Florida’s Insurance Quagmire A Tale of Profits, Pitfalls, and the Perils Faced by Homeowners

Florida’s insurance landscape has been a battleground, with tech-insurance start-up Slide taking center stage. In a recent podcast, founder Bruce Lucas revealed the simplicity of starting an insurance company in Florida, sparking concerns about the state’s takeout system.

Established about 30 years ago, the takeout system allows insurers like Slide to assume thousands of policies and millions in premiums, cherry-picking the most favorable ones. While it has catapulted Lucas to success, an investigation by The Washington Post unveils a dark side: residents paying exorbitant prices for insurance and facing prolonged claims handling, particularly after disasters like Hurricane Ian.

The takeout program, designed to reduce the exposure of the state-run Citizens Property Insurance Corp., has seen over half of the participating carriers going insolvent over the past two decades. As climate-fueled hurricanes intensify, there are concerns that Citizens, with a massive financial exposure of about half a trillion dollars, might require a federal bailout.

Florida’s insurance market, according to National Association of Insurance Commissioners (NAIC) data, ranks as one of the worst in the nation for homeowners. Unpaid claims, unprocessed claims, and policy non-renewals have become commonplace, exacerbating the challenges faced by residents.

Enter Slide, created by Lucas in response to Florida’s growing insurance crisis. Despite claims of bringing stability and solvency to the market, critics argue that Slide, like many before it, may contribute to the ongoing issues rather than offering a lasting solution.

Lucas attributes Slide’s success to recent pro-insurer legislation, emphasizing the need for substantial capital to instill confidence in the market. However, the legislation, which curtails homeowner lawsuits, has its detractors who argue it favors executives at the expense of policyholders.

Slide’s rapid rise, acquiring policies from failed insurers at an unprecedented rate, has raised eyebrows. Lucas’s political affiliations and significant donations to key Republicans, especially those supporting the controversial legislation, have also stirred controversy.

Homeowners caught in the shuffle, like the Jonases, share harrowing tales of skyrocketing premiums, unresolved claims, and the emotional toll of the state’s insurance chaos. Slide’s high renewal rates, coupled with legislative changes, leave many questioning the viability of Florida as a place to call home.

The future of Florida’s insurance market remains uncertain, with citizens, insurers, and lawmakers grappling with a system that appears to enrich a few while leaving many vulnerable and financially strained. As Slide continues its ascent, the question lingers: will it bring the promised stability or add to the woes of an already beleaguered insurance landscape?