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As working- and middle-class Floridians struggle to afford housing and insurance and rebuild after disasters, the DeSantis administration is further pouring freebies and appointments on the insurance industry while placing much of the blame for the state’s growing crisis on their customers. Report A report released last year by the American Federation of Teachers, Hedge Clippers, Florida Rising and the Center for Popular Democracy found that insurance industry donors gave $3.9 million to DeSantis and his political action committee, Friends of Ron DeSantis, between 2018 and 2022. The report noted that those contributions included “more than $150,000 in a single day from dozens of State Farm agents.” “Including their contributions to the Florida Republican Party since January 1, 2019, days before DeSantis was sworn in, campaign funds from the insurance industry have surged to more than $9.9 million,” the report added.
Problems in Florida’s insurance market have reached new heights during DeSantis’ tenure, but they are nothing new. Major insurers began fleeing the state after Hurricane Andrew in 1992, when many competitors went bankrupt during the storm. Historical lossesThe 2017 and 2022 storm seasons were disastrous, with more than a dozen companies affected, e.g. Farmers InsuranceIn their place — encouraged by generous state incentives — smaller and sometimes more shady insurers have emerged, often concentrated in Florida and heavily reliant on reinsurance, which itself is becoming increasingly expensive. Complex and SpeculationThe state’s population also continues to grow, including in the risky luxury areas of South Florida’s coast. That means more properties are exposed to increasingly severe losses that insurers may not be equipped to protect against, leading to a higher concentration of risk.
Between 2021 and 2022, seven Property and Casualty Insurance Company bankruptcy in Florida, leaving policyholders with unpaid claims, little recourse and huge bills. The bankruptcies may be somewhat surprising because all of them were rated “A” by an Ohio company called Demotech Inc. Demotech Inc is a ratings agency designed to replace Standard & Poor’s and A.M. Best, which often refused to rate emerging insurance companies in Florida.
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