I live in Florida and a ton of people are moving here. Even so, there are a ton of property insurance companies pulling out of the state. It makes no sense to me.
In: Economics
The Florida government passed a poorly thought out law attempting to protect homeowners from BS insurance denials, but went too far and created a situation where it’s almost impossible for insurers to deny claims, and to fight claims they have to pay for the other side’s lawyers, so even if they “win” the legal fees outweigh the cost of just paying out even if they know it’s BS.
Companies that do a lot of insurance work, eg roofing companies, worked this out and go around before hurricanes setting up jobs with people who have roof replacement coming up and then put in a fraudulent roof damage claim.
So the entire industry is now plagued by mass fraud, so much so it’s often not worth insuring Florida residents anymore so these companies are either dropping clients over the smallest pretense, or jacking up rates so high clients cancel.
There’s been some efforts in the last year or so to reign this in, but seems like it may not be enough.
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