Florida’s chief financial officer has announced the activation of two new property insurance investigation units in Central Florida to combat fraud in an industry that has been rocked by expensive litigated claims and plunging profits.
Jimmy Patronis said this month that the new teams funded by the state legislature will work with other law enforcement personnel to crack down on parties such as roofers, contractors and attorneys who try to swindle insurance companies.
“The new squads are composed of 13 total personnel, including 10 sworn law enforcement detectives, and are boots on the ground right now in Tampa and Orlando working with our federal, state and local partners to investigate property insurance fraud,” Patronis said in a prepared statement. “While based in Central Florida, these squads have the authority to investigate significant cases throughout the state.”
Kyle Ulrich, president of the Florida Association of Insurance Agents, welcomed the additional focus on curbing fraud that ultimately puts upward pressure on property insurance rates.
“The insurance industry has long advocated for additional resources to be allocated by the state to try to fight insurance fraud,” Ulrich told the Florida Record. “... (But) it probably doesn’t have an impact on rate and availability in the short term.”
Though he noted that the chief financial officer’s resources are limited, the growing awareness that the state is taking action to deal with property insurance problems could help deter unscrupulous actors from engaging in such activities, he said.
“Between what the legislature did on attorney fee reform in 2021 and the heightened awareness in the state will hopefully deter some of that activity,” Ulrich said.
Financial woes within the property insurance industry have also been highlighted by Mark Wilson, the Florida Chamber of Commerce’s president and CEO, who recently authored an op-ed noting that only a few of Florida’s 52 private insurers made a profit in 2020. Losses for the industry in Florida last year topped $828 million, according to Wilson.
Litigation also plays a significant role in the finances of property insurers. While Florida homeowners’ claims represent only 8.2% of such claims filed nationwide, the state generated more than three-quarters of the nation’s property insurance lawsuits, according to an annual study conducted by the National Association of Insurance Commissioners.