South Florida’s new property insurance laws are taking effect as it enters a new hurricane season, predicted to be 65% above normal activity, and attorneys anticipate a rough ride for their homeowner clients.
Policyholders won’t be in a good position is there’s a hurricane in the short term. That’s according to insurance attorney Adrian Neiman Arkin of Mintz Truppman in Miami, who said no one’s premiums have yet gone down since Gov. Ron DeSantis signed a new property insurance bill into law last week.
“The only people who won in this legislative session were the insurance companies, who now have a nice tax holder haven of their own,” said Arkin. “And we don’t get Citizens insurance or the benefit of that tax haven.”
Weather and climate disasters cost $145 billion dollars last year, according to the National Oceanic and Atmospheric Administration, which said it was the third most expensive year to date.
There will be higher insurance premiums during the 2022 hurricane season due to growing inflation, supply chain strains and a tighter underwriting process, according to Gina Clausen Lozier of Berger Singerman’s insurance team in Miami.
“We all know the price of real estate has gone up. If you have a hurricane deductible that’s a percentage of your limit, that is also going to be in consideration,” said Lozier. “You’re going to have an increase in your deductible.”
‘It’s Going to Cost Everyone Money’
Insurance attorneys typical see plenty of claims related to storms, fire, air conditioning and hot water leaks. But with an expected active hurricane season, Lozier said it’s important for attorneys to be prepared for any kind of litigation, as there could be more claims when some companies become bankrupt.
That means doing research on insurance companies and taking a closer look at the provisions of their policies.
“Know what the status is and to whether they’re still writing and to whether you get the FIGA protection in the event that a company would go insolvent,” said Lozier.
The Florida Insurance Guaranty Association is a state-based, program that pays the claims of insolvent insurance companies to protect policyholders.
It’s gotten much harder to make a claim and can take creative lawyering to prove to an insurance company that a hurricane did damage to the house, according to Arkin, who said a lot of hurricane damages are not covered at all.
“Rain inside your house is not covered unless the hurricane first damages the outside of the house,” said Arkin. “This is something that makes sense, but during a hurricane, the house is still left but the roof can be lifted and now it’s not keeping water out, which leads to a slew of problems.”
Although Arkin noted that legal and insurance professionals can make a lot of money of off future claims, which could help boost the economy and create jobs, she said homeowners will end up bearing the costs.
“If the big one hits, it’s going to hit. The idea that it’s going to cost insurance companies money is laughable,” said Arkin. “It’s going to cost everyone money.”