Eli5: Why are insurance companies leaving entire states like California and Florida?
In: Economics
In Florida specifically, it’s really an issue with the ways the laws are written, leading to more lawsuits filed against insurance issuers than any other state.
For example, if you issue homeowners insurance in the state of Florida, the homeowners insurance policy issuer can be sued by any third party, at any time. This is a big reason there are so many roofing scams in the state. Roofing company sees minimal damage, completes the work, and sues the homeowners insurance policy issuer on behalf of the insured. The insurer can either pay the claim, or spend nearly as much fighting it in court.
This is just the tip of the iceberg, but in Florida specifically, the laws are written in such a way that insurers are spending insane amounts of money in court, and in paying out claims that just aren’t worth fighting.
Latest Answers