Major Florida homeowners insurance firm fined $1M for actions after Hurricane Ian
TALLAHASSEE
Florida regulators issued a $1 million fine against one of the state’s largest homeowners insurance companies on Thursday over how it treated policyholders after Hurricane Ian.
Tampa-based Heritage Insurance was slow to respond to claims, slow to pay claims, used improperly licensed adjusters and kept poor records, the Florida Office of Insurance Regulation found.
The company, which has nearly 150,000 policies in Florida, has agreed to pay the fine.
Regulators’ findings confirm what many Floridians say they experienced after Ian struck Southwest Florida as a Category 4 storm in September 2022.
Taking a random sample of a few hundred of the company’s Ian claims, examiners found numerous violations of state laws:
In 21.6% of the cases, Heritage didn’t pay or deny claims within 90 days.
In 30.3% of the cases, Heritage did not acknowledge it had received communication about a claim from the policyholder within 14 days.
In 42.9% of the cases, Heritage did not ensure that its adjusters provided policyholders with the adjusters’ names and license numbers.
In 4% of the cases, Heritage used adjusters who were not properly licensed.
In all, regulators found the company violated nine different state insurance codes. Heritage also violated one of its internal policies, failing 57.4% of the time to initiate voice
to-voice contact with the policyholder within one business day of receiving a claim, regulators found.
In a statement, Heritage CEO Ernie Garateix said the company had also noticed the issues internally. He said the company has since taken actions including creating a new governance and compliance director position and implementing new claims management software.
“Our message to our policyholders is simple: We are committed to excellence and will never stop striving to improve,” Garateix said.
Heritage has been a political presence in Florida since its founding in 2013 by then-CEO Bruce Lucas. The company got started with the help of up to $52 million given to it to take policies out of state-run Citizens Property Insurance, a decision that came after it donated $110,000 to then-Gov. Rick Scott. The company was also a sponsor of Gov. Ron DeSantis’ reelection inauguration.
Heritage’s parent company has donated at least $2.3 million to Florida politicians and political committees since 2010, state records show.
The fine is one of the largest against an insurance company in Florida’s history. In 2013, regulators fined Fort Lauderdale-based Universal Property and Casualty Insurance Co. nearly $1.3 million for wrongfully denying claims and making outsize profits at its affiliate companies.
RESPONSE TO THE FINE FROM STATE OFFICIALS WAS MUTED
Chief Financial Officer Jimmy Patronis, one of the state’s two insurance regulators, hosted a roundtable called “Putting Policyholders
First” in Coral Gables on Thursday but didn’t mention the fine or Heritage’s behavior. Patronis does not oversee the Office of Insurance Regulation, which levied the fine.
When asked for comment, Patronis spokesperson Devin Galetta didn’t address Heritage’s behavior, instead appearing critical that the company was fined.
“Rather than sending more cash to state coffers, if there are more of these types of penalties, the CFO is interested in exploring legislative solutions where money goes back to policyholders through additional rate relief,” Galetta said.
Patronis, state lawmakers and the industry have repeatedly blamed “frivolous” lawsuits by policyholders for causing Floridians’ insurance crisis.
Lawmakers and Gov. Ron DeSantis’ primary response to the crisis has been to make it harder to sue insurers, an action that former President Donald Trump called a “bailout” for the industry.
Florida officials have never studied how many of those lawsuits were triggered by insurers’ poor behavior.
Heritage was one of the companies accused by some of its adjusters of manipulating reports to pay policyholders less on claims, according to The Washington Post. That allegation is not addressed in state regulators’ report.
“This is what people like me, consumer advocates, have been trying to get across to legislators for years,” said Rep. Hillary Cassel, D-Dania Beach, an attorney who used to work for insurance companies but now represents policyholders.
“This is their behavior, this is their pattern and practice, this is their business model,” Cassell said. “To treat consumers poorly and to not help them in their greatest time of need, despite paying the highest homeowners insurance premiums in the nation.”