It’s no secret that Florida is in the midst of a home insurance crisis.

Home insurance companies are dropping thousands of Floridians from their policies, and state lawmakers are scrambling to find a solution. Later, in May 2022, they’re holding a special session to try and resolve the issue.

At the Culbertson Agency, this has been a frustrating thing that we’ve had to deal with.

We are a Florida home insurance agency who writes through home insurance carriers.

Some customers may think that we as an agency get to set insurance premiums and come up with rates based on our preferences, but we’re insured by the same insurance carriers as you.

We don’t get special treatment or rates from these carriers for our home either.

Home Insurance Companies are Dropping Some Florida Homeowners

If you’re a homeowner in Florida, your insurance rates are most likely going up rapidly, with no end in sight.

Insurers are raising rates by a lot, and this is causing homeowners to have to pay more.

Some insurers are going bankrupt or refusing to cover people, so it is hard for homeowners.

This is not fair because homeowners did not cause this problem.

The reason for the mass policy cancellations.

Cause 1: Home Insurance Fraud

The root of the problem is home insurance fraud, which has driven up costs for everyone.

Unregulated and unlicensed bad actors are artificially increasing claim frequency and severity in Florida, which results in higher rates with less coverage.

State attorneys must be aware of how fraud is impacting all consumers in the state, not just those involved in a particular claim.

Reducing fraud throughout the state can help to lower premiums.

According to a 2021 study by Florida’s Insurance Consumer Advocate, insurance fraud costs each typical family between $400 and $700 per year in additional premium payments.

Cause 2: Natural Disaster Claims

Natural disasters have also taken their toll, leading to billions of dollars in losses for insurers.

As a result, three major insurers have left the state in just the past three months.

On “The Weekly,” Tom Cotton, owner of Hugh Cotton Insurance in Orlando, said the problem is a culmination of problems that haven’t been addressed for several years, but litigation is the crucial component.

“In the last two years, homeowners carriers doing business in the state of Florida have had $3.5 billion in claims paid, and that is without there being a major storm across the coastline.”

Cotton went on to say, “In 2021, there were 117,000 property claims filed for litigation. In the other 49 states there were 900. Litigation is what’s driving this.”


As the crisis rages on, Florida lawmakers prepare for a property insurance special session.

Governor Ron DeSantis has called for a special session to begin on May 23, and the issue will be on the floor.

FL Governor Ron DeSantis calls for a special session of FL Congress to address the insurance crisis.

“Right now, we know the governor’s team, the House and Senate, are negotiating on a piece of legislation. It’s in early draft form, but they’ve been working on it for weeks, from what I’ve heard,” said State Senator Jeff Brandes, R-Pinellas County. “I think you’re going to see some building code changes. I think you’re going to see some CAT (catastrophic) fund reform, a significant reform in the property insurance space to allow basically people to price their policies to their pocketbook, which I think is incredibly important, offering more flexibility for both carriers and for consumers.”

How Can We Solve the FL Home Insurance Problem?

Proposed Solution: Roof Actual Cash Value

Tom Cotton says that the solution to the crisis is for roofs to be worth “actual cash value”.

“People are treating their homeowners policy as a warranty policy for a roof,” Cotton said.

“Right now, if you have damage to a roof and it’s five years old, you get a new roof. If your roof is 25 years old and gets damaged, you get a brand-new roof.”

Meanwhile, Cotton has some words of wisdom for individuals who are concerned about their insurance rates going up:

“When someone calls our office and says they got a renewal that went from $2,800 to $4,200, we say, ‘Stop right there. You got a renewal? Count yourself lucky, pay the bill,’” Cotton said. “If you can’t afford the increase, can you afford to replace your air conditioner or your roof? Because that’s what you’re going to have to do for me to get you a quote.”


Proposed Solution: Enforce Existing Florida Law

Legislators have passed several laws in recent years in Florida adding criminal penalties and huge fines for engaging in unlicensed claims or advertising.

This includes solicitation and marketing, because these often require specific licenses.

State investigators recently revealed that state attorneys are not always prosecuting fraudulent claims. This means that some people who commit fraud do not get punished.

This makes it less likely for investigators to pursue cases against bad actors, which in turn raises prices for all of us. We need to make sure that we give investigators the time and resources they need to go after the people who are breaking the law.

Key Takeaways:

The Florida property insurance crisis is a result of many factors, home insurance fraud being one of the main contributors.

Florida lawmakers are preparing for a special session to find a solution.

Home insurance fraud needs to be addressed in order to provide relief for Florida homeowners.