Millions of Floridians will feel the pinch in their pocketbooks when the calendar turns to 2017, as higher rates for some of the top property and health insurers in the state are set to take effect.
The top five property insurers in the state – Universal, Citizens, Security First, Federated National and Heritage – have been approved by state regulators for statewide average rate hikes of between 5.5 percent and 10 percent for residential homes.
Property insurers say the reason for the increases has nothing to do with Florida’s first two hurricanes hitting the state in more than a decade.
They say a practice known as “assignment of benefits,” in which homeowners sign over claim benefits to a contractor during an emergency, such as a busted pipe leaking water in the house, is being abused by contractors who inflate damage.
Private insurers agree. Although the problem began in South Florida, it’s moving to Tampa and Orlando, said Lisa Miller, a Tallahassee lobbyist for several private carriers.
“All policyholders are paying for the actions of a few who are cheating the system and costing all of us higher premiums,” Miller said. “We have to get a handle on this assignments of benefits issue.”
Legislation to cap attorneys fees and crack down on fraud in water claims has been filed the last two years but hasn’t gained much traction in the Capitol. Trial-attorney groups and contractors have said insurance companies are overselling the problem.