8 ms·

Florida insurers steered money to investors while claiming losses, study says

166 points by howard941 2y ago

nine_zeros 2y ago
But of course - I don't understand why people are forgetting that when companies raise prices/cut benefits, it is not because of actual losses but because they want to return more of their revenue to shareholders than to customers or employees. It is a flawed model that is sucking society dry but this is how America is set up. There are only a few ways to beat them - some of them involves lawmakers passing laws that protect people over investors. Ain't happening with the current elected officials.
- yummypaint 2y ago
  It's all predicated on having competition, which of course companies hate. Once a company becomes both a monopoly and "too big to fail" it isn't really a company anymore, but functionally a piece of government run by unelected profiteers. If elected officials did their jobs and maintained something resembling a free market everything would be so much better.
  - nine_zeros 2y ago
    > If elected officials did their jobs and maintained something resembling a free market everything would be so much better. Not happening for the next 4 years. Absent government help, people need to take matters in their own hands. Build unions and co-ops. Customer unions, patient unions, homeowners unions - not just employer unions. Band together and buy reduced price/better termed insurance. Ultimately, shareholders must take a few years of losses - that's just business.
  - redserk 2y ago
    I'm confused at the "free market" implication here. What resembles the free market has been deciding "Florida isn't worth it" and companies have been pulling out in response. I'll concede in that a few bad regulations have accelerated this trend but these regulations, even if repealed, can't change the fact that tropical weather is becoming more severe. After all, there are many other states that have a lot lower likelihood of town/city-level destruction in a year.
- throwaway5752 2y ago
  "It is a flawed model that is sucking society dry but this is how America is set up." This article is about a problem of how Florida, specifically, is set up. To the downvoter - perhaps you didn't read the article, don't know about Florida's P&C regulatory problems, or wanted to make another point. But from the article: "The Office of Insurance Regulation said in a statement that the study was not given to lawmakers because it was “not a formal examination report.” It was produced months before lawmakers met in emergency legislative sessions in 2022 and left in a “draft” status." Florida knew this, and was surpressing this, because the state executive branch is corrupt and in a state of regulatory capture.
  - acdha 2y ago
    Yes, and that’s why it’s relevant: Florida has a major problem which can’t be solved by pretending really hard that it doesn’t exist, and the legislative climate won’t allow actual fixes. Republicans have ensured that climate change is hitting everyone as hard as possible, and blocked corporate accountability or regulation, and prevented raising taxes to have the government step in, and neither party is willing to acknowledge the negative consequences of having home equity be the primary retirement fund for most people. There’s no way to make the current model work and the alternatives are blocked.
    - throwaway5752 2y ago
      Agreed. It's trivially easy to manipulate suggestible people and say "this is why the system doesn't work" instead of really understanding something complex. The system works. It is broken in Florida, but Florida broke it and has corruptly and incompetently swept the problem under the rug for a couple of decades while luring people with unsustainably low taxes and insurance premiums. That is beginning to unravel in a way that cannot be hidden.
      - acdha 2y ago
        I don’t think we can say the system really works as much as it’s failing slower in other areas. We keep bumping into reminders that the post-WWII era was something of an anomaly rather than a steady state. Florida is a front runner because it’s both unusually highly exposed and ideologically captured but I think much of the country isn’t far behind - just basic things like roads and sewers aren’t sustainable in many areas without increased taxes, and a lot of people do not have much margin for that. An awful lot of infrastructure is around its design lifetime already and much of that will be getting hit with increased climate stress.
- quickthrowman 2y ago
  > But of course - I don't understand why people are forgetting that when companies raise prices/cut benefits, it is not because of actual losses but because they want to return more of their revenue to shareholders than to customers or employees. When I raise my prices (construction services), it’s due to the annual wage increase for the union labor I use to perform the work. If I arbitrarily raise my price, I will lose a competitively bid project to a hungrier competitor. I understand that not all industries are competitive, but that’s what regulations should be used for, regulating markets with a handful of players. Not all price increases are due to greed, the price of everything goes up over time due to inflation.
GenerWork 2y ago
Not surprising in the slightest. Let's hope the legislature delivers the recommendation that the office is asking for, hopefully this'll help slow the raise in insurance rates and get people off of Citizens.
speff 2y ago
> Regulators asked for that [better metrics] in 2023 but lawmakers rejected it, claiming it would “upset the apple cart” of Florida’s insurance industry. I don't disagree with the lawmaker's stance on this one. FL's in a bad spot where home insurance in particular is unsustainable given the increasing threat from climate change. Why would I want to run an insurance operation in FL without an actual incentive (read: more money)? There ARE going to be multiple city-leveling hurricanes in the future - how do people expect to be able to pay for this?
- dsr_ 2y ago
  You raise the rates on everyone to cover actual expected losses, and make sure that the insurance companies don't commit fraud. Then people will say that they can't afford Florida. And they will be correct.
  - speff 2y ago
    Agreed, but it seems like the people of FL want a populist who will prevent the companies from raising rates[0][1]. What happens then? It's rhetorical, since we see in this post's article what happens. But my point is that something like this was more-or-less inevitable. [1]: https://www.flgov.com/eog/news/press/2025/governor-ron-desantis-announces-rate-reductions-miami-dade-county-auto-insurance https://www.flgov.com/eog/news/press/2025/governor-ron-desan... [2]: https://www.floridapeninsula.com/blog/florida-legislation-helping-to-reduce-runaway-home-insurance-premium-costs https://www.floridapeninsula.com/blog/florida-legislation-he...
    - toomuchtodo 2y ago
      They want the socialism benefits wrapped in populist authoritarianism to appease their tribal and in group belief system. “The only moral benefits are my benefits.” With Florida climate risk accelerating, the new admin telling states FEMA is unnecessary, and ~15-20% of Florida homeowners going without property insurance due to cost, this will manifest in an unfortunate but entirely expected outcome: catastrophic economic loss at some point in the future with no recourse for the majority impacted (citizen homeowners and GSE investors alike).
dsr_ 2y ago
Sounds exactly like fraud.
s1mplicissimus 2y ago
The logical outcome of shareholder driven economy. Reminds me of a youtube quote: "Sell the houses to whom, Ben? Aquaman?"
wheelerwj 2y ago
Florida Insurers were running a Ponzi scheme, got it.
- toomuchtodo 2y ago
  Still are. https://news.ycombinator.com/item?id=42450680 https://news.ycombinator.com/item?id=42450680 https://news.ycombinator.com/item?id=41664750 https://news.ycombinator.com/item?id=41664750
  - whimsicalism 2y ago
    again, government at fault. it is beyond stupid that GSE mortgage backstops even exist in the first place
emorning3 2y ago
BUT BUT BUT Floridians voted for DeSantis, so its all good. So now he's busy protecting insurers from being sued. So nothing to see here. Just the government that you voted for collecting their bribes and protecting their friends. Floridians are gonna get exactly what they deserve from the new administration.
- jffry 2y ago
  DeSantis received 4.61 million votes [1] from a population of 23.37 million [2]. 3.15 million voters voted for a candidate other than DeSantis [1] [1] https://en.wikipedia.org/wiki/Electoral_history_of_Ron_DeSantis#2022 https://en.wikipedia.org/wiki/Electoral_history_of_Ron_DeSan... [2] https://en.wikipedia.org/wiki/Florida https://en.wikipedia.org/wiki/Florida
  - speff 2y ago
    14.5m eligible voters[0] - but your point still stands there. Though I'm of the opinion that non-voters implicitly voted for whoever won. So 11.35m hypothetical people voted for DeSantis in my mind. [0]: https://dos.fl.gov/elections/data-statistics/voter-registration-statistics/voter-registration-reports/voter-registration-by-party-affiliation/ https://dos.fl.gov/elections/data-statistics/voter-registrat...
  - emorning3 2y ago
    PS: Not voting is voting. No real American has the right to sit on the sidelines anymore.
  - bilbo0s 2y ago
    And that's how democracy works. If you didn't vote? Well, your fault. The beauty of the election is that it means right now in Florida you have exactly the government you want and deserve.
    - deleted 2y ago
      [deleted]
  - 2y ago
wonderwonder 2y ago
What's interesting is the entire thing is a game. I live in Florida. Had a roofer come by a couple years ago saying that a storm had come through a few months ago and there had been hail. So if he goes up on my roof and is able to find proof of hail damage I get a new roof for free. I needed a new roof at the time so while I generally look poorly on solicitation, I told him go ahead. A month later I had a brand new roof that cost me $1,000 out of pocket instead of $25,000. These guys must have done 10 roofs within a few streets of my house. So while the 250k is not a lot for an insurance company to eat, I am sure when that is multiplied by 1000's over the state, it gets expensive. With that said, I also had a flood (10 inches of standing water) during a storm and my flood insurance company denied my claim because my sunken living room was considered a basement (2 steps down from the main floor). Turned into an indoor pool. So that was a nice $50k I had to spend out of pocket. I even paid separately for flood insurance as my hoi does not cover flooding. So total waste of money on that. The entire thing is a circle of people scamming each other.
- jbs789 2y ago
  The roof stuff drives up prices massively. The MGA stuff is just the tool/response for the insurer to manage the downside for things like the roof nonsense - if they can pocket the fee when they write the deal then if there’s a subsequent rush of claims (some roofer, in some area, following some storm, which inflates claim costs), then the loss is capped at the equity they have in the insurance carrier.
- bashmelek 2y ago
  My thoughts exactly. I live in Florida, and have for 30 years. I’ve never personally used my insurance, and my parents had to use theirs once when the neighbor’s tree randomly fell in our yard, and they also had their insurance pay for most of their roof-a lot of people do. I paid for my own roof fully out of pocket. If you are near water or below ground then there is a near certain risk of flood, and I realize I subsidize those areas while I chose to stay away from water. But the entire national conversation is focused on saying that climate change has doomed Florida
- selimthegrim 2y ago
game_the0ry 2y ago
Companies and their executives need to be held accountable of this will never stop. No more bail outs and implement clawbacks.
- emorning3 2y ago
  What the insurers are doing is all legal, what do you propose exactly? Do you think that the current administration is going to 'hold executives accountable'? Trump could literally drive over to your house and shoot you in the head for even suggesting such a thing.
maxerickson 2y ago
I wonder how those rates of return compare to say Georgia and Wyoming. (A state you'd expect to have reasonably similar risk and one where you'd not necessarily expect it to be similar)
- bilbo0s 2y ago
  Average elevation in Georgia: 600ft Average elevation in Florida: 100ft Georgia coastline: 100 mi non-NOAA Florida coastline: 1350 mi non-NOAA Even when cheating with non-NOAA numbers, Georgia is nowhere near comparable to Florida. Most of the people in your pools in Georgia are not on the coasts, and live at non-dangerous elevations. Whereas in Florida, nearly all of the people in your pools live on the coasts, and at extremely dangerous elevations.
  - dmoy 2y ago
    For anyone else momentarily confused like me: risk pools (which is evidently a term of art in insurance: https://en.m.wikipedia.org/wiki/Risk_pool https://en.m.wikipedia.org/wiki/Risk_pool) Not swimming pools, which was my first read of above comment, at which point I thought, "well obviously I got something wrong there, time to look at Wikipedia"
    - bilbo0s 2y ago
      Sorry. I should have been more clear. Yes. Risk pools. What I was trying to illustrate is that the fundamental model of sharing risk can work in a place like Georgia, whereas in a place like Florida it doesn't.
  - maxerickson 2y ago
    Okay, pick whatever state, but the interesting thing is looking at the rate the industry is pulling out profits at. Are the Florida affiliates 10 times more profitable or 100? And so on.
whimsicalism 2y ago
Sorry but a 4.5% profit cap in a state like Florida is ridiculously low. The problems with insurance are usually state-caused.
napierzaza 2y ago
[dead]
iask 2y ago
I think the elephant in the room is fraudulent claims. Majority of the claims filed is related to over-priced contractors. Pick any city, pick any house - old, new, big, small, tiny - the average roof replacement is 4x-5x the cost! I know of multiple cases where the adjusters send in claims that are 50% to 90% of the actual repair cost. This is the REAL problem. Not hurricanes. It’s the fucking fraud. I think the only option to combat this is to give home owners the right to fix things like roof themselves…why do I need a city permit, why do I need a fraudulent contractor permitted ONLY by the city (I don’t want the city looking out for me…that’s always their BS argument…leave that to me). I should be able to shop the supplies myself. Here’s another exercise - pick any city in FL - try to buy roofing materials yourself. The point is - Fraud is the biggest problem with homeowners insurance in the state of FL.
- quickthrowman 2y ago
  > why do I need a city permit, why do I need a fraudulent contractor permitted ONLY by the city (I don’t want the city looking out for me…that’s always their BS argument…leave that to me). I should be able to shop the supplies myself. You are not the only person that will own the house you live in, that’s essentially what permits and regulations are for, to ensure the next owner isn’t saddled with a stupid decision made by the previous homeowner. Roof inspections are particularly important in places with snow load or hurricane force winds. Roof claims are prorated, if your previous roof was rated for 30 years and installed 15 years ago, you get half of the replacement cost paid. If you don’t like it you can pay off your house and self-insure your residence. If you don’t like cities, go buy land and build a house in an unincorporated area, there are places that completely lack any local building code enforcement.
  - iask 2y ago
    You are not the only person that will own the house you live in, that’s essentially what permits and regulations are for, to ensure the next owner isn’t saddled with a stupid decision made by the previous homeowner. Roof inspections are particularly important in places with snow load or hurricane force winds. That’s what home inspectors are for at the time of purchase. And even if I choose to replace the roof myself - the city is free to inspect according to their ordinances. What I disagree with is that you MUST use their approved contractors. And the prorated nonsense is simply mathematical fraud.
cm2187 2y ago
Not sure I agree with the article. 1) Making a loss doesn't prevent you from paying a dividend. Dividends aren't paid from the current year's profit, but from retained earnings, i.e. from accumulated profits since the creation of the company. It is frequent for companies to maintain their dividend policy through cycles. 2) The insurer doesn't have to make a loss overall to make a claim that the rates charged on some specific part of their portfolio do not cover expected losses on that portfolio, since circumstances have changed. In theory insurance rates must be sufficient to cover expected losses, and I am pretty sure financial regulations require insurers to do so (prudential rules/solvency, though I do not work for an insurance company so not an expert). So it is one thing to call the insurers claims bullshit, and maybe it is. But 1) they paid a dividend or 2) the company did not make a loss for the year, aren't valid arguments.
loeg 2y ago
Worth understanding this whole argument applies only to local Florida-only insurers; the big national entities don't operate like this and also found Florida too expensive to operate in prior to the 2023 tort/insurance reforms. > So executives create sister companies that charge the insurance company for basic services, such as claims handling, underwriting, accounting and issuing policies. (Large national insurers typically handle all of those services internally.)
- cptskippy 2y ago
  This practice is pretty common in auto insurance. The company you wrote your policy with is usually broker and your ID car will list the actual Insurance Company. If you go through an independent agent you'll encounter 3 layers of abstraction where the agent writes business for multiple brokers who manage books of business for different insurance companies.
serjester 2y ago
For some background, Florida is an incredibly challenging insurance market. In 2020, the state accounted for 85% of insurance litigation despite making up only about 10% of total premiums in the US. That combined with sky rocketing reinsurance costs, has driven tons of reputable carriers out of the state. They dodged a bullet with Milton - many of the remaining carriers are one big hurricane away from insolvency.
- cptskippy 2y ago
  ~20 years ago when I worked for an auto insurance broker, we opened a program in Florida and it was very challenging. I'm trying to remember the specifics but the regulations were such that you couldn't collect more than like 15 days of premium in the down payment and you were required to cover that policy for the first 30 days. So there was always something like a 15 day gap. This meant policies were cancelling after the first month and rewriting. They didn't have electronic approvals at this time so you couldn't implement any sort of real-time checks either. If your producer wrote a policy, you were on the hook for it. I think we introduced some by-fax validation process to mitigate this. Another common practice for people who need insurance to register vehicle but had no intention of carrying insurance was to write bad checks. If the person was approved they'd basically have 30 days of coverage for free. If they had an accident they could pay the premium, if they didn't then they could let the policy lapse. There was also something weird about the uninsured and underinsured coverage, I can't remember specifics but I think it was that the coverage was required due to the high number of people who drove uninsured but we couldn't charge for it? I can't recall exactly. The regulations were such that it made it very hard to make money and I think we backed out of the market after 12-18 months.
  - howard941 2y ago
    Uninsured/underinsured is not required in Florida. It's good to have because it's the only coverage that actually benefits the insured - but it's not required. And it's not cheap.
unicredit 2y ago
[flagged]
blackeyeblitzar 2y ago
I am surprised most of this discussion doesn’t touch on the affiliates issue, and it makes me think people aren’t reading the article. The summary is that many of these insurance companies are creating shell companies that provide services to the main insurance company, and charge a lot for those things. So the profit of the insurance company remains low and meets regulations, while all of the ‘real’ profit is hidden in these affiliated companies. Maybe that is technically legal but it certainly does not seem to be what the law intended. It also seems suspicious that this report was not disclosed to the public, and that it took so long to respond to information requests. And it also seems odd that neither the insurance commissioner nor Governor De Santis have acknowledged these issues.
cudgy 2y ago
The actual report with the findings had the following interesting statement at the bottom of page 3. Seems convenient to claim fraud as a trade secret, which apparently prevents this report from exposing those companies. “A number of the documents utilized were filed with the Office by an insurer as a “Trade Secret”. As such, information regarding any of the individual companies discussed in the Appendixes to this report may not be released without approval of the Director.” https://www.documentcloud.org/documents/25540452-affiliated-fee-analysis-executive-summary/ https://www.documentcloud.org/documents/25540452-affiliated-...

166 points by howard941 2y ago

But of course - I don't understand why people are forgetting that when companies raise prices/cut benefits, it is not because of actual losses but because they want to return more of their revenue to shareholders than to customers or employees. It is a flawed model that is sucking society dry but this is how America is set up. There are only a few ways to beat them - some of them involves lawmakers passing laws that protect people over investors. Ain't happening with the current elected officials.

yummypaint 2y ago
It's all predicated on having competition, which of course companies hate. Once a company becomes both a monopoly and "too big to fail" it isn't really a company anymore, but functionally a piece of government run by unelected profiteers. If elected officials did their jobs and maintained something resembling a free market everything would be so much better.
- nine_zeros 2y ago
  > If elected officials did their jobs and maintained something resembling a free market everything would be so much better. Not happening for the next 4 years. Absent government help, people need to take matters in their own hands. Build unions and co-ops. Customer unions, patient unions, homeowners unions - not just employer unions. Band together and buy reduced price/better termed insurance. Ultimately, shareholders must take a few years of losses - that's just business.
- redserk 2y ago
  I'm confused at the "free market" implication here. What resembles the free market has been deciding "Florida isn't worth it" and companies have been pulling out in response. I'll concede in that a few bad regulations have accelerated this trend but these regulations, even if repealed, can't change the fact that tropical weather is becoming more severe. After all, there are many other states that have a lot lower likelihood of town/city-level destruction in a year.
throwaway5752 2y ago
"It is a flawed model that is sucking society dry but this is how America is set up." This article is about a problem of how Florida, specifically, is set up. To the downvoter - perhaps you didn't read the article, don't know about Florida's P&C regulatory problems, or wanted to make another point. But from the article: "The Office of Insurance Regulation said in a statement that the study was not given to lawmakers because it was “not a formal examination report.” It was produced months before lawmakers met in emergency legislative sessions in 2022 and left in a “draft” status." Florida knew this, and was surpressing this, because the state executive branch is corrupt and in a state of regulatory capture.
- acdha 2y ago
  Yes, and that’s why it’s relevant: Florida has a major problem which can’t be solved by pretending really hard that it doesn’t exist, and the legislative climate won’t allow actual fixes. Republicans have ensured that climate change is hitting everyone as hard as possible, and blocked corporate accountability or regulation, and prevented raising taxes to have the government step in, and neither party is willing to acknowledge the negative consequences of having home equity be the primary retirement fund for most people. There’s no way to make the current model work and the alternatives are blocked.
  - throwaway5752 2y ago
    Agreed. It's trivially easy to manipulate suggestible people and say "this is why the system doesn't work" instead of really understanding something complex. The system works. It is broken in Florida, but Florida broke it and has corruptly and incompetently swept the problem under the rug for a couple of decades while luring people with unsustainably low taxes and insurance premiums. That is beginning to unravel in a way that cannot be hidden.
    - acdha 2y ago
      I don’t think we can say the system really works as much as it’s failing slower in other areas. We keep bumping into reminders that the post-WWII era was something of an anomaly rather than a steady state. Florida is a front runner because it’s both unusually highly exposed and ideologically captured but I think much of the country isn’t far behind - just basic things like roads and sewers aren’t sustainable in many areas without increased taxes, and a lot of people do not have much margin for that. An awful lot of infrastructure is around its design lifetime already and much of that will be getting hit with increased climate stress.
quickthrowman 2y ago
> But of course - I don't understand why people are forgetting that when companies raise prices/cut benefits, it is not because of actual losses but because they want to return more of their revenue to shareholders than to customers or employees. When I raise my prices (construction services), it’s due to the annual wage increase for the union labor I use to perform the work. If I arbitrarily raise my price, I will lose a competitively bid project to a hungrier competitor. I understand that not all industries are competitive, but that’s what regulations should be used for, regulating markets with a handful of players. Not all price increases are due to greed, the price of everything goes up over time due to inflation.

GenerWork 2y ago

Not surprising in the slightest. Let's hope the legislature delivers the recommendation that the office is asking for, hopefully this'll help slow the raise in insurance rates and get people off of Citizens.

speff 2y ago

> Regulators asked for that [better metrics] in 2023 but lawmakers rejected it, claiming it would “upset the apple cart” of Florida’s insurance industry. I don't disagree with the lawmaker's stance on this one. FL's in a bad spot where home insurance in particular is unsustainable given the increasing threat from climate change. Why would I want to run an insurance operation in FL without an actual incentive (read: more money)? There ARE going to be multiple city-leveling hurricanes in the future - how do people expect to be able to pay for this?

dsr_ 2y ago
You raise the rates on everyone to cover actual expected losses, and make sure that the insurance companies don't commit fraud. Then people will say that they can't afford Florida. And they will be correct.
- speff 2y ago
  Agreed, but it seems like the people of FL want a populist who will prevent the companies from raising rates[0][1]. What happens then? It's rhetorical, since we see in this post's article what happens. But my point is that something like this was more-or-less inevitable. [1]: https://www.flgov.com/eog/news/press/2025/governor-ron-desantis-announces-rate-reductions-miami-dade-county-auto-insurance https://www.flgov.com/eog/news/press/2025/governor-ron-desan... [2]: https://www.floridapeninsula.com/blog/florida-legislation-helping-to-reduce-runaway-home-insurance-premium-costs https://www.floridapeninsula.com/blog/florida-legislation-he...
  - toomuchtodo 2y ago
    They want the socialism benefits wrapped in populist authoritarianism to appease their tribal and in group belief system. “The only moral benefits are my benefits.” With Florida climate risk accelerating, the new admin telling states FEMA is unnecessary, and ~15-20% of Florida homeowners going without property insurance due to cost, this will manifest in an unfortunate but entirely expected outcome: catastrophic economic loss at some point in the future with no recourse for the majority impacted (citizen homeowners and GSE investors alike).

dsr_ 2y ago

Sounds exactly like fraud.

s1mplicissimus 2y ago

The logical outcome of shareholder driven economy. Reminds me of a youtube quote: "Sell the houses to whom, Ben? Aquaman?"

wheelerwj 2y ago

Florida Insurers were running a Ponzi scheme, got it.

toomuchtodo 2y ago
Still are. https://news.ycombinator.com/item?id=42450680 https://news.ycombinator.com/item?id=42450680 https://news.ycombinator.com/item?id=41664750 https://news.ycombinator.com/item?id=41664750
- whimsicalism 2y ago
  again, government at fault. it is beyond stupid that GSE mortgage backstops even exist in the first place

emorning3 2y ago

BUT BUT BUT Floridians voted for DeSantis, so its all good. So now he's busy protecting insurers from being sued. So nothing to see here. Just the government that you voted for collecting their bribes and protecting their friends. Floridians are gonna get exactly what they deserve from the new administration.

jffry 2y ago
DeSantis received 4.61 million votes [1] from a population of 23.37 million [2]. 3.15 million voters voted for a candidate other than DeSantis [1] [1] https://en.wikipedia.org/wiki/Electoral_history_of_Ron_DeSantis#2022 https://en.wikipedia.org/wiki/Electoral_history_of_Ron_DeSan... [2] https://en.wikipedia.org/wiki/Florida https://en.wikipedia.org/wiki/Florida
- speff 2y ago
  14.5m eligible voters[0] - but your point still stands there. Though I'm of the opinion that non-voters implicitly voted for whoever won. So 11.35m hypothetical people voted for DeSantis in my mind. [0]: https://dos.fl.gov/elections/data-statistics/voter-registration-statistics/voter-registration-reports/voter-registration-by-party-affiliation/ https://dos.fl.gov/elections/data-statistics/voter-registrat...
- emorning3 2y ago
  PS: Not voting is voting. No real American has the right to sit on the sidelines anymore.
- bilbo0s 2y ago
  And that's how democracy works. If you didn't vote? Well, your fault. The beauty of the election is that it means right now in Florida you have exactly the government you want and deserve.
  - deleted 2y ago
    [deleted]
- 2y ago

wonderwonder 2y ago

What's interesting is the entire thing is a game. I live in Florida. Had a roofer come by a couple years ago saying that a storm had come through a few months ago and there had been hail. So if he goes up on my roof and is able to find proof of hail damage I get a new roof for free. I needed a new roof at the time so while I generally look poorly on solicitation, I told him go ahead. A month later I had a brand new roof that cost me $1,000 out of pocket instead of $25,000. These guys must have done 10 roofs within a few streets of my house. So while the 250k is not a lot for an insurance company to eat, I am sure when that is multiplied by 1000's over the state, it gets expensive. With that said, I also had a flood (10 inches of standing water) during a storm and my flood insurance company denied my claim because my sunken living room was considered a basement (2 steps down from the main floor). Turned into an indoor pool. So that was a nice $50k I had to spend out of pocket. I even paid separately for flood insurance as my hoi does not cover flooding. So total waste of money on that. The entire thing is a circle of people scamming each other.

jbs789 2y ago
The roof stuff drives up prices massively. The MGA stuff is just the tool/response for the insurer to manage the downside for things like the roof nonsense - if they can pocket the fee when they write the deal then if there’s a subsequent rush of claims (some roofer, in some area, following some storm, which inflates claim costs), then the loss is capped at the equity they have in the insurance carrier.
bashmelek 2y ago
My thoughts exactly. I live in Florida, and have for 30 years. I’ve never personally used my insurance, and my parents had to use theirs once when the neighbor’s tree randomly fell in our yard, and they also had their insurance pay for most of their roof-a lot of people do. I paid for my own roof fully out of pocket. If you are near water or below ground then there is a near certain risk of flood, and I realize I subsidize those areas while I chose to stay away from water. But the entire national conversation is focused on saying that climate change has doomed Florida
selimthegrim 2y ago

game_the0ry 2y ago

Companies and their executives need to be held accountable of this will never stop. No more bail outs and implement clawbacks.

emorning3 2y ago
What the insurers are doing is all legal, what do you propose exactly? Do you think that the current administration is going to 'hold executives accountable'? Trump could literally drive over to your house and shoot you in the head for even suggesting such a thing.

maxerickson 2y ago

I wonder how those rates of return compare to say Georgia and Wyoming. (A state you'd expect to have reasonably similar risk and one where you'd not necessarily expect it to be similar)

bilbo0s 2y ago
Average elevation in Georgia: 600ft Average elevation in Florida: 100ft Georgia coastline: 100 mi non-NOAA Florida coastline: 1350 mi non-NOAA Even when cheating with non-NOAA numbers, Georgia is nowhere near comparable to Florida. Most of the people in your pools in Georgia are not on the coasts, and live at non-dangerous elevations. Whereas in Florida, nearly all of the people in your pools live on the coasts, and at extremely dangerous elevations.
- dmoy 2y ago
  For anyone else momentarily confused like me: risk pools (which is evidently a term of art in insurance: https://en.m.wikipedia.org/wiki/Risk_pool https://en.m.wikipedia.org/wiki/Risk_pool) Not swimming pools, which was my first read of above comment, at which point I thought, "well obviously I got something wrong there, time to look at Wikipedia"
  - bilbo0s 2y ago
    Sorry. I should have been more clear. Yes. Risk pools. What I was trying to illustrate is that the fundamental model of sharing risk can work in a place like Georgia, whereas in a place like Florida it doesn't.
- maxerickson 2y ago
  Okay, pick whatever state, but the interesting thing is looking at the rate the industry is pulling out profits at. Are the Florida affiliates 10 times more profitable or 100? And so on.

whimsicalism 2y ago

Sorry but a 4.5% profit cap in a state like Florida is ridiculously low. The problems with insurance are usually state-caused.

napierzaza 2y ago

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iask 2y ago

I think the elephant in the room is fraudulent claims. Majority of the claims filed is related to over-priced contractors. Pick any city, pick any house - old, new, big, small, tiny - the average roof replacement is 4x-5x the cost! I know of multiple cases where the adjusters send in claims that are 50% to 90% of the actual repair cost. This is the REAL problem. Not hurricanes. It’s the fucking fraud. I think the only option to combat this is to give home owners the right to fix things like roof themselves…why do I need a city permit, why do I need a fraudulent contractor permitted ONLY by the city (I don’t want the city looking out for me…that’s always their BS argument…leave that to me). I should be able to shop the supplies myself. Here’s another exercise - pick any city in FL - try to buy roofing materials yourself. The point is - Fraud is the biggest problem with homeowners insurance in the state of FL.

quickthrowman 2y ago
> why do I need a city permit, why do I need a fraudulent contractor permitted ONLY by the city (I don’t want the city looking out for me…that’s always their BS argument…leave that to me). I should be able to shop the supplies myself. You are not the only person that will own the house you live in, that’s essentially what permits and regulations are for, to ensure the next owner isn’t saddled with a stupid decision made by the previous homeowner. Roof inspections are particularly important in places with snow load or hurricane force winds. Roof claims are prorated, if your previous roof was rated for 30 years and installed 15 years ago, you get half of the replacement cost paid. If you don’t like it you can pay off your house and self-insure your residence. If you don’t like cities, go buy land and build a house in an unincorporated area, there are places that completely lack any local building code enforcement.
- iask 2y ago
  You are not the only person that will own the house you live in, that’s essentially what permits and regulations are for, to ensure the next owner isn’t saddled with a stupid decision made by the previous homeowner. Roof inspections are particularly important in places with snow load or hurricane force winds. That’s what home inspectors are for at the time of purchase. And even if I choose to replace the roof myself - the city is free to inspect according to their ordinances. What I disagree with is that you MUST use their approved contractors. And the prorated nonsense is simply mathematical fraud.

cm2187 2y ago

Not sure I agree with the article. 1) Making a loss doesn't prevent you from paying a dividend. Dividends aren't paid from the current year's profit, but from retained earnings, i.e. from accumulated profits since the creation of the company. It is frequent for companies to maintain their dividend policy through cycles. 2) The insurer doesn't have to make a loss overall to make a claim that the rates charged on some specific part of their portfolio do not cover expected losses on that portfolio, since circumstances have changed. In theory insurance rates must be sufficient to cover expected losses, and I am pretty sure financial regulations require insurers to do so (prudential rules/solvency, though I do not work for an insurance company so not an expert). So it is one thing to call the insurers claims bullshit, and maybe it is. But 1) they paid a dividend or 2) the company did not make a loss for the year, aren't valid arguments.

loeg 2y ago

Worth understanding this whole argument applies only to local Florida-only insurers; the big national entities don't operate like this and also found Florida too expensive to operate in prior to the 2023 tort/insurance reforms. > So executives create sister companies that charge the insurance company for basic services, such as claims handling, underwriting, accounting and issuing policies. (Large national insurers typically handle all of those services internally.)

cptskippy 2y ago
This practice is pretty common in auto insurance. The company you wrote your policy with is usually broker and your ID car will list the actual Insurance Company. If you go through an independent agent you'll encounter 3 layers of abstraction where the agent writes business for multiple brokers who manage books of business for different insurance companies.

serjester 2y ago

For some background, Florida is an incredibly challenging insurance market. In 2020, the state accounted for 85% of insurance litigation despite making up only about 10% of total premiums in the US. That combined with sky rocketing reinsurance costs, has driven tons of reputable carriers out of the state. They dodged a bullet with Milton - many of the remaining carriers are one big hurricane away from insolvency.

cptskippy 2y ago
~20 years ago when I worked for an auto insurance broker, we opened a program in Florida and it was very challenging. I'm trying to remember the specifics but the regulations were such that you couldn't collect more than like 15 days of premium in the down payment and you were required to cover that policy for the first 30 days. So there was always something like a 15 day gap. This meant policies were cancelling after the first month and rewriting. They didn't have electronic approvals at this time so you couldn't implement any sort of real-time checks either. If your producer wrote a policy, you were on the hook for it. I think we introduced some by-fax validation process to mitigate this. Another common practice for people who need insurance to register vehicle but had no intention of carrying insurance was to write bad checks. If the person was approved they'd basically have 30 days of coverage for free. If they had an accident they could pay the premium, if they didn't then they could let the policy lapse. There was also something weird about the uninsured and underinsured coverage, I can't remember specifics but I think it was that the coverage was required due to the high number of people who drove uninsured but we couldn't charge for it? I can't recall exactly. The regulations were such that it made it very hard to make money and I think we backed out of the market after 12-18 months.
- howard941 2y ago
  Uninsured/underinsured is not required in Florida. It's good to have because it's the only coverage that actually benefits the insured - but it's not required. And it's not cheap.

unicredit 2y ago

[flagged]

blackeyeblitzar 2y ago

I am surprised most of this discussion doesn’t touch on the affiliates issue, and it makes me think people aren’t reading the article. The summary is that many of these insurance companies are creating shell companies that provide services to the main insurance company, and charge a lot for those things. So the profit of the insurance company remains low and meets regulations, while all of the ‘real’ profit is hidden in these affiliated companies. Maybe that is technically legal but it certainly does not seem to be what the law intended. It also seems suspicious that this report was not disclosed to the public, and that it took so long to respond to information requests. And it also seems odd that neither the insurance commissioner nor Governor De Santis have acknowledged these issues.

cudgy 2y ago

The actual report with the findings had the following interesting statement at the bottom of page 3. Seems convenient to claim fraud as a trade secret, which apparently prevents this report from exposing those companies. “A number of the documents utilized were filed with the Office by an insurer as a “Trade Secret”. As such, information regarding any of the individual companies discussed in the Appendixes to this report may not be released without approval of the Director.” https://www.documentcloud.org/documents/25540452-affiliated-fee-analysis-executive-summary/ https://www.documentcloud.org/documents/25540452-affiliated-...