TAMPA, Fla. (WFLA) — Homeowners across the state of Florida are looking for relief from soaring property insurance rates – and so are those within the industry.
Joseph Petrelli, the president of Demotech, Inc., controls the financial rating of 60 percent of Florida’s insurance companies. He’s now urging lawmakers to hold not one, but two special sessions to address Florida’s skyrocketing property insurance premiums.
For 26 years, Petrelli has been rating the financial health of insurance companies in our state. He currently rates 42 Florida companies.
He says a group of insurers are on the brink of insolvency due to excess litigation and, ultimately, homeowners will pay the price.
“We’re in constant touch with these companies,” Petrelli said. “We’re particularly concerned about eight or 10 companies, maybe more.”
Investigative reporter Mahsa Saeidi asked if they could be downgraded, and how many policies are involved.
“If we’re looking at – say, eight companies – we’re looking at perhaps 200,000 policies to, incredibly, almost a million policies,” Petrelli said. “People are going to lose their jobs, agents won’t have a market, consumers are going to be scrambling. It’s something we take very seriously.”
So what would happen to the already high rates Floridians are facing?
“At this point in time, the sky’s the limit,” Petrelli explained. “The claims frequency ultimately is what drives the bus and until the claims frequency is brought under control, it’s going to be rate increases as far as you can see.”
Petrelli says he was hoping that there would actually be two special sessions.
“One to put an immediate remedy in place and the other, a more long-term one,” Petrelli said. “If someone does not want to have a special session – what data are they looking at? This is not a can that can be kicked down the road another six months.”
Forecasters are calling for another above-average hurricane season. Petrelli says if there’s a storm, there’ll be hundreds of thousands of claims. Each claim becomes an opportunity for litigation, and that could crush Florida’s market.
“Without reforms, an above-average storm season is just going to create hundreds of thousands of claims that become opportunities for litigation, it’s going to be a nightmare,” he said.
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