Florida leaders blame insurance crisis on lawsuits, but evidence is thin; Fighting lawsuits was Florida’s response to the insurance crisis, but evidence hasn’t materialized.

Tampa Bay Times
Thursday, October 19, 2023

TALLAHASSEE — Barbara Glover narrowly missed being crushed by the oak tree that fell through her roof during Hurricane Ian last year.

As she fled her Tampa home of 35 years, clutching nothing but a duffel bag of clothes, she knew what to do next.

She called her insurance company, Universal Property and Casualty. And she waited for them to make her whole.

After months of feeling jerked around by the company and seeing her home condemned by the city, she took her case to court. In February, Glover became one of 4,571 people — 15 per day — to sue Universal this year.

As property insurance premiums rose to become a full-blown crisis for Floridians in recent years, the primary response by Gov. Ron DeSantis and state legislators is to stamp out those lawsuits.

But five years into the crisis, the evidence that lawsuits caused Floridians’ premiums to skyrocket and caused 13 insurers to go out of business hasn’t materialized.

Litigation has yet to be found to be the cause of a single insurance company failure. Despite cracking down on litigation, premiums are still going up, and the industry now says they won’t go down in the foreseeable future because of factors, such as climate change, that are out of their control.

Some lawmakers are now wondering when, if ever, they’ll see proof that what they voted for was effective.…

Kenneth Klein, a former defense lawyer and professor at California Western School of Law, gave a presentation to the National Association of Insurance Commissioners last year about how there was a lack of evidence for litigation having a material effect on rising premiums.

In an interview, Klein suggested that Florida’s small insurers, which dominate the market, are too concentrated in the state to absorb storm risk. One of the few options to control costs is to be more aggressive about how they handle claims, which can lead to more lawsuits.

“It becomes a cycle that feeds on itself,” Klein said.

Insurance companies have pushed four times since the 1970s to block lawsuits across the country, said Joanne Doroshow, executive director of the Center for Justice & Democracy at New York Law School. Her organization has studied those efforts, and after each one, premiums didn’t go down, she said.

“This is a pattern that goes on in this country,” she said.

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