Florida's insurance regulator has fined eight insurers a combined $2.08 million for mishandling claims tied to hurricanes Ian and Idalia.

The Office of Insurance Regulation (OIR) said targeted market conduct examinations revealed widespread compliance failures, including the use of improperty appointed adjusters, late acknowledgment of claims, missing disclosure statements and violations of the state's 90-day deadline for paying or denying claims.

Insurance Commissioner Mike Yaworsky (pictured above) said legislative reforms enacted over the past two years have given regulators more authority to enforce compliance, describing the fines as part of efforts to stabilize a market where consumer trust remains fragile.

High error rates in claims handling

Examiners reported significant deficiencies in some insurers' claims practices. One carrier showed error rates above 60% for Hurricane Ian and more than 80% for Idalia, according to a report from BestWire.

American Coastal Insurance Co., American Mobile Insurance Exchange and Clear Blue Insurance Co. received the largest penalties at $400,000 each. Monarch National Insurance was fined $325,000; Tower Hill Prime Insurance Co., $250,000; TypTap Insurance Co., $150,000; Centauri Specialty Insurance Co., $100,000; and Sutton National Insurance Co., $50,000.

Regulators cited American Coastal for errors in up to 22.2% of Ian claims, including failures to list adjuster licence numbers in correspondence. American Mobile's error rates reached 81.2% in Idalia claims, with examiners finding 69 of 85 reviewed claims failed to meet disclosure requirements. Clear Blue recorded error rates of up to 37.7% for using improperly appointed adjusters.

According to the report, two additional examinations are still pending.

Profitability outlook for Florida carriers

The fines arrive at a critical time for Florida's property insurers. Consecutive major storms triggered thousands of claims and piled pressure on carriers already burdened by high reinsurance costs and years of litigation expense.

While recent reforms have curbed assignment-of-benefits lawsuits and expanded Citizens Property Insurance Corp. depopulation efforts, analysts warned that profitability for Florida carriers remains fragile. Many insurers have pushed through steep rate increases and tightened underwriting, yet capital adequacy is still tied closely to reinsurance availability and pricing.

Regulatory enforcement adds another layer of pressure. Analysts said that while OIR’s tougher stance on compliance is designed to protect policyholders, it also highlighted the operational risks insurers face as they balance rapid claims processing with accuracy under catastrophic conditions.

The state’s largest homeowners' multiperil writers in 2024 were Citizens Property Insurance Corp., holding nearly 15% of the market, followed by Universal Insurance Holdings Group, State Farm Group, Florida Peninsula Group and Slide Insurance Group, according to BestLink data.

NEWS PAGE

HOME