Agent sounds warning over rising insurance rates

Michael Mailliard sees rising property insurance rates as the biggest crisis facing Florida right now.

The owner of the Longboat Key-based MIC Insurance said he is considering visiting the Capitol in Tallahassee this legislative session to let state lawmakers know about his concerns.

“We are jeopardizing our future growth in the state of Florida,” Mailliard said. “We could put a halt to our real estate market.

“I mean what good is having a coastal home if you can’t sell it because nobody can buy the insurance?”

Mailliard addressed his concerns on last week to members of the Kiwanis Club of Longboat Key at the Lazy Lobster. He made a similar presentation in February to a gathering of the Federation of Longboat Key Condominiums and has appeared before the Town Commission this year as well.

“This is cities, communities, the whole state,” Mailliard said. “Financially, this is a risk that we’re accepting.”

Mailliard thinks the problem is twofold.

• The expense of insurance-claim lawsuits.
• Whether state lawmakers will pass Senate Bill 76, which would mandate specific requirements for anyone acting as an insurance claims adjuster.

A Senate committee was due to review SB 76 earlier this month, but amendments to the bill prompted its consideration to get postponed.

Mailliard said that during the last five years, insurance companies in Florida have paid about $15 billion to cover damages and legal fees in the damage-claim lawsuits. He said 92% of the money went to attorneys while 8% went to clients to repair damage.

Your property insurance rates for 2021 have risen anywhere from 20% to 50% over 2020. 

It’s no secret Florida is prone to tropical storms and hurricanes. Because of this, Mailliard said the state is subject to different rules and regulations for insurance compared to other states. It’s also compounded by people’s propensity in Florida to settle claims via litigation.

Mailliard said the losses incurred by Florida-admitted insurers will be between $1.25 billion and $1.5 billion in 2020 after years of profitability. 

One of the main components of the insurance crisis involve roof replacements. It's not uncommon for contractors to go door to door in neighborhoods of older homes, looking for roofs that appear close to the end of their service life. By connecting effects of a small leak to a recent weather event, contractors often aim for an insurance-financed roof replacement when a repair is really more appropriate. 

“It’s facing the state of Florida beyond anything else. This is the big issue,” Mailliard said. “People don’t give a s**t about insurance companies. I get that.

“But without us, we can’t run anything. This world will stop, and all these high home values are going to go flying out the window because nobody can afford to move here.”

Many carriers are becoming more selective on which insurance they provide to carriers because of the rising costs. For example, Mailliard said many insurers are no longer offering homeowners insurance now years after the industry's biggest company's left the state.

“[Some insurers] have a losing product in their books, and they don’t want more,” Mailliard said.

Here are two other examples Mailliard discussed:

• Insurers that provide wind insurance now exclude horizontal rain from their coverage.
• Insurers that exclude internal water leaks on older homes and condos from their coverage.

Mailliard said the most common claim MIC Insurance pays for is internal water leaks.