The Palm Beach Post
After ’60 Minutes,’ Palm Beach County legislator calls for probe of Ian insurance payouts
Anne Geggis, Palm Beach Post – October 8, 2024
Reports that damage claims from Hurricane Ian were systemically downgraded has a Palm Beach County state lawmaker leading a call for a Florida grand jury and a select legislative committee to investigate.
Democratic state Rep. Kelly Skidmore of Boca Raton said the report on the CBS network news magazine “60 Minutes” that aired Sept. 29 echoes testimony heard during a 2022 House Commerce Committee meeting. During that hearing homeowners and insurance adjusters testified that valid claims from the hurricane two years ago were rejected and underpaid once it came time to make insured Floridians whole from the damage suffered.
“This exposé was, unfortunately, not news to us in Florida,” Skidmore said. “For nearly 30 years, Republicans have had full oversight and control over the insurance industry. The result? A downward spiral for property owners with no real solutions to the problem.”
The Florida House Democratic Caucus has sent a letter to Republican Gov. Ron DeSantis asking for the special statewide grand jury to investigate whether illegal activity resulted in insurers giving Hurricane Ian victims short shrift. And another letter was sent asking for the select legislative committee to Speaker of the House-Designate Daniel Perez, a Miami area Republican, Skidmore said.
Governor DeSantis: Concern already addressed on Hurricane Ian insurance payouts
Asked about the Democrats’ request, a spokesman for the governor provided a clip of DeSantis reacting to the 60 Minutes’ report but not the call for the statewide grand jury. DeSantis said that safeguards against downgraded claims were already baked into reforms that were passed post-Hurricane Ian.
“We now have protections in Florida law that you can’t just disregard what the adjuster does,” DeSantis said, after noting he is “not much of a fan” of the CBS news magazine. “You actually have to have a clear, valid reason to be able to depart downward. That may not have been in place when Ian happened.”
DeSantis also noted that the company the news magazine focused on, Heritage Property & Casualty Insurance, was fined $1 million last May for violating claims-handling requirements after Ian. Most of the findings in that March report, however, focused on handling claims in a timely manner and following procedures, rather than the actual amounts paid, although it did note Heritage’s failure to pay interest.
Heritage, for its part, issued a public statement after the 60 Minutes segment aired noting the program’s reporting omitted information the 12-year-old company had provided about improvements that were made in its claims-handling procedures in Ian’s wake. And also there was no deliberate effort to deceive customers about the value of their claims, Heritage said.
“It is important to point out that when we did our own review of Hurricane Ian claims following 60 Minutes’ outreach — using a random sample of 10,000 claims — we found that 4,162 of those were revised downward, 2,583 of them were revised upward and about 3,311 of them had no change from what the adjuster reviewed. This is further evidence that we work to pay every eligible claim,” the company statement reads.
Perez could not be reached by email, text or phone to respond to the Democrats’ call.
Florida property insurance a political hot potato
The same year that Hurricane Ian’s winds made landfall at nearly Category 5 strength, five property insurance companies became insolvent or stopped doing business in the state. Special legislative sessions were called to shore up the situation.
But Democrats were unhappy with many of the reforms that the Republican-dominated Legislature put in place. Those measures largely focused on stemming the tide of litigation from contested damage claims. But critics said the Legislature’s actions left consumers with little recourse to contest an insurance companies’ valuation of a claim.
More than a year out from those reforms, Floridians typically pay two to three times more for their property insurance premiums than the national average. The state’s potential for catastrophic hurricanes, the number of lawsuits and the financial industry’s reluctance to help insurers’ with the risk of those factors have been largely blamed for the state of affairs in providing ample and affordable property insurance.
Florida should lead the way in seeking solutions to the problem, Skidmore said, noting that Democratic U.S. Rep. Jared Moskowitz has proposed spreading the risk of these storms around a much wider area with a National Catastrophic Risk Pool. Moskowitz of Parkland has proposed that natural catastrophes like the one hurricanes Ian, Helene and, now possibly Milton present — with widespread, devastating damage — would be backed by the nation’s credit, instead of relying on private insurers and money markets to shoulder the worst sort of risks that have wiped out some insurers faced with a crush of damage claims.
“I am renewing my call to act and support Congressman Moskowitz’s efforts to, at the very least, have a conversation about creating a National Catastrophe Risk Pool,” Skidmore said in a prepared statement.
The risk pool idea is similar to a bill former Democratic U.S. Rep. Charlie Crist proposed when he represented Pinellas County. Moskowitz’s bill, introduced in March 2023, has not gotten a committee hearing or a cosponsor.
How to prepare: Hurricane Guide 2024
Anne Geggis is the insurance reporter at The Palm Beach Post, part of the USA TODAY Florida Network.