Florida has not seen a hurricane in 10 years, and the state’s ranking for worst drivers has improved dramatically over the past five years. Why, then, are our homeowners and auto insurance rates among the highest if not the highest in the nation? It seems unfair, but no one said insurance rates were fair. Reasonable, maybe — but not fair.
This week marks an important milestone for Florida: We have officially completed 10 years of relatively quiet hurricane seasons, the longest stretch without a hurricane making landfall in 160 years of tracking such data. That, insurance companies will tell you, is a long time.
The Florida 2nd District Court of Appeal decided a case in September that illustrates just how tough it can be to fight an insurance company. It also shows that Chinese drywall complaints are still working their ways through insurance companies and the courts, but the insurance companies have taken steps to avoid paying homeowners’ claims.
After an accident, no one wants to spend time fighting an insurance company. If you are injured, you want to focus on getting better. If your property is damaged, you just want it fixed so you can move on with your life. If you have lost a loved one, you need time to mourn and to adjust to the abrupt change in your life.
There are few things you can really count on these days, but one of them is that Florida will rank among the most expensive states for insurance. We ranked third overall in a report recently released by financial analysis website NerdWallet.com. The researchers looked at the average costs of homeowners, health, life and auto insurance in each state and the District of Columbia and then determined what portion of the state’s median household income was spent on insurance.
The Office of the Insurance Consumer Advocate is celebrating its unofficial 25th anniversary this year. The Florida Insurance Commissioner originally created the office in 1990. The Legislature, however, did not adopt the governing statutes until 1992. The advocate is now appointed by and reports to the state’s Chief Financial Officer but operates, as the position always has, as an independent entity.
Although insurance-related considerations and needs are of course quite different in many respects for homes and businesses, respectively, they certainly do coalesce in one very important way, namely this: Regardless of the nature of a property, its owners need to protect against third-party liability in instances where it is alleged that some danger or defect resulted in personal injury.
It is not easy to sue the officers and directors of a business organization. You may believe in your product, but you know enough about human nature that you do not want to be personally liable if something goes wrong. You form a corporation — or a limited liability partnership or another form of business organization — to protect yourself and your family. The company is liable for any losses. The directors, officers, shareholders or members are off the hook.
In our January series about understanding insurance policies, we focused on homeowners insurance and threw in a little auto coverage now and then. Our reasoning was simple: More people are likely to have a claim under one of these policies than their other non-health insurance policies. Start big, then narrow your scope: When you know what to look for in a homeowners policy, chances are good you will be able to find the important information in any other policy.
When it comes to unfair trade practices in the insurance industry, we don’t need the statute to figure a few of them out. Misrepresenting benefits, overcharging for coverage and underpaying claims — better known as lying, cheating and stealing — are universally acknowledged to be unfair trade practices. Yes, brokers and agents may try to justify the half-truth, and insurance companies may engage in advertising puffery, but, really, the lines are clearly drawn for those three misdeeds.
