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Watchdogs: Insurers Limited Hurricane Ian payouts

An insurance watchdog group alleges insurers illegally reduced disaster estimates after Hurricane Ian and says it will submit the crime evidence to Fla. law enforcement.

ORLANDO, Fla. – An insurance industry watchdog group says that it will submit to Florida law enforcement evidence of crimes committed by insurance company employees in the aftermath of the devastation caused by Hurricane Ian last year.

The announcement comes after a story in the Washington Post alleged that insurers dramatically reduced adjuster estimates of Hurricane Ian damage in southwest Florida to justify much lower payout amounts to storm victims.

Both the office of state CFO Jimmy Patronis and the Office of Insurance Regulation confirmed that they had opened investigations into the matter but were unable to provide details.

Douglas Quinn, executive director of the nonprofit American Policyholder Association, told the Orlando Sentinel that whistleblowers and internal documents showed “claims were intentionally reduced by 70%-90% from legitimate estimates provided by experienced claims professionals hired by the insurers themselves.”

Quinn said the investigations involve more than one Florida-based regional carrier. The association plans to refer its findings to the Department of Financial Services, district attorneys in affected counties and possibly the Florida Department of Law Enforcement, he said.

“A lack of arrests & prosecution against those in the insurance industry has created a moral hazard in which ethically compromised claims personnel can cheat Florida consumers and be virtually assured of no consequences,” Quinn wrote in an email. “Effective criminal prosecution will act as a deterrent to those who would consider cheating Florida consumers out of an honest claim in the future.”

In one instance, an adjuster who turned in a report showing $200,000 in damage to a home found it changed later, with his name still on it, to only reflect a payout of $27,000, the Post reported.

Mark Friedlander, director of communications for the Insurance Information Institute, who was quoted in the Post story, told the Orlando Sentinel that the alleged actions in the Post story were “clearly not the norm” among insurers following Ian. He said his organization estimates payouts from the storm will total over $60 billion.

“These allegations need to be taken very seriously and thoroughly investigated by state regulators,” Friedlander said.

Last year, Gov. Ron DeSantis and lawmakers held two special legislative sessions to deal with Florida’s property-insurance crisis, resulting in new regulations such as changes to attorney’s fees that make it harder to take insurance companies to court.

But reforms did not provide any direct relief for skyrocketing premiums.

Florida Democrats seized on the Post story. “This is the real ‘Florida Blueprint’ DeSantis doesn’t want the country to see – making it easier for property insurance companies to shift more costs to homeowners,” the party wrote in an email to supporters.

DeSantis’ press secretary, Bryan Griffin, did not respond to the criticism and referred questions to the Office of Insurance Regulation.

OIR did not address the allegations in the Post story directly, but communications director Samantha Bequer said it was conducting investigations into “company claims handling for Hurricane Ian.”

© 2023 Orlando Sentinel. Distributed by Tribune Content Agency, LLC.