Florida’s P&C Insurance Market Potentially Spiraling Towards Collapse – Forensic Meteorology Can Help

“Florida’s Property Insurance Market Is ‘Spiraling Towards Collapse’ Due to Litigation” according to the Insurance Journal, citing an analysis of Florida’s property and casualty insurance market that will soon be presented to the Florida Legislature. While the legislature appears poised to take up this issue, Florida insurers can use the capabilities of forensic meteorology to more quickly and decisively resolve disputed claims.

The report, “Florida’s P&C Insurance Market: Spiraling Towards Collapse”, highlights the significant financial burden of litigation on the insurance industry in Florida, which has resulted from the confluence of legislation passed over the past decade within an environment of consistently high exposure to natural catastrophe risks. Beyond the obvious and substantial hurricane risks that have been realized to devastating effect over the last several years, Florida is also vulnerable to thunderstorm-related wind and hail damage all 12 months of the year.

According to the report authored by Guy Fraker, who has more than 30 years experience in the insurance industry:

  •  Litigation costs are 17% higher in Florida than in other states similarly prone to catastrophes
  • Fees paid to attorneys are 7.5 times higher than the damages paid to the insureds in Florida
  • 60% of litigated claims in Florida are unrelated to catastrophes
  • Approximately 6% of homeowners claims are being litigated, with associated costs similar to a Category 3 hurricane
  • The problems in Florida’s insurance market are beginning to impact the ability of insurers to get reinsurance capital

Fraker concludes that unless Florida’s property insurance market is reformed – primarily through regulatory and legislative changes – the market could become increasingly unstable to the point of collapse.

The good news is that the changes Fraker proposes are concrete and appear to be a priority to at least some members of the Florida legislature. However, the legislative process is rarely quick, so in the meantime, Florida insurers will have to implement strategies on their own to reduce the burden of litigation.

Forensic meteorology can be a powerful component of that strategy. Through robust scientific analysis of meteorological data, forensic meteorologists can reconstruct the weather conditions at a given time and location, confirming or disputing the presence of weather conditions capable of causing the observed or claimed damage. 

A forensic meteorological analysis can compare wind speeds during a hurricane to those generated by a recent thunderstorm to determine the date of loss and whether the hurricane deductible is applicable. It can analyze hail potential at a given property over a 10-year period to determine whether damaging hail likely occurred during, before, or after the policy period. It can analyze hail size and wind speed on the claimed date of loss to determine whether weather conditions at the insured property were severe enough to cause damage.

The tools of forensic meteorology can be used to answer most weather-related questions that arise during the claims process, and perhaps most importantly, a robust forensic meteorological analysis produced early in that process can settle a dispute before it advances to costly litigation.

Blue Skies Meteorological Services works closely with insurers, independent adjusters, engineers, and legal council in Florida and across the United States. To request a free consultation to discuss how we might assist with your weather-related matter, please give us a call or send an email to:

 

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