AAA, a Florida-based insurer, has decided not to renew package policies that combine home, automobile, and optional umbrella coverage in the state, joining other companies like Farmers Insurance that have also ended homeowner insurance policies in Florida. The insurance crisis is primarily attributed to increased frivolous lawsuits and fraudulent insurance claims triggered by a 2017 Florida Supreme Court ruling favoring plaintiffs. As a result, 80% of property claim lawsuits in the country occurred in Florida, leading to insolvency for several local insurance providers and the withdrawal of three national insurers from the state. Florida's vulnerability to extreme weather events, particularly hurricanes, has further contributed to the crisis. Premiums for Florida homeowners cost $6,000 per year, up 42% from the previous year, compared to the national average of $1,700.
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NewsTranscript
00:00 It's Ben Zinga and here's what's on the block.
00:02 AAA, a Florida-based insurer, has decided not to renew package policies that combine
00:07 home, automobile, and optional umbrella coverage in the state, joining other companies like
00:12 Farmers Insurance that have also ended homeowner insurance policies in Florida.
00:17 The insurance crisis is primarily attributed to an increase in frivolous lawsuits and fraudulent
00:21 insurance claims triggered by a 2017 Florida Supreme Court ruling favoring plaintiffs.
00:27 As a result, 80% of property claim lawsuits in the country occurred in Florida, leading
00:32 to an insolvency for several local insurance providers and the withdrawal of three national
00:36 insurers from the state.
00:38 Florida's vulnerability to extreme weather events, particularly hurricanes, has further
00:42 contributed to the crisis.
00:44 Premiums for Florida homeowners cost on average $6,000 per year, up 42% from the previous
00:49 year, compared to the national average of $1,700.
00:54 This has led some to opt for being uninsured or seek coverage from the state-backed insurer,
00:59 Citizens Property Insurance Corporation.
01:01 Over the past 18 months, Citizens Property Insurance Corporation's market share has
01:05 doubled, adding approximately 30,000 new subscribers monthly.
01:09 This has exposed citizens to greater risk in the event of a major disaster, potentially
01:13 requiring taxpayers in the state to cover any payout, shortfall through a hurricane
01:17 surcharge on their tax bill.
01:18 For all things money, visit BenZinga.com.
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