The tremendous damage from Hurricane Helene, which took over 200 lives and caused billions in property damage, will see homeowners suffer substantial financial losses as their insurance companies seek to reduce or avoid property damage payments.

Another factor raising the odds of widespread fraud is, simply put, Florida.

Florida is the nation’s fraud capital. Florida Governor Ron Desantis has a cozy relationship with insurers, so the administration has shrugged off consumers’ complaints of insurance fraud, as well as fraud related to identity, Medicare, Medicaid, construction, and consumer fraud.

The fraud in the news will be related to hurricane insurance.  According to a 60 Minutes Report, homeowners will not recover total damage costs. Home insurance companies can significantly reduce damage claims by altering reports and failing to cover storm damage on roofs and other expensive house structures.

A report by the Merlin Law Group found that “Ron DeSantis and the ‘Friends of Ron DeSantis’ political committee have taken a combined $3.9 million in contributions for insurance industry players—not counting the tidy $125,000 that went to Ron’s 2022 inaugural committee.

“Including their donations to the Republican Party of Florida since January 1st, 2019 (days before DeSantis took his oath of office), campaign money from the insurance industry balloons to more than $9.9 million.”

This is terrible news for anyone who owns a home or is considering buying one in the southeast U.S. hurricane alley, especially Florida, which has a long history of fraud.

As this report shows, homeowners who suffered significant storm damage and dutifully paid hurricane and home insurance premiums for decades never had a chance of being compensated for their property losses due to insurance companies who altered insurance adjuster field reports to show that homeowners should be paid about 80% less than what the adjuster said the repairs would cost.

The hurricane caused widespread damage in Florida, Georgia, North Carolina, South Carolina, Tennessee and Virginia.

When the state of Florida was notified of this fraud, they said a fraud investigation against the insurance companies would start, but two years later, nothing has happened.

While the fraud claims against insurance companies will only increase in the next few months as more damage claims are filed from homeowners in the hurricane’s path, there is also a good chance homeowners will never be paid the full amounts of their claims.

In the case of Heritage Insurance, the carrier named in the 60 Minutes report, a licensed adjuster said Heritage Insurance reduced his reports for damages to homes he inspected by up to 80%. It turns out Heritage did this systematically for other claims made by adjusters.

As the 60 Minutes report showed, Heritage paid one homeowner a net amount of $9,000 after the adjuster found that this same homeowner suffered $231.000 in damages. Later, the field adjuster said an office worker eliminated large parts of his report that said the entire roof needed to be replaced. The insurance company said it could be repaired. The insurance company after said it would not pay for any roof damages.

In a lawsuit, field agents said some of their claims were reduced by as much as 98%. In one instance, an adjuster submitted a claim that said the homeowner should be paid $239,000, yet the company only paid the homeowner $3,000.

One attorney said the insurance company wants homeowners to sue if they want their roofs replaced. Since 2021, about six national home insurance companies have exited Florida, while the newer companies that entered the market are altering damage reports and estimates.

Meanwhile, two years after filing a criminal fraud case against Hurricane instance fraud, Florida has not arrested anyone.

Heritage Insurance is very familiar with Desantis. “Two property casualty insurance firms–a subsidiary of Heritage Insurance and People’s Trust Insurance–donated a combined total of $125,000 to DeSantis’s 2023 inaugural celebration, which marked the beginning of his final term as governor in a term-limited state. According to reporting in the Washington Post, both companies participated in the $2 billion ‘taxpayer-financed relief program for property insurers’ that DeSantis signed months earlier in a 2022 special session,” according to the Merlin Law Group.

This close relationship between Desantis and the insurance industry is bad news for the residents of the Florida area’s hardest counties hit by Hurricane Helene. This includes Taylor, Dixie, and Wakulla counties in the Florida panhandle. These are red counties, so seeing how they react when their insurance claims are processed will be interesting.

This should not be a surprise. In Republican Governor Ron DeSantis’ Florida, insurance fraud is another type of business that gets away with in the Sunshine State. Florida is the fraud capital of the U.S., and there is a reason for it: criminals can come to Florida, pay off the right people, and never get prosecuted. DeSantis is a protege of Donald Trump for a reason: both tolerate criminal business practices.

So, if you are considering buying a house in Florida and other Republican-controlled states in the Southeast that have close relationships with state legislatures, think again—caveat emptor.

6 carriers

To millions of Floridians, the new financial problems are severe enough that many will not be able to pay their monthly mortgages and related Home Owner Association (HOA) fees and special assessments.

To many homeowners and condo and homeowners, Florida is no paradise.

Despite a common belief, Florida is not an inexpensive place to live. A recent survey by CNBC found that no Florida city ranked in the top 10 of the least expensive cities to live in the U.S. Naples ranked as the eighth most expensive city in the survey to live, with a median house price of $806,604.

Bad weather is another danger. The state is one hurricane away from a financial disaster. The reality is that unchecked homeowner insurance rate increases, combined with new financial requirements for older condominiums over three stories tall, the monthly non-mortgage rate increases are making homeownership problematic for millions of Floridians.

HOA payments, plus additional demands for more special assessments, and building inspections, are affecting existing owners, new buyers, renters, and sellers who all have to accept or pass on these new monthly fees and special assessments. (See note below on the new Florida statutes regarding mandatory inspections for buildings that are over 30 and 40 years old.)

To get an idea from actual homeowners in South Florida, including Palm Beach, Broward, and Dade counties, here are some actual posts, and dire predictions, from Facebook posts about the South Florida HOA and insurance situation.

Actual Posts From Actual Florida Homeowners

“No one opposes them (the homeowner’s insurance rate increases), including the state insurance regulators who are in their pockets. HOAs in Florida also have a racket going. They often collect fees for the management and maintenance of their properties, so homeowners have little recourse for shoddy service. “

“Florida is run by corporations and real estate companies are the most predatory. DeSantis relies on corporations for his campaign money, so do not expect him, or his legislature to do anything for Florida homeowners.”

“My Association is in Palm Aire. Our insurance went from about $550, 000 to $1 million annually, so you know our fees are going up. Insurance is the biggest issue.”

“We better start thinking outside the box because the present insurance situation in Florida, especially South Florida, is untenable. House and condo prices will drop like bricks if insurance becomes even more unaffordable.”

“We’ve been told our concrete restoration by the president of the board that it will take 7,8, maybe 9 months we’re going on to year 5 with no end in sight. We hired a management company that has done nothing but collect checks. You are so correct in YOUR statement where’s the state that should have somebody to oversee this corruption.”

“The problem is with homeowner’s insurance, if you have a banknote (mortgage) you have to have wind storm (hurricane insurance) coverage.”

“Florida also has the second highest auto claims rates in the nation. Premium is based on risk the higher the risk the higher the premium.”

“I just received a cancel notice from my homeowner’s insurance. My condo was built before 2002 and I lived w/in 3 miles of the coast! I’ve never had a claim. Ridiculous!”

“As a realtor and long-time resident who also lives in a Condo, this all started when Tallahassee went into a special session and decided full reserves over a weekend for everyone without thinking about the implications for the people. You are not being represented by Tallahassee and need to consider who you are voting for.”

“Our condo insurance went from $800,000, which we couldn’t afford. Went into the reserves for it. Special assessments to pay it back. Then, it went up to $1.8 million. And is now projected to go up to $2.8 million next year. My board is at a loss. We can’t afford it. Plus we have our 30-year building inspection going on. I regret buying a condo (2021) Even at my low-interest rate. My question is, should I hang on because I have a low interest rate or sell and hope to find something comparable and refi if rates go down more?”

“Believe it or not buddy, it’s time to pay the piper. The engineering assessments are astronomical and then the repair cost is not to put the Band-Aid on it, patch it and paint it and then sell it to some other sucker. Pass it down the road. Those days are all done. Get ready to sell your units because the firestorm is about to hit all the buildings. Now three stories and up. You will be devastated. Unless you’ve got deep pockets. Get ready for the new reality. The fire sale has already started. You can see deals popping up when you see more than three units hit the wall. You know it’s not the ball. It’s the price you’re going to pay.”

“I’m not going to post my association, but I will tell you they notified me recently to inform me that due to rising insurance costs, my monthly fees are going up 38 percent!”

“Imagine trying to sell any of these properties and the first thing the buyer looks it’s at the maintenance fees… $500 to $750 dollars a month !!!! That’s another mortgage”

“Insurance rates and the new laws regulating full reserves on condos such as full reserves vs partial reserves hurting us not to mention the 40-year inspection/repair costs. My HOA has tripled and is now $1215/ month, I’ve paid $30,000 in assessments and have to pay another $10,000 in July. It is going to cause foreclosures and defaults. People who have retired are being hurt, and there doesn’t appear to be any relief as of next year we will not be allowed to have partial reserves.”

“Our insurance has increased over 600% in 3 years.”

“Lol seeing people posting here is funny because this is not what is just coming around this year. This goes back 2 years from now. The insurance has been doubling every year plus the inspection and milestone inspection not to mention the new rules on the elevators so you need the upgrade. Then when you rent your condo, you have people all over saying that the prices are skyrocketing and that you are high for putting a high price.”

“Concrete restoration should have been in the condo budget to be completed every 5 years depending on the age of the building. My building has always kept up with the concrete restoration. We have owned my unit for 20 years.  However, the maintenance was $225 a month when we purchased back in 2004 and now our approved 2024 monthly budget is $873 a month. The majority of the increase is due to insurance premiums.  Now the new law that will go into effect 1/2025 will require the condo budget to have 100% reserves for future repairs for certain items. This should have been addressed at your 2024 Budget Meeting.

“In the last 3 years went from $515 to $915 for maintenance monthly !! By next year I will have paid like 25,000 in assessments! I am broke and can’t even fix my own condo because the building taking it all because they did nothing for years!! And also because the governor changing the laws for reserves. Hard times.”

“We are in old historic Pompano right next to Pompano Middle School and our HOA raised the dues from $500/quarter to $400/MONTH. They did this unilaterally without any notice or consultation with the owners.  Mind you, there are numerous structural issues in and around the properties that they haven’t even begun to address.  HOAs have been running amok in south Florida for decades but they’ve become much more bold in their violations of bylaws and owners’ rights.”

New Mandatory Building Inspections for High-Rise Condominiums Can Increase HOA Fees

According to Florida statute, “if a building reaches 30 years of age on or after July 1, 2022, and before December 31, 2024, the building’s initial milestone inspection must be performed before December 31, 2025.”

There is also a 40-year building inspection. “When a building hits 40 years of age, it is mandated by the state of Florida to have a Professional Engineer or Registered Architect conduct a thorough structural and electrical inspection to ensure the safety and integrity of the structure.  In the wake of the Surfside Tower collapse, this ordinance has now been expanded to all counties in Florida, not just Dade and Broward as it was previously.

“The new state law, which went into effect on May 26, 2022, created new requirements for milestone inspections of condominium and cooperative association buildings that are three stories and taller.”

A recent survey conducted by the US Census Bureau found that the number of people without private or government health or life insurance decreased in number every year in the last four years. Economic trends, demographic make-up, and health care policies influence the rate of health insurance coverage in the United States.

Due to the implementation of the provisions of the Patient Protection and Affordable Care Act in 2014, more Americans are getting insured, so as not to get penalized. This gave health insurance companies the chance to raise premiums. A higher demand for health insurance means a higher demand for services, prescription medication, and medical technology which all naturally add up to higher rates. However, increasing demand is second only to a more alarming reason for this trend: the rising costs of health care.

A Trillion-Dollar Industry

The Balance reports that US health care costs reached $3.2 trillion in 2015, making up 17.8% of the country’s gross domestic product. To put things into perspective, it was only equal to 5% in 1960. Aside from policy changes, a study published on JAMA Network noted that there is a linear relationship between health care spending and these three factors: service charge and intensity of treatment; population growth; and aging.

Worse, these health insurance costs are only expected to increase in the years ahead, according to LendEdu.com.

The Main Drivers

The country operates on private and government assisted health care. In comparison, most of the world adopted a universal health care system where the government pays for most or all of the medical bills. One advantage the U.S. has over other countries is that Americans can get immediate attention. Medicare and other such policies pushed Americans to rely on hospital care so much so that 1 in 5 adults pay an annual visit to the emergency room. A CDC survey showed that 79.7% of adults who do so, both insured and uninsured, felt like they had no choice but to go to the hospital because there wasn’t any other place they could go for medical attention despite the high service charges.

This problem can also be traced back to changing lifestyles.  It’s a domino effect from poor eating habits, lack of exercise, and vices; to obesity; to an epidemic of health complications that are getting more and more expensive to treat such as heart diseases and cancer. Advancement in technological equipment and treatment for chronic illnesses such as diabetes come at staggering prices. Diabetes alone has an annual budget of $64 billion. Half of the nation’s population is estimated to be suffering from a chronic disease, the treatment of which consume 85% of the total health care budget while the sickest 5% are associated with half of the total cost.

Demographic composition is also one of the main drivers of the increase in health care costs. Health IQ explains that age is the number one factor that underwriters take into account when coming up with insurance rates because as the population gets older and bigger, medical bills get more expensive. The population growth rate accounted for an additional $269.5 billion while the aging population accounted for a $135.7 billion increase in the budget.

Baby boomers who are now well into their 60s and 70s are estimated to manage at least one chronic condition or disability. This means that in order to keep up with the demand, pharmaceutical companies will have to create more output; private facilities will have to hire more personnel for palliative and hospice care; and hospitals will have to accommodate the needs of older and sicker patients. Mutual Fund Reform previously quoted an AARP study that this age group would suffer a 22% increase in their yearly premium. That is why the number one complaint about life insurance is the annual premium hike, especially to people in the third quarter of their lives.

Life Insurance: A Necessity

Because of the upwards trend of health care spending, life insurance has proven to be a necessity for Americans. A single hospitalization can leave a serious dent on one’s finances and may even lead to a lifetime of debt. Up to 1 million adults declared bankruptcy due to the rising costs of medical bills in 2015 and 40% of the American population accumulated debt due to medical care. Being insured lowers the risk of debt because of the assistance one could get in the event of a medical emergency.

Access to preventive, primary, and follow-up care are additional reasons for the dependency on life insurance. As part of ACA’s provisions, preventive services such as regular check-ups, vaccinations against common diseases, and screenings are covered by health care plans. Catching illnesses at an early stage means it will be easier to treat and will decrease costs dramatically in the long run. If and when accidents or medical emergencies do happen, rehabilitation and recovery are also more accessible which would be very difficult to obtain if one does not have life insurance.