Florida insurer fined $1 million over damage from Hurricane Ian

According to the Office of Insurance Regulation, Hurricane Ian has cost insurance companies more than $21 billion as of April 22, 2024. Now one of Florida's largest insurers will increase its total by $1 million.

The OIR imposed a seven-figure fine on Heritage Property and Casualty Insurance Company for violating a number of Florida laws in handling some of its claims related to Hurricane Ian.

“Insurance companies are financial first responders to disasters,” said Mark Friedlander of the Insurance Information Institute. “Their promise is to take care of policyholders in times of loss. Based on the Florida Office of Insurance Regulation’s investigation, Heritage failed to live up to its promise to policyholders.”

Drone image after Hurricane Ian, CREDIT: WINK News

OIR's seven-page Targeted Market Behavior Review report explains why Heritage needs to spend so much money. From April 11, 2023 to March 11, 2024, the OIR examined three different samples of the Company's Hurricane Ian claims filed between the day Ian struck Southwest Florida and February 28, 2023. It found that the insurer:

  • Claims not recognized within 14 days (this law was later changed to 7 days);
  • did not provide the policyholder with a document containing the name and license number of the adjuster;
  • failed to provide the adjuster's name and license number in a subsequent notice regarding the claim;
  • has not paid or rejected a claim or part of the claim within 90 days (this law was later changed to 60 days);
  • has not calculated the correct amount of interest owed in settlement of a claim;
  • did not pay interest when the claim payment was made 90 days after a claim was filed;
  • failed to provide a homeowner's claim card to a policyholder within 14 days of the first notice of loss;
  • did not keep complete claims records and;
  • used adjusters that were not properly licensed.

Friedlander said this investigation report and fine send a clear message to insurers and policyholders.

“Insurers will be held accountable and policyholders will be supported by the Office of Insurance Regulation,” Friedlander added.

Florida Insurance Commissioner Michael Yaworksy

Heritage CEO Ernie Garateix said in a statement to the Florida News Service that the company has “fully complied” with the government's review, known as a market conduct review.

“We have also informed OIR that many of the concerns they identified were also reported internally, and we have already taken significant action to address these concerns and provide better service to our policyholders,” Garateix said.

The statement detailed a number of changes made at the company. For example, Heritage created the position of “governance and compliance director” to ensure compliance with eligibility requirements. Other examples include new claims management software and changes to ensure claims adjusters are compliant.

“Our message to our policyholders is simple: We are committed to excellence and will never stop improving,” Garateix said in the statement.

Florida Insurance Commissioner Michael Yaworsky signed the order on Thursday, May 9th.

“The regulator is serious and they’re not just talking,” Friedlander said. “They are taking action and when they said they would investigate the situation, they did.”

The order stated that Heritage agreed to pay the fine and must pay it within 10 days. WINK News consumer reporter Andryanna Sheppard asked the OIR where the $1 million should go. A spokesman is checking the matter.

The last time OIR fined Universal Property and Casualty Insurance Company up to $1 million was in 2013 for $1.26 million.

Related: Homeowner's insurance company sues dozens of Southwest Florida residents

Florida News Service contributed to this report.

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Anna Harden

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