A new report from Verisk predicts a “new reality” in future natural catastrophes, with unprecedented global losses to exceed $152 billion annually.  It’s being driven by “frequency perils” − frequent events, such as daily afternoon summer storms and hurricanes, that are driving high-impact losses.Former Florida Deputy Insurance Commissioner Lisa Miller sits down with a Verisk modeler and a Florida property insurance company meteorologist and risk analyst, to discuss how catastrophe modeling works, how insurance companies use it to set homeowners rates, and its importance in understanding and mitigating extreme weather risks now and in the future.Show Notes  (For full Show Notes, visit https://lisamillerassociates.com/episode-60-our-growing-catastrophe-risk/) The podcast discusses the increasing frequency and severity of storms and their impact on property insurance rates, particularly in Florida.  Dr. Julia Borman is Assistant Vice President of the Regulatory and Rating Client Services Team at Verisk.  It’s part of the data analytic firm’s Extreme Event Solutions division, which assists clients in working with regulators and rating agencies on a variety of projects, including data calls, utilizing catastrophe modeling in rating plans, and stress tests.  Natalie Ferrari is a Meteorologist and Catastrophic Risk Analyst for American Integrity Insurance Company, based in Tampa, Florida.  She provides data-driven insights into developing storms and their potential impacts by leveraging Verisk’s modeling.  Together, with host Miller, they explored the evolving landscape of catastrophic risk modeling in rate filings and regulatory processes, the intensifying impact of extreme weather, and the need for resilience and preparedness in the face of natural disasters that modeling can guide.Catastrophe Models: The Backbone of Modern InsuranceVerisk’s newest report, Modeling Insured Catastrophe Losses: A Global Perspective for 2025, projects expected future global losses to exceed $152 billion annually.  That’s up from the $132 billion annual average loss over the past five years.  Host Miller quoted Verisk Extreme Event Solutions President Rob Newbold’s remarks on the September 2025 report, that “the modeled losses reflect a fundamental shift in the risk landscape.  Natural catastrophe losses are no longer statistical anomalies.  They are the new normal.”  Borman said the report’s $152 billion figure is a particularly significant one, given that the actual global losses in 2024 were around $137 billion.  “Over half of it was what we call frequency peril loss.  You used to hear around the industry, folks were calling things like severe thunderstorms and wildfire ‘secondary perils.’  We don't call them that at Verisk anymore.  They are frequency perils based on the fact that they happen often, typically within a year and those can really aggregate up into a large proportion of an insurance company's overall loss for the year,” Borman said.The catastrophe models look at a variety of different perils, including hurricanes, earthquakes, flooding, wildfires, and winter storms.  “We were writing the report not just to understand the total amount of loss, but also the insurance gap that might exist around the world and where that was most prevalent,” she added.   (For full Show Notes, visit https://lisamillerassociates.com/episode-60-our-growing-catastrophe-risk/) 

An article in the Wall Street Journal suggests that Florida’s property insurance market is inherently flawed and financially shaky, under the review of a smaller ratings company.  It cites the 12 insurance company insolvencies between 2019 and 2023 in a market painted as over-reliant on reinsurance. Former Florida Deputy Insurance Commissioner Lisa Miller sits down with Demotech President & CEO Joe Petrelli and former Florida Insurance Commissioner Kevin McCarty to explain the unique nature of Florida’s market, how financial ratings of insurance companies are formulated, the critical role of reinsurance, the confusion between rate and premium, and the real reasons behind those insolvencies.Show Notes  (For full Show Notes, visit https://lisamillerassociates.com/episode-59-how-secure-is-floridas-property-insurance-market/) Host Miller discussed the evolution of Florida's property insurance market following 1992’s Hurricane Andrew, highlighting the departure of large insurers and the rise of smaller, regional companies that still make up most of today’s market.  Miller, an employee of the then Department of Insurance, said “large legacy insurance companies left our state altogether, saying the risk exposure was just too great.  Likewise, after 2017’s Hurricane Irma, other companies stopped writing new policies.”  Florida’s Unique MarketMiller noted that the state’s property insurance market has adapted over the ensuing 33 years to continue to provide needed insurance “for what's become one of the riskiest places on earth to insure.  It has unique challenges that have prompted innovative solutions.”  One of those solutions was Demotech, a Columbus, Ohio-based actuarial firm that provided ratings for Florida’s new regional companies when other ratings companies would not.  Demotech’s RoleDemotech President Joe Petrelli said its specialty in reviewing and assigning Financial Stability Ratings (FSRs) for independent regional carriers was born of the need of federal mortgage backers Fannie Mae and Freddie Mac in 1988, who together own or insure a substantial number of home mortgages nationwide.  They vetted Demotech’s ratings methodology and today, the firm provides FSRs for most of the 55 Florida based property insurance companies, including some of the recent 14 carriers who’ve entered the market since the Florida Legislature’s 2022-2023 litigation and consumer protection reforms.  Now in its 40th year, Demotech rates insurance companies across the nation that write billions of dollars of premiums.“We look at carriers independent of their size.  We look at them based on their business model, the execution of that business model, and the complementary nature of their reinsurance program,” said Petrelli.  “So I think that's what makes us unique.  I think when we look at catastrophe prone areas, whether it's wind, fire, tornado, hail, earthquake, what we're looking at is, does your reinsurance program give you the claims paying ability that you need?”  (For full Show Notes, visit https://lisamillerassociates.com/episode-59-how-secure-is-floridas-property-insurance-market/) 

Nine months after hurricanes Helene and Milton struck Florida, new insurance claims data is revealing the growing amount of damage not covered by insurance.  Of the more than half a million combined claims filed so far, 56% of Helene residential claims were closed without payment and about 43% of Milton residential claims.  A closer look shows the majority were uninsured or underinsured.Former Florida Deputy Insurance Commissioner Lisa Miller sat down with the heads of an insurance agency and a claims adjusting firm to find out why this is happening, how to determine proper coverage this hurricane season, and improvements in claims processes and technology. Show Notes  (For full Show Notes, visit https://lisamillerassociates.com/episode-58-the-17-reasons-your-florida-claim-wasnt-paid/)  When hurricanes Helene and Milton swept through Florida, they left more than just physical devastation in their wake − they exposed critical gaps in homeowners’ understanding of natural risk and insurance coverage, especially regarding flood protection.  In this podcast, host Lisa Miller talked with two industry veterans − Lee Wiglesworth, President of Wiglesworth-Rindom Insurance Agency in Stuart, Florida, and Fraser Hudson, CEO of Lozano Insurance Adjusters of St. Petersburg − to dissect the data, debunk common myths, and offer actionable advice for insurance agents and Florida policyholders facing the daunting world of insurance claims.  From claims to coverage, they discussed what every Florida property owner must know after hurricanes Helene and Milton.  The podcast also provides a deep dive into Florida’s insurance landscape.Reasons for Uninsured/Underinsured PropertiesHurricane Helene and Milton Florida insurance claims now total $7.3 billion with more than 90% of claims closed, according to the Florida of Insurance Regulation (OIR), in its June 10, 2025 claims update, the first since November 2024, just weeks after the storms’ landfalls.  More than a half a million claims (519,689) have been filed across all insurance lines.  On homeowners claims, the data shows that 56% of Helene residential claims have been closed without payment and about 43% of Milton residential claims.  The majority of those unpaid claims were flood damage not covered under a homeowners policy or the damage was below the policy deductible, per the table below.  (For full Show Notes, visit https://lisamillerassociates.com/episode-58-the-17-reasons-your-florida-claim-wasnt-paid/)  

A multi-bill effort led by attorney lawmakers in the Florida House of Representatives would roll-back many property insurance litigation reforms passed in the 2022-2023 legislative session.  Those reforms are reminiscent of the Workers’ Compensation insurance reforms passed in the early 2000’s that today has Florida boasting one of the lowest workers’ comp rates in the country. Former Florida Deputy Insurance Commissioner Lisa Miller talks with Jon Shebel, former President & CEO of Associated Industries of Florida who led the workers’ comp efforts.  Shebel draws direct comparisons between both reform efforts, argues that the proposed bills this session don’t help consumers, and urges the legislature to listen to the data, as it did with workers’ comp, that shows property insurance reforms are working to reduce homeowners insurance rates. Show Notes  (For full Show Notes, visit https://lisamillerassociates.com/episode-57-floridas-property-insurance-reforms-lessons-learned-from-workers-comp/) Jon Shebel recounts his role in Florida’s 2003-2005 workers' compensation reforms, which capped attorney fees and streamlined claims, reducing rates from the highest to among the lowest in the U.S.  Florida’s rates have dropped for the eighth consecutive year.“The biggest issue was litigation,” explained Shebel, on the reason for high workers’ comp insurance rates.  “Plaintiff attorneys had free rein to convince injured workers to sue their employers, often leading to drawn-out cases that weren’t necessarily in the workers’ best interest.  There were cases where legal fees ended up costing more than the actual medical treatment and benefits for the injured worker.”Shebel said that very same incentive to sue contributed to Florida having the highest property insurance rates in the country between 2017 and 2023.  By 2021, Florida had 8% of all homeowners’ claims in the U.S., yet 76% of all homeowners’ claims lawsuits, according to the Florida Office of Insurance Regulation.   Likewise, a 2021 report titled Florida’s P&C Insurance Market is Spiraling Toward Collapse revealed that “Of the $15 billion spent on litigated claims since 2015, only 8% was paid to policyholders.  Plaintiff attorneys got 71% with the remaining 21% spent by insurance companies on defense attorneys.” Shebel said Florida’s property insurance reforms took a lesson from its workers’ compensation insurance reforms 20 years earlier.“Our strategy in workers’ comp was to address the root cause, plaintiff attorney involvement.  The main provisions included capping attorney fees, streamlining the claims process, and implementing stricter guidelines to prevent unnecessary lawsuits.  This not only reduced legal costs but also ensured that injured workers got the benefits they needed faster, without the delays that litigation often caused,” Shebel said.  All....  (For full Show Notes, visit https://lisamillerassociates.com/episode-57-floridas-property-insurance-reforms-lessons-learned-from-workers-comp/) 

A sensational newspaper article alleging bad deeds by Florida insurance companies is prompting the Florida House of Representatives to look into the relationship between companies and their Managing General Agents (MGAs) and affiliated companies.  The Tampa Bay Times reported the companies diverted billions of dollars to affiliates while claiming to lose money from hurricanes, based on the newspaper’s reading of a regulator’s draft report.Former Florida Deputy Insurance Commissioner Lisa Miller reveals the inadequacies of the article and its misleading and incomplete portrayal of the market and regulation.  She’s joined by a veteran Florida insurance agent who explains how MGAs and affiliates function, the financial dynamics of the insurance market, and the consumer safeguards built into the system. Show Notes  (For full Show Notes, visit https://lisamillerassociates.com/episode-56-florida-property-insurance-facts-vs-fear/ ) Allen McGinniss is a licensed Florida insurance agent and the principal of the McGinniss Himmel Insurance Agency, based in Tallahassee, Florida.  He began his insurance career 20 years ago as a State Farm agent before transitioning to an independent agent and co-founding his agency in 2015.  He explained what Managing General Agents (MGAs) are and the crucial role in the insurance industry by performing essential administrative tasks for insurance companies.  These tasks include:Underwriting: Assessing and evaluating risks to determine appropriate coverage and premiums.Claims Management: Handling the process of claims from filing to settlement.Policy Issuance: Managing the issuance and renewal of insurance policies.Why Are MGAs Important?MGAs help streamline operations by providing specialized knowledge and services that insurance companies may not handle internally.  McGinniss said they can either operate within an insurance company or function independently.  This flexibility allows insurance companies to:Respond Quickly to Market Changes: MGAs enable companies to adapt to evolving market conditions efficiently.Manage Claims Effectively: By leveraging the expertise of MGAs, insurance companies can ensure that claims are processed promptly and fairly.The Tampa Bay Times ArticleThe Tampa Bay Times published an article on February 22, 2025 titled Florida insurance companies steered money to investors while claiming losses, study says.  Its reporting was based on a draft of a 2022 consultant’s study for the Florida Office of Insurance Regulation (OIR) for the time period of 2017-2019.  According to the article, “While Florida insurers claimed to be losing money in the wake of hurricanes Irma and Michael, their parent companies and affiliates were making billions of dollars.”  It reported that the previously unreleased study’s summary “reveals that as the industry was ailing and companies were losing money, executives distributed $680 million in dividends to shareholders while diverting billions more to affiliate companies,” which included MGAs.  McGinniss argued that the...  (For full Show Notes, visit https://lisamillerassociates.com/episode-56-florida-property-insurance-facts-vs-fear/ ) 

One of the elements credited in the evolving success of Florida’s recent property insurance reforms is data collection and reporting.  Property insurance companies are required to provide regulators with specific data on litigated claims.  The number of lawsuits decreased significantly in 2024 as a result and with it, upward pressure on homeowners insurance rates. Now there’s a push to implement a litigation data standard nationwide.  Former Florida Deputy Insurance Commissioner Lisa Miller sits down with CaseGlide CEO Wesley Todd who is behind the move, citing increasing nuclear verdicts and new challenges in other lines impacting insurance availability and affordability. Show Notes The podcast delves into the transformative changes in Florida's homeowners insurance litigation landscape, driven by legislative reforms and the critical role of data transparency.  Wesley Todd said he formed Tampa-based CaseGlide in 2013 to bring greater transparency to insurance litigation through data analytics and “level the scales of justice.  But what was missing was the ability to see what was happening, the ability to do something about it.”  More than ten years later, he is continuing to emphasize the importance of data transparency in understanding litigation trends and improving the insurance industry's efficiency.Todd told host Miller that the insurance industry today faces “an inflection point.”  Nuclear verdicts, social inflation, and judicial activism have driven unprecedented litigation costs, destabilizing insurance companies’ ability to fulfill their fiduciary obligations.  Meanwhile, plaintiff attorneys have transformed their practices with analytics, funding, and transparency, positioning themselves to maximize litigation outcomes “at the expense of insurers,” he said."I'm really sort of just giving the industry a heads-up that this is where we're headed if we're lucky, right?  I mean otherwise it could be too late.  It could be that insurance becomes unaffordable and unavailable in major lines like casualty, professional liability, just like we see in commercial auto, just like we saw temporarily in Florida," Todd said.Todd discussed his recent policy paper that advocates for a data-driven approach to decision-making and highlights the need for standardized litigation data to support industry reforms and better serve consumers.  He is urging insurance companies across the U.S. to implement a “Litigation Data Standard.”  He describes it as a governance framework for collecting, auditing, and analyzing litigation data.  This “institutional reform” would help realign insurance companies with their duties of compliance, reasonableness, and transparency, enabling them to meet regulatory expectations, counter judicial activism, and deliver legal services of comparable quality to their opponents in the plaintiff bar.Todd’s concept is based on Florida’s litigation challenges.  In 2021, Florida accounted for 7% of the nation’s homeowners insurance claims, yet 76% of the nation’s homeowners insurance lawsuits.  The legislature passed a series of successive reforms from 2019 through 2023, including the elimination of one-way attorney fees for plaintiff attorneys to help fix the problem.  (For full Show Notes, visit https://lisamillerassociates.com/litigation-data-standard/) 

Amid accusations that Florida’s property insurance companies, including state-backed Citizens Insurance, are deliberately paying only half their claims and “in a state of collapse,” comes new insight and fresh data that debunk the charges.  The man behind the allegations is Martin Weiss of Weiss Ratings, who’s now the subject of an investigation by state insurance regulators.Former Florida Deputy Insurance Commissioner Lisa Miller shares the new push-back from Citizens’ President & CEO on these accusations and sits down with the head of a large private insurance company who shares new data showing why these charges are inaccurate and unfair in what is a tightly-regulated marketplace. Show Notes (For full Show Notes, visit https://lisamillerassociates.com/episode-54-the-truth-behind-the-50-claims-denial/  ) The news stories emerged mere weeks after two devastating hurricanes – Helene and Milton – struck Florida, creating $5.3 billion in estimated insured losses in Florida as of late November 2024.  Host Miller dives deep into the controversies and complexities surrounding the state-created Citizens Property Insurance Corporation and the broader Florida property insurance market on its claims handling and claims payment rates.  "The innuendo that's going around in the media space is that there is a suspicion that Citizens is trying to cheat its customers, and now forces are trying to extend that innuendo to Florida's private property insurance market companies,” said Miller.  “In my opinion, that's just plain dishonest and unfair."The program features soundbites from Weiss, Citizens Property Insurance President & CEO Tim Cerio, and a studio interview with Locke Burt, CEO and Chairman of Security First Insurance Company.  Burt served in the Florida Senate for 12 years, where he helped write the laws that created Citizens and the Florida Hurricane Catastrophe Fund.Weiss, in various November media reports, said that he’d reviewed Citizens Property Insurance 2023 annual financial statement and concluded that Citizens didn’t pay 50.4% of its 2023 claims.  He said that was worse than any private insurance company’s no-pay rate.  Weiss declined an invitation to appear on the podcast.Burt and Cerio defended Citizens and the broader Florida insurance market against Weiss’ accusations, noting there are legitimate reasons claims are closed without payment.  It's not always about denial.  The reasons include: Claims that fall below the policyholder's deductible.Duplicate claims.Claims related to flood damage, which are not covered by standard homeowners' policies.Weiss, in his criticism of Citizens, was quoted in the media as saying “One factor that we believe is probably playing a role is a deliberate strategy to reduce their liabilities for whatever reason.”Cerio shot back at the December 4, 2024 Citizens Board of Governors meeting.  “It's critical to just point out that, we are the state created, not for profit, insurer of last resort.  We have no financial incentive to not play claims.  Zero,” he said.(For full Show Notes, visit https://lisamillerassociates.com/episode-54-the-truth-behind-the-50-claims-denial/ )Image credit:  danielfela/Shutterstock

Why were some homes in Hurricanes Helene and Milton heavily damaged while others sustained little or no damage?  Much of the answer lies with the building materials and techniques used in their construction. Former Florida Deputy Insurance Commissioner Lisa Miller talks with a building science researcher, a building products manufacturer, and a developer whose homes survived unscathed from the hurricanes about how resilient construction can save money and insurance costs for both new and existing homes. Show Notes (For full Show Notes, visit https://lisamillerassociates.com/episode-53-fortified-homes/)  Host Lisa Miller opened the discussion by highlighting the devastation caused by recent Hurricanes Helene and Milton, particularly in Florida.  She emphasized the urgent need for homeowners to prepare their properties to withstand such disasters.  “Everywhere I go in Florida, I see homes built with plywood and two-by-fours, and I affectionately say that these production homes are built with sticks.  I don’t see how they withstand 150 mph winds,” said Miller, who is a disaster insurance and recovery expert.  The focus of the episode is on using innovative building products and techniques to enhance the resilience of homes.Fred Malik, Managing Director of the Fortified Program at the Insurance Institute for Business and Home Safety (IBHS), shared his expertise on building techniques and materials designed to minimize damage from natural disasters.  He stressed the importance of rigorous building standards and inspections, noting that "you get what you inspect, not what you expect."  Malik explained that homes built to the Fortified standard undergo thorough third-party inspections, ensuring that critical details are not overlooked.  This certification process provides consumers with a way to differentiate between homes that may appear similar but have vastly different levels of resilience against severe weather.Marshall Gobuty, Managing Director at Pearl Homes Developments, shares his firsthand experience with building resilient homes. He discusses his development, Hunter's Point in Cortez, Florida, which successfully withstood Hurricane Milton without any damage.  Gobuty attributes this success to his innovative building practices, which include using a combination of block and poured concrete for foundations, as well as advanced insulation techniques that enhance the structural integrity of the homes.Scott Lidberg, CEO of NEXGEN Building Products, introduced his company's innovative magnesium oxide-based building materials.  He explained how these products can replace traditional materials like plywood and gypsum, offering superior resistance to impact, moisture, and fire.(For full Show Notes, visit https://lisamillerassociates.com/episode-53-fortified-homes/) 

What’s going on with property insurance in Florida?  Specifically rates, coverage, condominiums, automobile insurance, telematics, flood insurance, and the reinsurance costs that carriers pass along to consumers.  Former Florida Deputy Insurance Commissioner Lisa Miller gets to the heart of the issues with three experienced insurance agents in South, Central, and North Florida who share their insights and suggestions on improving Florida’s challenging property insurance market. Show Notes Host Lisa Miller and guests discussed the high premiums affecting homeowners and auto insurance, driven by catastrophic weather, inflation, litigation, and reinsurance costs.  Positive trends such as rate decreases and more flexible coverage options are highlighted.  The conversation also covered the critical need for flood insurance and the role of the news media in educating the public about insurance complexities and how agents can help the media do so.  The episode underscores the importance of transparency and proactive communication in the industry.Miller’s guests each brought unique perspectives from different regions of Florida:Jay Wolfberg, President of We Insure, headquartered in Sunrise.  Wolfberg has over a decade of experience in commercial and residential property insurance.  He discusses positive trends in the market, including rate decreases and more creative coverage options.Anna Regina Myrrha, Agency Principal and Broker at American Insurance Pointe (AIP) in Orlando.  Myrrha shares insights on the stabilization of rates and the importance of adapting coverage to meet clients' needs.Paul Lalonde, President of Insurance Wagon, a Jacksonville insurance agency.  Lalonde provides a perspective on the homeowners as well as the commercial insurance market and the challenges posed by recent legislation affecting condominium insurance.Overview of the Florida Insurance MarketHost Miller highlighted the current state of the Florida insurance market, where premiums for automobile, homeowners, and commercial insurance are at an all-time high.  She identified four main factors driving these rates:Catastrophic Weather: Florida's susceptibility to hurricanes and other severe weather events significantly impacts insurance costs.Inflation: Rising costs of goods and services contribute to higher insurance premiums.Litigation: Legal fees and settlements from lawsuits lead to increased insurance costs.Reinsurance Costs: The cost of reinsurance, which insurers purchase to protect themselves from large claims, is a significant factor in premium pricing, comprising upward of 40% of a homeowners insurance premium.Host Miller emphasized the uncertainty surrounding reinsurance costs, especially with the ongoing hurricane season, and the potential for higher rates if a significant hurricane occurs.Positive Trends in Homeowners InsuranceRate Decreases and StabilizationHost Miller highlighted a recent report from the Florida Office of Insurance Regulation that 12 companies have requested rate decreases, while 25 have sought to maintain their current rates. For example, American Integrity Insurance Company has announced a nearly 7% rate decrease for a significant number of policyholders...  (For full Show Notes, visit https://lisamillerassociates.com/episode-52-agent-roundtable/) 

High-risk flood zones are expanding this year along significant stretches of Florida’s coastline.  In Broward County, nearly 90,000 properties have been moved into a FEMA flood zone.  But 80,000 of them were in such a zone prior to ten years ago, when FEMA moved them out – only to add them back in this year.  Many will now have to purchase flood insurance.Former Florida Deputy Insurance Commissioner Lisa Miller talks with the county floodplain manager for an explanation, the reporter who broke the story, and another reporter from Palm Beach County, which is fighting FEMA’s efforts to expand flood zones. Show Notes FEMA calls these high-risk flood zones Special Flood Hazard Areas (SFHA).  They are designated on a FEMA Flood Insurance Rate Map as zones that begin with the letter “A” or the letter “V” for those living along the coast, subject to additional threat of storm surge.  Properties in these zones supposedly have a 1% probability of flooding each year, or about a one-in-four chance every 25-30 years.  Some refer to this as the 1-in-100-year flood probability.FEMA’s 2024 updated maps have moved nearly 90,000 (88,913) properties in Broward County, Florida into a high-risk flood zone.  But almost 80,000 (79,689) were in that zone prior to FEMA’s 2014 map update, then removed, and now 10 years later are back in a flood zone.  “How did this happen and what’s the science behind it?” asked host Miller.Carlos Adorisio, Floodplain Manager for the unincorporated area of Broward County, explained that FEMA flood maps are based on studies of two factors: rainfall and coastal storm surge.  Maps from the 1980’s and 1990’s reflected most of the county was high-risk.  “In 2014, FEMA updated the maps, but they only updated the portion for the rainfall risk and not for the storm surge.  There was a lot of development and better modeling and a lot of areas were removed from the 100-year floodplain,” he explained.   In its 2024 maps, FEMA updated only the coastal storm surge risk.  “There’s been more development, updated storm data, and better computer modeling techniques and mapping,” since the last storm surge studies done in the 1980’s, said Adorisio, who is a Professional Engineer and a Certified Floodplain Manager.  “One of the components of storm surge is the sea level, which is higher than they accounted for in the 80’s and therefore the storm surge is higher in this study,” Adorisio explained.  “Now the southern part of the county is lower than the middle and northern sections of the county...and it's to the point where FEMA believes that the higher storm surge elevation not only goes to I-95, it goes all the way to U.S. 27, which is close to the Everglades levee.  That’s why you have those almost 90,000 parcels that are increasing in flood risk and now in the Special Flood Hazard Area,” said Adorisio, who earlier in his career worked for FEMA as a technical consultant for flood maps. Ron Hurtibise, business reporter for the South Florida Sun Sentinel, first reported the scope of the 2024 flood map changes.  The new high-risk flood zones are primarily located along... (For full Show Notes, visit https://lisamillerassociates.com/episode-51-floridas-expanding-flood-zones/)  

A new working paper from the Congressional Budget Office estimates that for every dollar spent to elevate or buy-out a flooded home, $2.69 would be saved in future costs over the next 30 years.  Of the 1.3 million projects the paper identifies, roughly 138,000 would see a greater savings of $6 dollars.  Total savings would amount to $519 billion in future damage if governments and homeowners together would spend $193 billion today.Former Florida Deputy Insurance Commissioner Lisa Miller sat down with one of the paper’s co-authors and the head of a national home floodproofing solutions company to discuss the government’s current efforts – and what’s lacking – to avoid costly future flood damage across the nation.Show Notes The Congressional Budget Office (CBO) is the research arm of the U.S. Congress, tasked with providing nonpartisan analysis for lawmakers to consider when making policy.  Its May 2024 working paper, Flood Damage Avoided by Potential Spending on Property-Level Adaptations found: There are opportunities for adaptation for approximately 1.3 million projects nationwide (each adapting a single property of one to four units) where the expected avoided damage exceeds project costs primarily from elevating the home above flood stage or a buyout of the property for later destruction.The total cost of completing these projects would be $193 billion, preventing $519 billion of expected damage over 30 years.On average, each dollar spent on these projects would avoid $2.69 of expected damage.About 138,000 projects would result in expected avoided damage over six times the cost of the project.Outcomes vary based on area income and geography.“We started looking into federal spending on adaptation to flood risk and we found that there's a big literature out there, but it can be really difficult to compare across studies, and apply one context to another,” explained paper co-author Evan Herrnstadt.  “So we would need a scalable and flexible approach and found it was feasible for us to use the National Structure Inventory from the U.S. Army Corps of Engineers and flood modeling from the First Street Foundation and combine that with some other work to estimate avoided damage from property level interventions like buyouts and elevations,” said Herrnstadt, who is a CBO economist.  The national framework that CBO developed used inland and coastal residential properties that contain 1 to 4 housing units.While the CBO doesn’t make policy recommendations to Congress, Herrnstadt said in this report, it does characterize sets of projects and different allocation schemes to provides potential opportunities to avoid flood damage paid principally by federal, state, and local governments, together with homeowners.  The paper notes that FEMA has multiple programs that fund property-level adaptation.  From fiscal years 2008 to 2019, annual obligations for those programs totaled about $280 million, representing an average of 29% of the amount FEMA has obligated for hazard mitigation.“Evan this is fantastic work,” said Tom Little, President & CEO of Floodproofing.com, an integrated company providing property risk analysis, wet and dry floodproofing solutions, and flood insurance.  “This is the type of information that we need to get out there to continue to build awareness that we can actually invest money and get a strong return on that investment, by retrofitting the existing infrastructure that we have... (For full Show Notes, visit https://lisamillerassociates.com/episode-50-dollar-sale-on-flood-damage/) 

A new report claims that Florida's property insurance market is full of “low quality insurers,” especially those Florida-based companies that write the bulk of the 7.5 million homeowners and condo insurance policies.  It casts aspersions on Demotech, the rating agency that reviews their financial stability.Former Florida Deputy Insurance Commissioner Lisa Miller sat down with Demotech President Joe Petrelli to get the other side of the story that the report didn't.  She also learned that it wasn't low capital and surplus that led to seven company insolvencies, as the report claims, but instead targeted technology-enabled claim instigation.Show Notes  (For full Show Notes, visit https://lisamillerassociates.com/episode-49-when-insurers-exit/) The report, When Insurers Exit: Climate Losses, Fragile Insurers, and Mortgage Markets was written by researchers at Columbia University, Harvard University, and the Federal Reserve Board and published online prior to being peer reviewed.  The report’s abstract describes it as a study of how homeowners insurance markets respond to growing climate losses and how this impacts the home mortgage markets.  “Using Florida as a case study, we show that traditional insurers are exiting high risk areas, and new lower quality insurers are entering and filling the gap.  These new insurers service the riskiest areas, are less diversified, hold less capital, and 20 percent of them become insolvent.  We trace their growth to a lax insurance regulatory environment.  Yet, despite their low quality, these insurers secure high financial stability ratings, not from traditional rating agencies, but from emerging rating agencies.”  The report specifically targets rating agency Demotech, which provides Financial Stability Ratings (FSR) for most of the 50 or so Florida-based property insurance companies, including six of the recent eight carriers to enter the market.  The report claims Demotech’s ratings “are high enough to meet the minimum rating requirements” of Fannie Mae and Freddie Mac, which back many home mortgages, but that most of those insurance companies wouldn’t meet government requirements if rated by AM Best, suggesting the companies are financially weak.“I think the thing to keep in mind is the report is based on what are called counterfactual AM Best ratings of Demotech-rated companies,” said Joe Petrelli, President of Demotech, who described counterfactual methods as those based on “what-if” scenarios.  “So I think that, in and of itself, should have alerted people that this was not based on anything real or actual.  It was based on counterfactual information.  It's like rewinding the world, changing a few crucial details, and then hitting play to see what happens.  It's essentially a simulation,” said Petrelli.Petrelli is an actuary and a 55-year veteran of the insurance industry.  He and wife Sharon co-founded Demotech in 1985 and today the agency reviews and rates 460 insurance companies across America.  It is registered with the U.S. Securities and Exchange Commission as a nationally-recognized statistical rating organization for insurance companies.  Florida regulators approached Demotech in 1995 to become the very first ratings company to review and rate independent, regional and specialty companies that filled the gap left by....  (For full Show Notes, visit https://lisamillerassociates.com/episode-49-when-insurers-exit/)

How will the insurance bills that passed in the recently completed 2024 Florida legislative session compliment past marketplace reforms?   Is a property insurance market marred by carrier insolvencies in recent years and ongoing double-digit rate increases starting to stabilize? Former Florida Deputy Insurance Commissioner Lisa Miller talks with two legislators about the new laws expected to impact Florida’s property insurance and real estate markets, reinsurance prices, condominium affordability, and their joint belief in bipartisanship for finding workable policy solutions. Show Notes Florida State Representative Tom Fabricio (R-Miami Lakes) sits on the House Insurance & Banking Subcommittee and Chairs the House Ethics, Elections & Open Government Subcommittee.  He is a former insurance defense attorney whose practice now focuses on commercial and real estate litigation, including real estate transactions.  Florida State Senator Nick DiCeglie (R-St. Petersburg) is Vice Chair of the Senate Banking and Insurance Committee, Chair of the Senate Transportation Committee, and a former Chair of the House Insurance & Banking Subcommittee.  He is President and CEO of Hope Villages of America, a Tampa Bay area nonprofit organization addressing hunger, homelessness, and domestic violence.Both lawmakers discussed their motivation for entering the Florida Legislature and their vision for Florida’s homeowners insurance marketplace and by extension, the state economy.  Topics included the admitted insurance market (those companies whose rates and policy forms are approved by state regulators) and the surplus lines companies (those whose rates and forms are largely unregulated, and who often insure risks admitted companies don’t), along with reinsurance companies, who provide catastrophe insurance for insurance companies.  Among the bills and issues discussed on the podcast with host Lisa Miller: HB 1503 authorizes surplus lines insurance companies to take out policies (“takeouts”) from the legislatively-created and state-backed Citizens Property Insurance Corporation’s non-homesteaded residential properties, such as second homes, among other risks.  “I think surplus lines are important (for) it allows other free market competition,” said Rep. Fabricio.  “Because ultimately, with Citizens having a population of over 1.2 million to close to 1.3 million policies, we need to depopulate Citizens.  We need to bring Citizens down to a number under a million policies, where Citizens will be truly our carrier of last resort,” he said.HB 1029 applies the popular My Safe Florida Home homeowners program to condominium complexes and individual condo unit owners in an initial pilot program.  The program offers a $2 to $1 match to incentivize homeowners to harden their homes from future hurricanes.  “Anytime that we can mitigate losses in the state, it’s going to go a long way in contributing to that healthy insurance market,” said Sen. DiCeglie, who sponsored the Senate companion bill.  “In my district alone, we have thousands of condominium associations and those folks are looking for relief as well.  Recent condominium reforms requiring them to put more money in reserves, so that they're making the necessary repairs and upkeep of the condominiums (together with)....(For full Show Notes, visit https://lisamillerassociates.com/episode-48-2024-legislative-roundup/ ) 

Ray Shelton, Ph.D. is a nationally-known expert on stress and the impacts it has on frontline personnel in disasters and other crises.  He is a Fellow and the Director of Professional Development for The American Academy of Experts in Traumatic Stress, in Miller Place, New York.  He’s seen tragedy first-hand over 35 years serving with the Nassau County, New York Police department, including the Twin Towers Collapse during 9/11.  He’s also a former firefighter and paramedic.“The adjusters are no different than fire, police, and EMS, they're front line.  They're action-oriented.  They take risks.  They have tremendous attention to detail.  They have a powerful need for control, to help people get their lives back in order,” said Shelton.  “But the price that is paid for that, is all of the memories, all of the conversations, all of the sites that they see stays with them.  There's absolutely no delete button in the human brain.”Shelton worked with the Liberty Mutual Insurance Catastrophe Response Team during the California Wildfires in 2008 and subsequent tornado outbreaks across the country.  That’s where he met Jenny Pye, M.S., whose 35 years with Liberty Mutual included serving as a Property Claims Manager and Director of Quality Improvement for Auto Physical Damage (APD), Property, and Shared Services.“Every time I hear Ray talk, it takes me back to early in my career when I was an adjuster in the field and would go out and have multiple fatality 18-Wheeler accidents, and just the emotions of being on scene and investigating a claim,” said Pye.  “Sometimes the bodies were still there and then talking to their families, just all those emotions.”Today, Pye is the Director of Commercial Claims at Pilot Catastrophe Services, based in Mobile, Alabama.   She helps adjusters and the firms they serve to not only proficiently manage the technical part of the job, but manage the emotional toll that claims can have.  She said adjusters who strive for great customer experience, often ignore or cover-up signs of traumatic stress.  “But sometimes you get feedback as a manager and hopefully before you get that feedback from your customer, you're recognizing these issues,” said Pye.  “Maybe the adjuster is not as responsive as they normally are.  It's not just answering a text or phone call, if you're calling about a claim, it can be on a Zoom call and you will see where these folks that are normally engaged are not engaged.”  That, she adds, requires claim managers to “finely tune your senses to be aware of what’s going on.”Shelton, who presents “Fine Tuned Adjuster” webinars for the Property Loss & Research Bureau said there are consequences of not recognizing the signs in adjusters or of claims management not responding to the signs.“If you do nothing, it stops productivity and the bigger danger (is) maybe that you lose that person who has bottled this all up from multiple times that this has occurred and finally says, ‘You know, I've had enough’ and they leave the industry,” Shelton said, noting the current market challenge of recruiting adjusters to replace those that leave the profession.(For full Show Notes, visit https://lisamillerassociates.com/episode-47-stress-strain-of-adjusting/) 

Advances in artificial intelligence (AI) and machine learning are getting closer to providing insurance companies with a new underwriting tool to combat fraud: the ability to review meeting minutes and other public documents from homeowners and condominium associations, whose communities are home to nearly half of Florida’s 22.3 million residents.Several Florida associations have been accused of recent wrongdoing, including one where four former board members were arrested, accused of engaging in a multi-million dollar embezzlement of monthly dues from residents.  Former Florida Deputy Insurance Commissioner Lisa Miller sat down with an insurance lawyer and an insurance services company executive who uses AI, to find out how often this fraud happens, how it increases property insurance rates, and exactly how the new technology to fight it will work.Show Notes The South Florida Sun Sentinel did a recent exposé of a West Miami development called The Hammocks, a 6,500-unit community of houses, townhouses, and condominiums.  Four former association board members were arrested for allegedly engaging in an intricate scheme to embezzle millions of dollars in monthly dues from residents.  Authorities say $2.4 million in checks were written to five companies that did little or no work for the homeowners association (HOA) – two of them owned by the husband of the former board president.  Andy McGuire, Chief Strategy Officer and Co-Founder of PEAK6 InsurTech, said such fraudulent practices contribute to inflationary pricing and higher insurance rates.   He said advances in technology, especially artificial intelligence (AI) and the machine learning process, are providing better insights into risk.  His company’s subsidiary, Focus Technologies, is doing this today to serve its customers better. “With enough observations, you can run a model, for example, on the language used in the meeting minutes to potentially pick up on schemes,” said McGuire.  “Now that we have this example, for this particular issue, we can build an AI and teach it with these talk paths or words and knowing that it resulted in fraud, you have your first learning.  You can get enough positive observations that you now have a model that an underwriter can load the minutes into and get a prediction.  Combine that with financial data and a propensity to commit fraud of each individual member of the board, and you have a fully automated decision tree.  I don't think we're totally there yet, but we're really close.  This is the future,” said McGuire, whose 25 years in the industry include risk management and reinsurance.Tiffany Rothenberg is a Partner at the Kelley Kronenberg law firm’s West Palm Beach office in the heart of Florida’s condominium country.  She represents commercial property insurance companies in complex coverage disputes and is an expert in the HOA and condominium association insurance claims arena.  “I can't tell you how frequently we end up seeing this kind of a scenario,” Rothenberg told host Lisa Miller.  “I just had a case here in Palm Beach County, where the association submitted a $4.5 million dollar Hurricane Irma claim for roof damage.  When we started to review their condo records, we discovered that the association actually had five roof replacement proposals that were all under $1 million.  And then during depositions, it came out they actually signed a contract with one of those roofing contractors for around... (For full Show Notes, visit https://lisamillerassociates.com/episode-46-insurers-know-the-building-and-the-board/)  

Media coverage has intensified over an allegation by three independent insurance adjusters that Florida property insurance companies are cheating their policyholders out of rightful claim payouts.  The three accuse the industry of altering their field adjuster reports and reducing claim payouts – all without their knowledge or approval. Former Florida Deputy Insurance Commissioner Lisa Miller sat down with two independent field adjusters and an attorney who represents insurance companies to learn their perspective and just how damage claims – and their payouts – are ultimately decided and by whom.    Show Notes The three adjusters and their allegations first appeared in public last December to testify during the Florida Legislature’s special session which resulted in a series of new consumer insurance reforms.  The reforms included the end of one-way attorney fees for property insurance lawsuits, the end of Assignment of Benefit contracts, and a further tightening of claim practices, among other things.  These were all abusive practices by bad actors against insurance companies and policyholders that were blamed for driving up the cost of insurance and creating market turmoil. (For full Show Notes, visit https://lisamillerassociates.com/13875-2/)   Shawn Kelliher of Cape Coral is a 16-year veteran in the insurance adjusting business.  His first 13 years were working for Farmers Insurance Company as a desk adjuster and then as a catastrophe field adjuster, including large loss and complex claims across the country.  He said “it’s absolutely not the case” that insurance companies are out to get everybody and explained that there are many legitimate reasons why field damage estimate reports change.   Field adjusters often don’t know what damage is covered by the insurance policy.  “Some policies have actual cash value only coverage, some policies have specific exclusions for certain items and a lot of times we don't know that,” Kelliher said.  “So we see and document the damage and that goes in our report and that’s sent up (to the independent adjusting firm or insurance company), only to be later found out that, unfortunately, in those circumstances where they (the policyholders) don't have coverage, those items have to be removed or taken out of the estimate.  And it's not a malicious situation,” the Naples, Florida native said.  Kelliher said he’s seen it many times over the past three years that he’s been an independent adjuster in Florida.  He said he works for a variety of adjusting firms and across a vast array of insurance carriers, doing both residential and commercial work.  Vanessa McGonigal, an independent field adjuster from Cooper City agrees.  Often times, she said she is not aware of any changes that may take place in the final adjusting report on a claim.  “If we're preparing an estimate for all of the damages we see and we submit that and coverage is not afforded for something written on our estimate, where is it that we should give permission to have that removed?  If it's not covered, it's not covered,” McGonigal said.  She began her career in 2009 as an estimator for a general contractor and then five years ago, became an independent field adjuster.  She said she has worked for a couple of independent insurance adjusting firms, doing both residential and commercial claims, including from Hurricane Ian.Both McGonigal and Kelliher said that if there is a change to the estimate, sometimes they make it, sometimes their adjustment firm does it, or the desk adjuster at the insurance company, depending on the change and the situation. “They'll call me and say, ‘Hey, you know, I read your report, I saw your photos, this is what I was thinking.  Can you kind of explain your thought process here or justify what it is that you put in your estimate?’ and we’ll have a conversation ab(continued)

An interim report submitted to the Florida Building Commission says that Southwest Florida coastal communities impacted by last September’s Hurricane Ian were “ill-prepared” for the storm surge and flooding, despite lessons on wind mitigation learned from Hurricane Charley 18 years earlier.  Ian was the costliest storm in Florida history, killing 156 people and causing an estimated $109.5 billion in damage in Florida.  Only an estimated half of that will be covered by insurance.Former Florida Deputy Insurance Commissioner Lisa Miller sat down with the report’s co-author and another extreme events scientist who produced early catastrophic models on Ian for insurance companies.  They discussed how this new research shows some of the same patterns of destruction seen in prior storms, that Florida hurricanes are not getting stronger or more frequent, how elderly and poor residents are disproportionately hurt, potential changes to the state building code, and why a new approach to mitigation is needed.    Show Notes New lessons are emerging from Hurricane Ian, the high-end Category 4 hurricane that made landfall near Fort Myers Beach on September 28, 2022.  An interim report by a team of scientists supported by the Florida Building Commission showed Ian’s tropical storm-force wind field was 2.3 times the diameter of 2004’s Hurricane Charley.  The greater resulting storm surge of 13 feet impacted high population areas living in both elevated and on-grade homes along hundreds of miles of canals and coastal frontage.  (For full Show Notes, visit https://lisamillerassociates.com/episode-44-dynamic-duo-ian-hit-hard/) Findings: The report evaluates specific building code-related impacts to structural performance, including breakaway walls relative to code provisions, placement of the coastal construction control line, evidence for surge-induced floor slab uplift forces, and performance of common roof cover and wall cladding elements. Dr. David O. Prevatt, one of the report’s co-authors, is a Professor of Civil & Coastal Engineering at the University of Florida’s Herbert Wertheim College of Engineering.  He is part of the Structural Extreme Events Reconnaissance (StEER) Network of researchers and product engineers that conducts surveys to assess building performance after each hurricane.  Its evaluation was used in the interim report and captured Hurricane Ian’s damage patterns and storm surge.  Dr. Prevatt said Ian was not a design level wind-event, meaning its wind speed on land of about 120 mph was below the building code standards of 154-160 mph for Lee County, where it made landfall on September 28, 2022.“The severe damage we saw was really the flooding, in particular the manufactured homes on Fort Myers Beach and mostly older slab-on-grade homes,” said Dr. Prevatt.  “The good news, if there is any that we can draw from this, is that recent construction built to the recent Florida Building Code standards performed well, even in areas where they were impacted by the 13-foot high storm surge.”Yet, Ian destroyed or severely damaged about 20,000 homes in a wide path from Lee County on the Gulf Coast and inland across central Florida to Daytona Beach on Florida’s Atlantic Coast.    Dr. Prevatt said he saw the same patterns of damage in Ian that he saw in the previous six years from Hurricanes Matthew, Irma, and Michael.  “It’s one of the saddest parts for me.  If we don't harden our communities or retreat and move them away from these intense events, we will repeat what we've seen here five, 10, 20 years down the road,” said Dr. Prevatt.    Dr. Karthik Ramanathan is Vice President of Research at Verisk, the worldwide data analytics and risk assessment firm.  He led the catastrophe modeling team that estimated Hurricane Ian’s initial insurance and reinsurance losses at between $42 billion to $57 billion, no(continued)

The December 2022 property insurance market reforms passed by the Florida Legislature are making a big difference already, with fewer and less severe non-hurricane claims and fewer daily lawsuits, according to a major Florida insurance company. Former Florida Deputy Insurance Commissioner Lisa Miller talks with Stacey Giulianti of Florida Peninsula Insurance Company on how the reforms have leveled the playing field in insurance litigation and together with innovative industry practices, will bring positive results for consumers, carriers, and their reinsurance companies.Show NotesStacey Giulianti is a Co-Founder and Chief Legal Officer at Florida Peninsula Insurance Company, a Florida-based homeowners property insurance carrier.  Together with its sister company Edison Insurance, they have a combined 180,000 polices in Florida.  The 2022 reforms were designed to stem high insurance and reinsurance rates, carrier insolvencies, inflated claims, an overly-competitive residual market, and especially excessive litigation.  According to the Florida Office of Insurance Regulation, in 2021 Florida had 7% of the nation’s homeowners insurance claims yet 76% of the nation’s homeowners insurance lawsuits.  (For full Show Notes, visit https://lisamillerassociates.com/episode-43-future-of-florida-insurance-litigation/) Giulianti, a former plaintiff attorney before representing insurance companies, said the reforms, specifically the elimination of one-way attorney fees, will “level the playing field” between plaintiff and defense attorneys in disputed claims.  “The problem was that it really only gave the incentive to the plaintiff lawyers, to people like me back in the day, to file that suit, no matter what, it doesn't matter about mediating, it doesn't matter about coming together and trying to find common ground, it was like, ‘Who cares, I am going to get attorney fees one way or the other,’” he said.He disagrees with critics who argued that eliminating the one-way attorney fees would create a barrier for consumers looking to find an attorney to sue an insurance company on their behalf.  He said courts at the end of a case can still award attorney fees if justified and tax costs, such as the hiring of an expert witness, something he said is actually needed in less than 10% of disputes.  “That's a little bit of nonsense from plaintiff lawyers trying to say that you need an expert in every case,” said Giulianti, who is also an accredited claims adjuster.  “You don't, because most of these cases, we already know what the damage is.   And it's really a scope and pricing differential.  Do you repair it, do you replace it, is it $5,000 to repair that, or is it $50,000 to repair that?”  Giulianti said that hiring an expert would still be less expensive to the consumer than paying 30% to 40% of their court award in attorney fees.Innovative Options: The reforms allow insurance companies to offer mandatory binding arbitration in their policies with a resulting premium discount.  “Ultimately what we want is a quick, easy, and inexpensive way to get an answer.  What we are really looking for is for someone to tell us either way, what the answer is to the dispute.  You get the answer relatively fast and it’s resolved, versus court cases that can last for years.”  Giulianti said the vast majority of claims are undisputed and simply get paid by insurance companies.Citizens Property Insurance Corporation, the state-backed residual market carrier in Florida, recently received regulatory approval to handle contested claims outside of court through the state’s Division of Administrative Hearings.   These are for claims that were either denied because of a determination of no coverage or contract limitations regarding the coverage amount.  “I think those types of judges from the administrative side are every bit as smart as anybody else who's going to be(continued)

Florida property insurance companies, their policyholders, and repair contractors are starting the New Year with a new law designed to reform an out-of-control marketplace.  The Florida Legislature in December passed comprehensive measures to stem high insurance and reinsurance rates, carrier insolvencies, inflated claims, excessive litigation, and an overly-competitive residual market.Former Florida Deputy Insurance Commissioner Lisa Miller talks with Citizens Property Insurance President & CEO Barry Gilway, insurance agency executive Andy McGuire, and reinsurance broker Adam Schwebach about the new law and the expectation it will help rebalance Florida’s decimated property insurance market.Show NotesSix Florida insurance companies went insolvent in 2022 and a seventh went into a regulated policy run-off.  Host Miller was joined in the podcast by Barry Gilway, President, CEO, and Executive Director of Citizens Property Insurance; Adam Schwebach, Executive Vice President of reinsurance broker Gallagher Re; and Andy McGuire, Co-CEO of PEAK6 InsurTech, which includes an insurance agency representing more than 100,000 policyholders.  (For full Show Notes, visit https://lisamillerassociates.com/episode-42-barry-gilway-floridas-new-law-is-a-profound-change/) The major provisions of the new law (SB 2-A) cover:Attorney Fees: Ends one-way attorney fees in residential and commercial property insurance policy lawsuits;Offers of Judgment: Reinstates the civil offer of judgment statute (also known as Proposals for Settlement) and makes attorney fees available for the prevailing party, while also allowing for joint offers of judgment;AOBS: Prohibits Assignment of Benefits (AOB) contracts of residential and commercial property insurance policies issued on or after January 1, 2023;Bad Faith: Prohibits the filing of a bad faith lawsuit until a final judgement is issued against the insurance company in the original claim dispute;Citizens Property Insurance Reforms: Makes many essential improvements to current laws governing the state-backed “insurer of last resort,” Citizens Property Insurance Corporation, including:- Changing the eligibility to remain a Citizens policyholder, by requiring that private insurance company coverage has to be 20% more expensive (up from 15%, to match current rules on new policies) and likewise for commercial residential policies;- Ending capped rates (the so-called “glide-path”) and requiring its rates be actuarially-sound and be “non-competitive” with admitted companies’ market rates;- Defining and allowing higher rates for second (non-homesteaded) homes; and- Requiring personal lines policyholders purchase flood insurance to become or remain a Citizens policyholder.Reinsurance: Establishes a second optional hurricane reinsurance fund (The Florida Optional Reinsurance Assistance Program) for carriers, offering rates of 50% to 65% of the cost of on-line rates, while maintaining the Reinsurance to Assist Policyholders (RAP) program created in the May special session;Arbitration: Allows carriers to offer mandatory binding arbitration in their policies with a resulting premium discount;Claims Handling: Reduces from 90 days to 60 days the time insurance companies have to pay or deny a claim, unless extended by regulators; and reduce from 14 days to 7 days the time a carrier has to review and acknowledge a claim communication and begin an investigation, along with other time requirement changes;Claim Filing: Further tightens deadlines for policyholders to report a claim from 2 years to 1 year for a new or reopened claim, and from 3 years to 18 months for a supplemental claim; andGreater OIR Regulation: Allows the Florida Office of Insurance Regulation (OIR) to withdraw approval of policies with an appraisal clause for companies that routinely invoke it; allows OIR to do market conduct exams after a hurricane on those companies in the top 20% of claims filed or DFS complaints and to in(continued)

The Florida Legislature is meeting in special session the week of December 12 to address two issues vital to Florida’s economy: disaster relief for Hurricane Ian victims and further insurance consumer protections for homeowners across the state.  Property insurance and reinsurance rates have grown by 100% or more in the past three years, yet insurance companies’ losses continue, with six carriers becoming insolvent this year, and 13 others withdrawing coverage, driven in part by a nearly 400% increase in claims litigation since 2013. Former Florida Deputy Insurance Commissioner Lisa Miller talks with a former legislator and the head of an insurance brokerage for their perspective on the problem and what the legislature should do to help fix the Florida insurance market crisis.Show NotesHost Miller was joined by former state representative Andrew Learned, a Democrat from the Tampa Bay area.  During his term, he took a keen interest in the consumer protection side of the property insurance reforms passed by the legislature in 2021 and 2022.  Also joining her was Deb Franklin, Co-CEO of PEAK6 InsurTech, part of the PEAK6 family of companies.  InsurTech provides the technology behind online insurance shopping and offers property and casualty insurance through its Team Focus Insurance Group and WeInsure.  The conversation was part of a webinar hosted by the Florida Housing Coalition on December 2, 2022.  (For full Show Notes, visit https://lisamillerassociates.com/episode-41-special-session-preview/) Host Miller set the table for the conversation, identifying four key focus areas of insurance industry discussion going into the Florida Legislature’s December 12 special session:Excessive Litigation – There are renewed calls to eliminate the one-way attorney fees statute altogether, contingency fee multipliers, Assignment of Benefits (AOB) contracts between homeowners and contractors, and reform Bad Faith law under the civil remedy statute. Roof Coverage – The ongoing debate is how carriers can insure roofs, without the coverage being used as a warranty by unscrupulous contractors seeking work or homeowners who fail to perform proper maintenance – and then suing when the claim isn’t fully covered.Citizens Property Insurance Corporation Depopulation – The discussion is on how best to return Citizens to being what the 2002 Legislature created, as the “insurer of last resort.”  Those analyzing current numbers say that one of every two policies written by the private market end up at Citizens at renewal because they can’t compete on price with Citizens’ legislatively-capped rates.Reinsurance Availability – Florida’s private insurance market is having difficulty finding adequate capital to purchase reinsurance (insurance for insurance companies) and to write new business.  Reinsurance costs have risen by 30%-70% at the same time that major reinsurance companies are limiting their capacity in the Florida market.  The Legislature is expected to consider providing assistance to improve the availability of reinsurance. “Consumers don’t get it.  They don’t understand why their rates are climbing or why they’re being non-renewed or cancelled,” said Franklin, whose agents are providing extra education and counseling for customers, while finding coverage alternatives.   Former representative Learned, who owns a local student tutoring company, said he heard from many constituents with the same questions and confusion.  “This kind of skirts around the fact that what we've essentially done is socialize our insurance market, and put all of the risk of all these policies in Citizens Property Insurance, which is essentially the taxpayers and anybody who owns a car,” he said.Franklin pointed out that Citizens is now the largest insurance company in the state, with almost 1.2 million policyholders.  She said Florida needs to consider what Louisiana recentl(continued)