivizing frivolous claims”

Some lawmakers in Florida sought to bar policyholders from contesting claims denials in court altogether, while others defended claims suits, saying they’re an important enforcement mechanism that incentivize carriers to pay claims in the first place.

Other criticisms argued that the laws don’t go far enough to protect consumers, who will likely not see reduced or even plateauing premium costs for years after the law’s implementation. One property insurance law group criticized the law as one-sided, admitting policyholder and contractor fraud has played a role, but saying:

“The ‘F’ word is not a one-way street… Contrary to popular belief, insurance companies continue to avoid their contractual and statutory obligations despite their incessant concerns about defending ‘rampant’ lawsuits. Actually addressing the truly frivolous litigation is step one in beginning to solve our property insurance market issue, but why stop there? … The same efforts need to be targeted at combating the unspoken immunity that is insurer fraud…”

Demotech homeowners P&C insurance rating downgrade

While Florida legislators hope the new law will forestall more P&C market turbulence, there are still choppy waters ahead. 

For one thing, Florida insurance carriers rely heavily on Demotech, a ratings agency, to provide judgments about solvency for the carriers in the state. In July, Demotech’s plans to downgrade the ratings of 17 P&C carriers brought swift furor from the Florida Association of Insurance Agents (FAIA) and state regulators. By downgrading these carriers, Demotech would be signaling to consumers that these carriers  aren’t adequately pricing and underwriting their contracts, and warns of placing contracts with them. 

A downgrade could also have secondary repercussions, as many mortgage backers require homeowners to hold insurance policies with companies that meet certain solvency standards.

The FAIA and state regulators didn’t name which carriers Demotech planned to downgrade, but seven were made public in the beginning of August.

With the number of active P&C carriers willing to provide new homeowner policies in the state hovering under 50, at this point, having 17 downgraded could be devastating to the overall sustainability of the market.

In an effort to keep the market afloat, the Florida Office of Insurance Regulation (OIR) took a truly unprecedented step, offering temporary reinsurance contracts with the full backing of the state’s insurance company, Citizens Property Insurance, and, further, the state’s guaranty associationA news release from Commissioner David Altmaier’s office said the arrangement should satisfy requirements for mortgages backed by Fannie Mae and Freddie Mac.

Future of Florida homeowners insurance market remains uncertain

The Florida OIR and legislature are clearly making efforts to shore up the market, harden homes, and retain a profitable environment safe for consumers. 

Yet, Hurricane Ian – which killed more than 100 people in September 2022 and caused $40 billion to $70 billion in property damage – and Hurricane Nicole – the October 2022 hurricane that caused an estimated $1.6 billion in insured losses – have left Florida’s remaining insurers reeling.

While the state has several options to back up funding, such as the Florida Hurricane Catastrophe Fund, the federal government has spent $1.74 billion on Ian recovery, even outside of the National Flood Insurance Program’s (NFIP) anticipated billions in claims payouts (somewhere from $3.5 billion to $5.3 billion). We have yet to see what the cost to Florida’s Citizens Property Insurance will be once it settles claims and reinsurance payouts, but DeSantis said in recent statements to the Orlando Weekly that Citizens had a $6 billion or more surplus, and would be able to weather the claims.

It’s worth pointing out that, even in lieu of these reserves, Citizens may maintain solvency by collecting fees from other insurance carriers or from tax funding. Private P&C insurance carriers don’t have that capability. As DeSantis’s emergency order prevents insurers from dropping coverage or non-renewing affected areas for the first few months after the disaster, it won’t be until some months into 2023 that Florida’s private property insurers see the full impact of the hurricanes.

In the meantime, DeSantis also called the legislature back to session in December to address the insurance situation. This makes the second special session in 2022 specifically for Florida’s P&C insurance situation. What the legislature will decide, whether private homeowner’s insurance will remain competitive and affordable, and how the state government will avoid becoming the de facto property insurer in the state remain to be seen.

At AgentSync, there’s nothing we can do to directly affect P&C claims and Florida market conditions. However, for carriers, MGAs, and agencies looking for ways to reduce cost and risk within their businesses, we can help streamline producer and adjuster licensing, verification, and appointments. For more on how, check out our solutions.

By William Rabb

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer.

Florida officials have taken strong action against two of the insurance industry’s most-detested adversaries, disbarring a notorious plaintiffs’ attorney who filed thousands of frivolous claims lawsuits, and moving to revoke the license of a public adjuster that obstructed insurers in multiple claims.

The actions against attorney Scot Strems and adjuster Scott David Thomas come two weeks after the Florida Legislature approved Senate Bill 2A, a sweeping insurance reform measure, and will likely be seen as high points for a year that had witnessed six insurer insolvencies and mounting litigation losses. Florida-based insurers have complained that some lawyers and public adjusters that have gamed the system in recent years, costing carriers millions of dollars in legal expenses.

“I believe the significant developments should deter similar actions moving forward, but the historic reforms contained in SB 2A are ultimately where the rubber meets the road when it comes to halting abusive practices,” said Kevin Comerer, a Florida insurance lobbyist and consultant.

Adjuster Could Lose License

First, the adjuster disciplinary action. Florida’s Department of Financial Services on Dec. 16 formally asked an administrative judge to revoke the license of Scott David Thomas, owner of Indemnity Public Adjusters, based in south Florida. The department’s attorneys outlined nine counts charging that Thomas had violated Florida laws by repeatedly harassing insurance company adjusters and engineers, sometimes threatening them with violence and thwarting their inspections.

His actions against Citizens’ Property Insurance Corp., Tower Hill Insurance, Lloyd’s of London and QBE Specialty Insurance resulted in claims being denied altogether or delayed for months, DFS said in the proposed order filed with the Florida Department of Administrative Hearings.

Thomas’ strategy may have been to wear down insurers so that they would forget about their own property inspections and accept his fee-paid adjustment reports.

“Respondent’s repeated hostile behavior is designed to make the process inhospitable to the insurer in the hopes of securing a better claim for his client,” the DFS proposed recommended order reads.

“We agree with the recommendation. None of what he did benefitted the customer at all,” said Michael Peltier, communications director for Citizens.

Thomas’ obstruction led to added expenses for the insurers, Peltier and DFS said. In one example, Thomas agreed to an inspection of a home damaged in Hurricane Irma in 2017, but failed to tell Citizens that a tarp was covering the roof, the DFS filing noted. To have the tarp removed, a Thomas employee quoted a price of $7,500. A Citizens adjuster later obtained a price of $2,000 from a contractor – still high for any tarp removal.

“All of that cost gets rolled into premiums,” Peltier noted.

At other times, Thomas insisted only on Saturday inspections by insurance companies, even though homeowners were available during the week or had agreed to a weekday visit from the insurer, DFS said. Often, he demanded excessive and extraneous documentation from insurer inspectors, including proof of workers’ compensation insurance.

In one examination under oath, Thomas was so belligerent to a court reporter that a new reporter had to be assigned to finish the session, the DFS order explained. At that same meeting, Thomas allegedly tried to keep a document he was asked to review, then lamented that the insurer’s attorney had accused him of stealing.

At an inspection, Thomas reportedly made threatening statements to an appraiser: “I was in the Marine Corps in Iraq for 12 years and I love to fight,” DFS quotes Thomas as saying.

He also failed to give a physical address for his business in papers filed with the department, the filing notes.

Thomas and his attorney, Matthew Ladd, could not be reached for comment Monday about the DFS recommendation.

Florida property insurance officials have said for the past few years that Thomas’ actions may be considered extreme, but that some other public adjusters have engaged in underhanded tactics to inflate damage amounts and to block insurers’ access to insureds’ properties. Florida’s chief financial officer also railed about the “swarming” numbers of PAs that descended on southwest Florida just days after Hurricane Ian slammed the area in late September, and called for new limits on their fees.

At the special session Dec. 12-14, Florida lawmakers did not address concerns about public adjusters. But several said that with SB 2A ending one-way attorney fees and assignment-of-benefit agreements, plaintiffs’ lawyers will now have less incentive to team up with public adjusters on claims.

DFS filed its initial complaint against Thomas in March of this year after hearing from several insurance companies. Thomas responded and a hearing was held in August. Florida law provides that a DOAH judge can suspend an adjuster’s license for six months per allegation. But because the total penalty in Thomas’ case would come to more than four years – more than the maximum suspension time of 24 months – DFS urged the judge to revoke the license altogether.

The judge may also impose fines of up to $5,000 per count. The filing did not indicate when the DOAH judge could make a ruling. DOAH decisions can be appealed to a Florida District Court of Appeals.

Although the insurer complaints about Thomas began as long ago as 2019, Citizens officials are not critical of the pace of the DFS investigation. “They’re doing what they can. It takes a lot to investigate these types of things,” Peltier said.

Attorney Disbarred

In an action that insurers had been hoping for over the past two years, the Florida Supreme Court on Dec. 22 blocked Coral Gables claimants’ attorney Scot Strems from practicing law in the state. The court overrode a referee’s recommendation of a two-year suspension and it also ordered Strems to pay more than $45,000 in costs incurred by the Florida Bar in prosecuting the investigation.

One insurance defense attorney said the disbarment shows the perils that claimants’ lawyers face when they try to engage in the “mass lawsuit filing” model that Strems and a few other law firms had taken to an extreme level. An insurance industry consultant blogged that Strems’ punishment marks the “collapse of an evil empire.”

Strems in 2020 became the poster child for what many in the Florida insurance industry said was the root of the Florida property insurance problem: plaintiffs’ attorneys filing large numbers of unnecessary claims lawsuits, leading to an explosion in litigation costs for carriers.

After the Florida Bar filed its complaint against Strems in 2020, he was suspended from practice following a referee’s report. Strems appealed to the Supreme Court, as did the Bar, which urged permanent disbarment. Numerous insurance interests had filed complaints about Strems and his law firm, charging that in many cases, his firm filed multiple suits on the same claim.

Last week, the high court, which has often come down harder than a referee has recommended on lawyer discipline, landed on disbarment – but not permanently.

“Although he has certainly engaged in ethically questionable behavior, he has not demonstrated that he is not amenable to rehabilitation,” the justices wrote. “Permanent disbarment is warranted only where an attorney’s conduct indicates he or she engages in a persistent course of unrepentant and egregious misconduct and is beyond redemption.”

The court’s 37-page order shows that Strems’ violations involved far more than “the unfettered pursuit of frivolous lawsuits.” He also submitted false or misleading affidavits in two cases in which he negotiated settlements. In one case, Strems attached a purported email chain between him and opposing counsel. But he failed to include seven emails from the other lawyer that directly conflicted with Strems’ assertions in the affidavit, the court explained.

In another case, Strems’ firm represented an 84-year-old homeowner who had filed a claim after a hurricane. The woman agreed to an attorney fee of 30% of the settlement, or whatever the court awarded in fees. After Strems negotiated a $45,000 settlement, though, his firm took half of that as a fee.

In answer to the Bar’s complaint against him, Strems in 2020 denied most of the charges. In a statement to Insurance Journal Tuesday, Strems’ attorney, Benedict Kuehne, said that Strems is deeply disappointed with the disbarment decision.

“For his entire career, Scot dedicated his professional endeavors to helping wronged homeowners pursue their legitimate grievances against insurance companies that refused to pay for damages to their homes,” Kuehne said. “He has never intentionally or purposely violated Bar rules. The referee, after considering all the evidence and the absence of any prior difficulties with bar rules, deemed a modest suspension as the appropriate resolution.”

Strems’ actions not only cost insurance companies, but also hurt his own clients, the court found. Between 2016 and 2018, many of his suits were dismissed because Strems and his associates missed court deadlines and “willfully” violated procedural rules, the court noted. One trial court judge said that the firm engaged in “blatant obstruction of justice” and practiced delaying tactics in virtually every case.

As his firm took on more and more insurance claims cases, Strems repeatedly failed to manage the growing workload or hire enough attorneys. That resulted in a number of court sanctions against the firm, often on a weekly basis

“Strems’ focus on bringing in new cases rather than implementing sufficient measures to handle SLF’s volume of cases demonstrates his selfish motive,” the high court noted.

On one matter, the Supreme Court let Strems off the hook. The referee had recommended discipline after an associate attorney in Strems’ firm failed to discuss a settlement offer with the client. While the court had held Strems accountable for his firm’s actions in other instances, in this one it said that he was not responsible for another lawyer’s violations.

In the end, that did not impact the severity of the court’s order. Considering the cumulative violations, the justices said that disbarment was needed and will achieve the three purposes of attorney discipline spelled out in Bar rules: It will protect the public from unethical conduct; will punish misconduct and encourage rehabilitation by the lawyer; and will deter others from engaging in similar misdeeds.

Strems closed his law firm in 2020 but some of the lawyers with the firm formed another one. He now intends to ask the Supreme Court to reconsider the severity of the sanctions, “based on his long track record of doing the right thing under often difficult circumstances,” Kuehne said. “His prior unblemished career should merit an opportunity to prove his value to the profession and the public.”

One insurance defense attorneys wasn’t so sanguine.

“It’s refreshing to see the state’s ethics laws and regulations being enforced in the P&C industry,” said Tiffany Rothenberg, with Kelley Kronenberg law firm. “Imposing consequences on bad actors is necessary for deterrence, which in turn, protects Florida homeowners and fosters a more palatable environment for insurers to operate in the state — an all-round benefit.

Strems faced other legal actions over his tactics. In May, he settled a lawsuit brought by Citizens Property Insurance, charging that his law firm had engaged in fraud and racketeering, had filed multiple claims at the same time, and provided false invoices and inflated costs. The settlement amount, $1 million, was far less than Citizens had initially demanded.

Going forward, state lawmakers must prioritize forward-looking solutions to forestall future crises before they begin.

By Jonathan Levin

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer.

The underlying risks themselves — intensifying hurricanes, rising seas and climate change more broadly — aren’t going away, and Florida remains woefully unprepared to deal with the costs. (Credit: Credit: SeanPavonePhoto/Adobe Stock)

(Bloomberg Opinion) — Florida’s Republican-controlled legislature has finally taken meaningful steps toward addressing the state’s runaway property insurance crisis. Unfortunately, it waited until the market was on the brink of collapse when good options were impossible to come by. Going forward, the legislature must prioritize forward-looking solutions to forestall future crises before they begin.

The Sunshine State, of course, is where expensive real estate bumps up against ever-intensifying hurricanes, the looming threat of rising seas and the most notoriously litigious insurance market in the country. It’s also a market full of smaller regional insurers with business models that rely on access to reinsurance, effectively insurance for insurers. The rising cost of those policies has been at least one cause of the latest turbulence.

The popular knock on the legislation is that it amounts to a bailout of the insurance industry that won’t immediately address homeowners’ surging premiums. That’s accurate, but more than keeping a lid on premiums, Florida lawmakers needed to make sure that residents retained access to insurance at all.

The legislation would create a $1 billion state-backed reinsurance fund that primary insurers can turn to for coverage. It also addresses companies’ runaway litigation costs by taking away an advantage that homeowners’ had enjoyed against insurers in court. Finally, it took steps to reduce the number of homeowners covered by a state-backed insurer of last resort, which offers below-market premiums that the industry contends hurt its ability to charge fair prices.

The reinsurance fund is, of course, the quintessential short-term fix to tide the market over until, hopefully, the other measures start to pay dividends. It’s clearly not sustainable to imagine a world in which the state is left holding the bag for private insurers’ catastrophic risk.

The change to the litigation outlook may have a more enduring impact, but it comes at a cost. Advocates for the insurance industry have long contended that the problem with Florida is the long tail of claims and lawsuits that has followed every natural disaster. Governor DeSantis claims that the state accounts for more than three-quarters of the nation’s property insurance lawsuits even though it has less than a 10th of the claims.

Part of the issue, as the argument goes, is that the state’s laws made it so attractive to sue. Until now, the law has dictated that defendants (insurers) had to pay the attorney’s fees for prevailing plaintiffs (ostensibly homeowners) — the so-called one-way attorney fee statute. The threat of massive attorneys’ fees incentivized companies to just settle claims, and in recent years, it has devolved into something of a racket. In the most egregious cases, contractors would encourage homeowners to file claims under false pretenses and then help bring the claims to opportunistic lawyers. (Most claims probably fall into more of a gray area and aren’t so obviously fraudulent, but the extreme versions are what you often hear from Republican lawmakers.) There’s little doubt that the lawsuits pushed up insurers’ costs.

Eliminating one-way attorney fees

To address the matter, the new legislation does away with the one-way attorney fee benefit, a politically difficult move that takes away a benefit to homeowners that — for all its abuse — also helped many people. But the situation had become so dire that it was a necessary step to preserve access to the market.

The final change of note aims to ease the burden of the crisis on Citizens Property Insurance Corp., the state insurer of last resort. It may also push private insurance premiums higher, all else being equal.

Moving policies off Citizens’ book

Homeowners can get a Citizens policy at an implicitly subsidized rate as long as private premiums are at least 20% more expensive, which is increasingly the case.

Once they get there, homeowners tend to stick with Citizens, pushing the Citizens portfolio above a million homes this year, including some of the riskiest properties that simply can’t get insured anywhere else. That may be putting an artificial cap on market prices, too, preventing insurers from charging what they deem to be a reasonable price for the risk. Under the new legislation, homeowners will be forced to leave Citizens once they can again find private-sector policies within 20% of the price of those issued by Citizens.

These reforms were largely necessary to address a crisis unfolding in real time, but they have come far too late and address only part of the problem. This back-against-the-wall situation arrived after years of both parties kicking the can down the road on an issue that’s only going to get more challenging as sea levels rise.

On balance, the measures could control the litigation costs and allow companies to charge what they view as a legitimate premium. Ultimately, companies will always be happy to write new business if they think they can estimate their exposure and charge a reasonable price for their risk. The reforms to the litigation outlook and the insurer of last resort will help them do just that.

But the underlying risks themselves — intensifying hurricanes, rising seas and climate change more broadly — aren’t going away, and Florida remains woefully unprepared to deal with the costs. Development continues apace in some of the most obviously perilous coastal and barrier island communities. Insurers will surely be pleased that they can better balance risk and return going forward, and homeowners should be pleased that they won’t completely lose access to insurance. But how long they’ll be able to afford the cost is another question, and the Florida legislature has failed to address that fundamental problem of having costly real estate facing a looming storm.

Opinions expressed here are the author’s own.


Hurricane Ian, a Category 4 hurricane, made landfall Sept. 28, 2022, in Southwest Florida and crossed the state.

By News Service of Florida

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer.

The National Flood Insurance Program has paid more than $1.46 billion to policyholders who sustained damage in Hurricane Ian, as the total continues to steadily climb, the Federal Emergency Management Agency said.

The total was up from about $1.2 billion a week earlier and from $882 million on Dec. 1, 2022. The program has received about 45,300 claims from the Category 4 hurricane, which made landfall Sept. 28 in Southwest Florida and crossed the state.

Residents who have mortgages on properties in designated flood zones are required to have flood insurance, which is mostly purchased through the federal program. But most Floridians don’t have flood insurance, exacerbating problems from Ian.

Residential property insurance policies cover wind damage, but not flood damage.

Florida lawmakers last week approved a plan that will phase in a requirement for customers of the state-backed Citizens Property Insurance Corp. to buy flood insurance.


Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer.

On December 22, 2022, the Florida Supreme Court recommended that Florida attorney, Scot Strems, be found guilty of professional misconduct, and moved to immediately disbar Strems based on his cumulative misconduct. See attached for the entire decision.

Insurance groups have long described Strems as “the poster child” for what they said was widespread abuse of the legal system by some Florida plaintiffs’ attorneys.

Strems had been charged with filing thousands of suits against insurers, many of them on the same claim. These charges included informing a client of a settlement with a property insurance company but then secretly settling with the insurer for twice as much, then attempting to pocket a large, unauthorized fee. This decision by the Florida Supreme Court was the final word on Stremes’ conduct and future.

The rampant and extreme fraudulent litigation happening in Florida is a primary cause of the alarming state of Florida’s homeowners insurance market. We hope this decision by the Florida Supreme Court sends a resounding message to all Florida attorneys that fraudulent and unnecessary litigation will not be tolerated.

By William Rabb 

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer.

The Florida Legislature’s insurance rescue bill, approved last week, won’t take effect soon enough to help policyholders and insurance agents who’ve had no response from beleaguered United Property & Casualty Co. on Hurricane Ian claims.

The lack of information has meant that some Florida homeowners, with damaged roofs, blown-out windows, or rain-soaked belongings, also can’t receive aid from the Federal Emergency Management Agency, which requires proof of insurance claims denials.

“There’s been no denial, no communication, just nothing from United,” said Sylvia Van Dyke, an Englewood, Florida, resident who estimates her home received more than $60,000 in damage when Ian hit the area Sept. 28.

Van Dyke filed a claim with United on Oct. 3. By Florida law, insurers have 90 days to respond. That window is about to close, and so is another one: Van Dyke has applied for a U.S. Small Business Administration loan, but that, too, is barred until the homeowner can show her level of insurance payout. The SBA deadline is Jan. 12, Van Dyke said. Meanwhile, she’s paid out of her pocket for a new roof.

United, which had some 140,000 policies in force in Florida as of November, is now in an orderly runoff in Florida and other states after years of heavy underwriting losses. The runoff process is not an insolvency or liquidation. But in some ways it may be less certain than liquidation, in which the Florida Insurance Guaranty Association would take over most outstanding claims.

Insurance agents are feeling the heat from irate United policyholders, but without information from the insurer and from regulators, they don’t have many answers.

“It’s very frustrating for agents and for policyholders,” said Laura Pearce, vice president and general counsel for the Florida Association of Insurance Agents. “We’ve been getting a lot of the same questions.”

Van Dyke said her door continues to leak with every rain.

Pearce said that the Florida Office of Insurance Regulation may be working to transition some of United’s outstanding claims to the state-backed Citizens Property Insurance Corp. OIR had not confirmed that by late Wednesday and a Citizens spokesman said corporation officials have not heard about such a plan.

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United officials did not respond to calls and emails from Insurance Journal. OIR officials did not provide answers to questions about United’s lack of response.

Under Florida statutes, property insurers are barred from canceling homeowner policies after a state emergency order has been issued for a storm. The prohibition on cancellation extends until 90 after repairs have been made. And emergency orders from OIR, issued after Ian and Hurricane Nicole hit the state, underscored that and extended the time for insureds to provide information to their carriers.

A consent order on United’s runoff plan, approved early this month by OIR, requires United to extend coverage for some policies that were set for non-renewal but which weren’t properly notified. The company must provide 120 days’ notice on those non-renewals.

The consent order, signed by Insurance Commissioner David Altmaier, who leaves office next week, also notes that United must “have qualified and trained staff available to respond to policyholder inquiries” about cancellations.

But Van Dyke pointed out that her situation is not necessarily a cancellation. As yet, it’s not even a non-renewal or a claim denial.

Van Dyke, a former chief technology officer for the U.S. Patent Office, became so dissatisfied with United’s lack of response that last week she sent a letter to the company’s CEO, Dan Peed. The letter charged that United is violating her civil rights by preventing her from obtaining federal assistance for her home.

It’s not clear how many policyholders are in the same fix. In its third quarter financial report, United said it had expects to receive as many as 30,000 claims as a result of Hurricane Ian – about half as many as Citizens, the state’s largest property insurer. But the carrier has not said how many claims remain unpaid.

Van Dyke’s Englewood neighbor, Joan Riswold, who insured her home two years ago with United, is doubly frustrated because she’s seen other neighbors, insured by other carriers, get their claims paid promptly. And while she’s complained to OIR and communicated with staff, little has changed.

Riswold said she was recently able to reach one company representative by phone. The woman informed her that her roof claim had been closed. Riswold was shocked, since she had received nothing in writing from United. The homeowner said that United may have closed the claim because they had her hurricane deductible wrong – $2,000 higher than the policy states.

“This is not acceptable, not when we’ve all been through this (hurricane) experience,” she said.

Riswold is a retired nurse who spent most of her career in California. She said that after dealing with California’s government agencies and insurance companies on various matters, “I’m not used to this flagrant disregard for people’s needs.”

She said she recently took steps to hire an attorney.

It’s not just United that may be giving insureds and agents headaches in Florida’s distressed market after the costly hurricane. Pearce said that several carriers have been attempting to non-renew thousands of policies after Hurricane Ian, despite the Florida law that bars non-renewals while hurricane claims are pending.

“I think some carriers feel like they’re going to push the envelope until someone says they have to stay on the policy. It’s a big problem,” Pearce said.

And with Altmaier suddenly stepping down, and OIR’s chief deputy commissioner, Susanne Murphy, departing earlier this month, the regulatory office may not be in a position to flex its muscle on United or other carriers, at least for a few months, agents and insureds now fear.

Top photo: Sylvia Van Dyke’s roof, damaged by Hurricane Ian. (Courtesy, Sylvia Van Dyke)

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