Listen, I know not everyone is passionate about insurance like I am but everybody, and I mean everybody, likes saving money. Well, in the homeowner’s insurance world everything has been going the wrong direction regarding dollar bills, so, in my mind, that means everybody will be interested in reading this. Our Florida Legislature just met from May 23rd to the 27th. This was unusual because they had already completed the only spring session this year and were brought back specifically to address home insurance – because they did nothing about the home insurance market imploding earlier.
As a refresher, here is a statistic to demonstrate how bad things are in Florida now. Nationally, the average number of lawsuits per state against insurance companies averaged 900 suits in 2021. Florida had over 100,000. We are literally 100 times worse than the other 49 States. So, everyone can understand why this avalanche of lawsuits quickly becomes an avalanche of legal expenses for the insurance companies. Insurers are amazingly good at calculating the various risks Floridian homes face, like hurricanes and fire. They use these calculations to accurately price their insurance rates. However, doing the math involved with an out-of-control legal environment has proven to be impossible and our insurance marketplace is now in really bad shape. So far in 2022, we have lost three insurance companies and as I write this, there are two others in dire straits.
Ok, enough with the bad news. I mentioned earlier our Legislature met and they were very successful! Many carriers were limiting the eligible age of a roof to ten years or newer and now the legislation ups that to fifteen years which is great, considering a roof normally has a twenty-year life expectancy. Another critical change removed the ability of attorneys to charge a fee multiplier. This was an old law from the Civil Rights Era and was designed to help people who needed an attorney but could not find one willing to represent them. In that situation, the attorney who took the case could then ask the judge for two to three times their standard fee. This was done, understandably, to encourage attorneys to handle these cases that were being ignored. There is clearly no shortage of attorneys suing insurance companies nowadays, so it only stands to reason their charging triple fees is totally unreasonable. One other important addition is that the homeowner now must pay a roof deductible.
You might say “Why the heck is that good?” Well, before this session, roofers and attorneys were literally knocking on doors telling people they could get a new roof for free. And…they could! So, with this new rule, a homeowner must pay at least 2% of their total insurance limit. As an example, a $300,000 home would now need to pay $6,000 for the roof. The idea here is if the homeowner has some skin in the game (instead of paying nothing) they will be less inclined to have a roofer or attorney file a suit. That is designed specifically to bring down our lawsuits from the currently stratospheric 100,000+ annual suits we see now. As always, it takes time to see if these actions will be beneficial but, in my opinion, they were sorely needed, and I am very optimistic that our home insurance market will stabilize sooner than later.
That wasn’t so boring, was it? I had one more thing to share. I know it is not until next month but the Southwest Florida Business Alliance I started with Katrina Salokar and Jesse Nadell has its next meeting on July 21st. I mentioned in a past article I was trying my best to get George Schaeffer, the billionaire founder of OPI Nails, to speak at our event. Well, I am thrilled to report he has agreed to come! We expect nearly 100 people at the event based on the current signups. That is amazing to me considering this is only our third meeting and is a testament to the desire of our local business leaders to meet and grow together. I am humbled and amazed at the support shown to Katrina, Jesse, and me. This group really seems to have filled a void and it is a remarkable feeling to have the opportunity to be around such high-quality people. It is a very exciting time for Lehigh Acres, and I absolutely love the fact we, as a community, finally have the chance to participate in our own future. We’re going in the right direction everybody, and I say let’s keep moving forward!