Regulators are watching Florida property insurers’ behavior during Idalia, DeSantis says

After some Florida insurance companies were accused of shortchanging customers’ claims after Hurricane Ian last year, Gov. Ron DeSantis and state regulators are warning insurance companies to make whole homeowners who experience damage from Hurricane Idalia.

“We’re gonna be watching,” DeSantis said Monday night. “We want to make people whole who pay for this service. And I think that they deserve to have their claims honored.”

On Monday, the state’s Office of Insurance Regulation sent a memo to the industry, reminding companies of a new law passed by the Legislature this spring to improve how insurers handle claims — and the increased penalties for violating them. The law required insurers to adopt “best practices” when handling claims, even after a hurricane.

Read More: Florida braces for Hurricane Idalia. 125 mph winds, 15-foot storm surge expected

“Policyholders have the right to expect prompt, efficient, and fair claims adjustment service, especially after a catastrophic loss,” the office’s memo to insurers states. “(The office’s) primary concern is that consumers’ issues are properly and timely resolved.”

After Hurricane Ian battered Southwest Florida last year, at least seven adjusters working for insurance companies came forward saying the insurers manipulated their reports to pay homeowners less than what the adjuster had estimated, which is illegal under Florida law. Four gave sworn testimony in civil cases, producing documents and copies of text messages from insurers ordering them to deny or reduce claims.

Florida Chief Financial Officer Jimmy Patronis, whose office is investigating those claims after initially dismissing them, is advising homeowners to take a video of the inside and outside of their home before Idalia strikes.

“If you’re affected by this storm, it’s going to give you a cut and dry example of what your house looks like before the storm and now what it looks like after the storm,” Patronis said in a video posted to X, formerly known as Twitter. “You’ll have that to take to your insurance company in order to have a cut-and-dry claim process.”

Idalia is expected to be a Category 3 storm when it makes landfall in Florida’s Big Bend region Wednesday morning.

Floridians are already paying the highest homeowners insurance rates in the nation, and rates are expected to keep rising despite numerous laws passed by state lawmakers in recent years. Those reforms have largely focused on making it harder for consumers to sue their insurance companies.

There are some signs the market is stabilizing. Last week, state regulators approved two new insurance companies to be added to Florida’s market.

The industry is in better shape than it was a year ago, thanks to lawmakers’ changes, said Mark Friedlander, Florida spokesperson for the industry-backed Insurance Information Institute.

Every company was able to buy reinsurance — insurance that insurers buy to pay storm claims — ahead of this year’s hurricane season. But a storm this early in the hurricane season will likely lead to higher reinsurance rates next year, which are passed on to customers.

“A market that has been in such turmoil for so many years, this is another negative impact,” Friedlander said Tuesday.