There are many sayings about insurance that although humorous, have some basis in truth. Two of the wittiest are, 'It is the only product that both the seller and buyer hope is never actually used," and 'Education is what you get from reading the fine print; experience is what you get from not reading it." The bottom line is that when a Florida homeowner files a claim for some loss associated with his or her home, there is an expectation the claim will be handled expeditiously and payment will be forthcoming. Often, however, this is not the reality.
Many homeowners in Florida hope that a positive announcement about federal funding for hurricane damage may soon be followed by action from their own insurance companies. Hurricane Michael hit the state hard on Oct. 10, 2018, causing billions of dollars in damage to agricultural enterprises, businesses, public facilities and homes. Florida Gov. Ron DeSantis announced that, following a meeting with President Trump, the federal government had extended an offer for full reimbursement of hurricane cleanup costs in Panhandle communities.
The Florida Division of Emergency Management has been ordered by the state's governor to get money quickly to areas impacted by Hurricane Michael. The governor also said that he was going to push federal officials to further reimburse the state for costs related to cleanup efforts. The federal government is expected to reimburse about 75 percent of those costs. However, Florida's governor is going to ask that this figure be increased to 90 percent.
Having been hit by Hurricane Michael, the state of Florida is still reeling from the aftermath of this devastating tragedy. The county hit the hardest was Bay County, which has filed 81,736 claims as of Jan. 4, 2019, causing the state's total losses to reach $4.88 billion. These numbers mark an increase in the county's reporting of the damage: In the previous month, the number of claims was 79,178 with a state total of $4.3 billion.
Having hit Florida, Hurricane Michael has caused damages worth 10$ billion to $12 billion according to insurance analysts. That being said, there have been around 137,000 insurance claims filed so far, totaling $5 billion, $1.5 billion of which was for agricultural land. This is not to mention the human cost, which includes the death of 43 individuals and the evacuation of 375,000 others. As a result, the state of Florida has a long way to go in order to recover from this catastrophe.
Hurricane Michael caused widespread damage throughout the Florida Panhandle in the fall of 2018, so it's no surprise that thousands of insurance claims were filed. However, Florida's Insurance Commissioner is urging insurers in The Sunshine State to close undisputed claims more efficiently. In a memorandum, he reminded property and casualty insurers of a Florida statute that requires them to pay undisputed claims or partial full benefits within 90 days of the date they were first notified of those claims.
The good news for most Florida homeowners with property that was damaged as a result of Hurricane Irma is that more than 90 percent of claims related to this devastating storm have been closed. However, the industry funded Insurance Information Institute reports that there are still thousands of Floridians wrangling with their insurance providers over filed claims related to Irma. One woman with a damaged roof, for instance, had to wait for more than a year to receive a satisfactory claim payment after initially receiving a lower payment that didn't fully cover the repair expenses.
In large part to Hurricane Michael, a projected Florida budget surplus for 2019-2020 is likely going to be reduced or disappear completely. Officials say that storm impacted a part of the state that was already facing economic problems before it hit. Generally speaking, the storm impacted rural areas that had higher rates of poverty. This is in contrast to Hurricane Irma, which hit parts of the state that officials say were likely better able to handle a large recovery effort.
Homeowners in Florida may be facing elevated insurance costs, a change linked to an insurance provision in the state called Assignment of Benefits, or AOB. According to experts, the elevated rates are not linked to increased payouts due to storms, floods or other homeowners' claims. Instead, AOB allows homeowners to transfer the rights to their benefits to a third party. In most cases, this third party such as a roofer or contractor accepts the assignment as payment for work on a damaged home.
With the National Flood Insurance Program scheduled to expire at the end of November, Florida Sen. Marco Rubio has pursued a six-month reauthorization from Congress. Many homeowners in the Sunshine State rely on this program that finances flood insurance in areas prone to flooding. The senator urged his colleagues to vote on the insurance extension bill as soon as possible and spare property owners from uncertainty.