Study uncovers 'smoking gun' evidence of insurance execs' shocking behavior after catastrophe: 'It's fraud'

Evidence has surfaced that Florida insurance companies claimed monetary losses while redirecting billions of dollars to investors and affiliates. 

A study revealed that Florida-based insurers' executives took exorbitant amounts of money from their companies following Hurricanes Irma and Michael. 

What's happening?

As the Tampa Bay Times reported, the 2022 study has only recently been released after a two-year public record wait. 

The study explained how, during Florida's insurance market's post-hurricane crisis, company leaders distributed $680 million to shareholders and diverted billions of dollars to affiliate companies. 

With this money diverted and insufficient funds to pay insurance claims, Florida fell even deeper into an insurance meltdown. 

Doug Quinn, executive director of the watchdog American Policyholder Association, referred to the findings as a "smoking gun."

"These companies are crying poverty in order to raise premiums or justify insolvency: 'It's litigation, it's fraud,'" Quinn said. "This is money shifting from their left pocket to the right, and crying poverty while their right pocket bulges."

Why is insurance corruption significant?

This news from Florida is concerning because it affects homeowners insurance coverage and costs during extreme weather events. 

Human activities like burning dirty fuel for energy create more planet-overheating pollution and extreme weather events, which put coastal communities at heightened risks. These worsening weather trends are prompting insurance companies to drop their coverage, leaving homeowners scrambling to rebuild their lives with few resources or options. 

It's disturbing to think about the wealthy few profiting from insurance companies while citizens' lives are devastated by intense storms. Unfortunately, Florida isn't the only place where homeowners insurance is a major issue. 

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Insurance companies have tried to cancel coverage for people in high-risk wildfire areas in California and other states. Even families that can get coverage face extremely high premiums and are worried about paying for repairs after storm damage. 

What's being done to hold insurance companies accountable?

To address the insurance issue in Florida, regulators asked lawmakers to establish clearly defined definitions of fair and reasonable dividends. After discovering unjustifiable fees and payments, regulators modified and canceled some companies' agreements. 

As an individual, something you can do to protect yourself from increasingly strong storms is to routinely inspect your home for damage and address potential issues before they become major claims. You can replace outdated building materials with upgraded materials like a fire-resistant roof and impact-resistant windows. 

Regularly review your claims history and coverage levels, shopping around for the best rates and comparing quotes from insurance providers in your area. Another idea is to contact your pro-climate representatives to advocate for homeowner insurance market reforms and disaster mitigation programs where you live. 

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