For seven months, Bill and Ann Sargent were in a twilight zone — unsure if they would have homeowners’ insurance, despite completely reroofing and rewiring their 1925 home on Cleveland Heights Boulevard.

Their Orwellian odyssey began at the end of May when AAA Insurance notified them that it was canceling their policy, even though Ann Sargent never made a single claim in more than 50 years as a client.

Like many Florida homeowners who live in historic cottages, bungalows and even midcentury-modern structures built before 1974, the Sargents’ policy was being terminated because the home was more than 50 years old. The cancellation would be effective on Aug. 30.

AAA announced in July that it was dropping some policyholders “to manage risk and catastrophe exposure,” but did not specify how many policies would be canceled. That announcement came days after Farmers Insurance announced it was pulling out of Florida completely. 

Insurers flee Florida

In the past three years, 12 companies that offered homeowners insurance in Florida have been declared insolvent and at least 15 more have stopped writing new policies in the state.

Some insurers blame Florida’s storm risk, with Hurricanes Irma in 2017, Michael in 2018 and Ian in 2022, all causing catastrophic damage. They also cite inflation and supply chain disruptions as making repairs more costly.

Another major factor has been lawsuits brought against homeowners insurance policies. According to Bankrate.com, Florida accounts for only 9% of the country’s home insurance claims but 79% of its home insurance lawsuits. And, it says, many of those are fraudulent.

“In Florida, fraud and legal abuse shenanigans like these have wreaked havoc on insurance markets for several years,” a study by the Insurance Information Institute states.

It is not clear how many homeowners’ insurance policies have been dropped in recent years, but what is clear is that the rates people pay have at least doubled and in some cases tripled or quadrupled. And Floridians pay substantially more than their northern neighbors.

Gov. Ron DeSantis summoned lawmakers to Tallahassee in May 2022 and again in December 2022 for special sessions to address a host of insurance problems including sky-high premiums, but Florida homeowners are not yet feeling any relief.

According to an analysis by the Insurance Information Institute, Florida homeowners now pay an average of $6,000 a year for property insurance. That’s 42% higher than 2022, when Floridians paid $4,321, and more than triple the U.S. average of $1,700. 

The rates have gone so high that the Insurance Information Institute says 15% to 20% of Florida homeowners are foregoing coverage, known as “going bare” — nearly double the national average of 7% to 12%.

The Sargents’ ordeal

Ann Sargent, 84, moved into the Cleveland Heights home with her first husband and two young rambunctious sons in 1970. A third son arrived in 1972. Ann Sargent spent years as a public school teacher, retiring in 2004 as an English teacher at Kathleen High School. Bill Sargent, 78, and Ann married in 1991. Bill owned a pest control company for many years and also had a successful art photography business he ran out of the home’s detached garage studio.

Over the summer, the Sargents found a new insurance agent, Oliver Kendrick of Florida Farm Bureau, who worked hard to get them a policy with Citizens Property Insurance Corporation. But they had to replace the roofing on the bright yellow two-story house and bring some wiring up to code.

In August, the couple paid Total Home Roofing $21,300 for a brand new roof on their home, front and back porches and a detached garage. They also paid Lewman Electric $34,574 for a complete home rewiring — not just a few minor repairs to bring it up to code. Finally, they paid Alan Dyer Inspections $150 for a four-point inspection of the roof and major systems, all of which passed.

Having spent nearly $56,000 on upgrades, the Sargents were relieved when Kendrick informed them on Nov. 1 that they had been approved by Citizens for coverage. They promptly sent Citizens the full year’s premium of $5,775.

Welcome to Citizens

According to its website, the Florida Legislature created Citizens Property Insurance Corporation in 2002 to serve “property owners who cannot find coverage in the private insurance market.”

The nonprofit, state-run “insurer of last resort” was created during the tenure of then-Gov. Jeb Bush, who also floated the idea of “a federal program that would financially protect Florida and other states from losses related to mega-events,” although that idea never took wing.

Kendrick sent the Sargents a “welcome aboard” letter, which arrived Dec. 20.

But the very same day, they also received letters from Citizens saying the policy had been canceled, effective Jan. 7.

“The reason for this action is: Property is not eligible for coverage because the roofing system is not acceptable. If you have any questions, contact your agent,” the letter from Citizens read.

Bill Sargent said it was explained to him that Citizens automatically accepts clients — and takes their payment — before checking the property for eligibility.

Florida legislators have been alarmed by the massive increase in Citizens policies in recent years. Statewide, the number of Citizens policies ballooned from 443,228 at the start of 2020 to a peak of 1.4 million at the beginning of October. In Polk County, the number of policies jumped almost ten-fold in the same time frame, from 2,040 to 19,977.

To stem the tide, Citizens began an aggressive “depopulation” campaign several months ago, trying to offload as many policies as possible to seven companies newly approved by the state Office of Insurance Regulation. 

The efforts seem to be working. Citizens shed 179,087 policies statewide and 4,091 in Polk County between October and the end of the year.

How could a new roof be ‘unacceptable?’

The Sargents didn’t understand how a brand new roof could be “unacceptable.”

Before Christmas, Kendrick’s secretary told them Citizens might have objected to the roofing material used on the back porch. Some insurers don’t like rolled roofing, she said, despite the fact that it meets roofing codes and passes inspections.

Ann Sargent said she wanted shingles on everything, but because the slope of the roof on that porch was less than two feet from back to front, Brian Brenneman with Total Home Roofing recommended a rolled roofing product. Rolled roofing consists of an underlayer of tarpaper and an upper layer of roofing material, which was then rolled out in three long strips onto their back porch roof.

“She said, ‘That’s probably the reason,’” Ann Sargent recalled. “I was left with the strong impression that she was convinced that Citizens’ was very unlikely to change their point of view. She did say I’d get a full refund of the premium.”

In text messages, Kendrick concurred.

“They don’t like rolled roof, so that probably played a big part,” Kendrick said.  “I know we tried very hard to help. The market is the worst it has been in all the years I have been doing this. So difficult.”

Kendrick said he was limited in what he could do.

“Citizens is the last resort. And if they won’t take it, I can’t imagine who would,” Kendrick said. “There is nothing we can do to make them keep the policy.”

Through the holidays, the couple fretted and worried. Bill Sargent spent time in the emergency room from the stress. The Sargents were concerned that the home, which has withstood — unscathed — every major hurricane to hit Lakeland since Calvin Coolidge was President, would be deemed uninsurable and thus virtually unsellable when the time comes.  

A baffling decision

The Sargents called Citizens last week, desperate for answers. On Thursday morning, Citizens customer service representative Shakari Jackson, whom the Sargents described as kind and helpful, spoke with them on the phone and then emailed them a little more detail about the cancellation:

“Per Underwriting, ‘Scheduling to cancel policy due to: Secondary roof has warping and rot as seen on page 6 of Windmit on the uppermost image to the left of the photo, and does not appear to have a steady grounding as seen on page 5 of Windmit bottom rightmost image.”

The Sargents were baffled because the upper left photograph on page 6 of their new wind mitigation report didn’t even show the roof — it was a photograph of their house at an angle that didn’t allow for a view of the roof.

The lower left photograph showed the back porch roof, which is brand new. The back porch is 197 square feet and runs the width of the house.

And no one could tell them what “steady grounding” even meant.

Three customer service representatives, one director … and finally, reinstatement

Jackson, the Citizens customer service representative, zoomed in on one photograph of their carport area and also noted “personal items” stored there — Bill Sargent had some of his tinkering and puttering supplies there. That could be a problem, she said.

But that didn’t explain the incorrect photo references, the comments about “warping” and “rot,” or the note about “steady grounding.” The Sargents wondered if the underwriter had been looking at the right report.

LkldNow reached out on the Sargents’ behalf to Citizens Communications Director Michael Peltier, who said on Thursday afternoon he would work on the issue.

Peltier messaged Friday that he thought he would have some good news for the Sargents, but by 5:30 p.m. they had not heard from him. Peltier told LkldNow at about 6 p.m. that he had not heard back from the underwriters in his office.

In the meantime, a different Citizens customer service representative told the Sargents on Friday that if they could submit four items before midnight Saturday, they could be reinstated:

• A completed roof permit.
• All photos by roofer.
• All paid-in-full invoices.
• And an updated backyard view of the house showing that the carport has been cleared.

“She said if the policy is canceled, it can be reinstated when the required documentation is submitted — so it ain’t over until it’s over,” Bill Sargent said. Despite his recent health struggles, he and Ann spent Saturday boxing up what was on the carport and putting it away in his studio.

Over the weekend, the couple received a check from Citizens for more than $250, with a message saying it was for an overpayment.

On Monday morning, the Sargents spoke with a third Citizens customer service representative and were told that a rescission of their cancellation notice was put in the mail on Friday afternoon. After seven months of costly repairs, approval, rejection and hours on hold, they now have insurance again.

Bill Sargent, a man who never minces words, summed up their experience and that of so many others in Florida in dealing with property insurance these days: “One long, dragged-out, calamitous clusterf***.”

What the Legislature has done so far

Despite Florida homeowners’ frustrations, lawmakers and local insurance agents are hopeful that steps the Legislature has taken in recent years will eventually stabilize the state’s insurance market — if not actually lowering premiums, at least slowing increases and adding more carriers. Recent reforms have included:

May 2022 Special Session

• My Safe Florida Home program: The Legislature created the My Safe Florida Home Program, allotting $150 million to provide free hurricane inspections to owners of single-family homes with homestead exemptions and grants of up to $10,000 for improvements to make their properties safer and more resistant to hurricane damage.
• ‘Useful life’ rule for roofs: The Legislature barred insurance companies from denying coverage solely based on the age of a roof if the roof is less than 15 years old or an authorized inspection shows the roof has five or more years of useful life.
• Contractor solicitation rules: The Legislature passed a bill prohibiting roofing contractors from sending any written or electronic communications to homeowners encouraging them to make property insurance claims for roof damage without specifying that it’s a third-degree felony for a contractor to pay or waive an insurance deductible or file a false claim.

December 2022 Special Session

• No more one-way attorney fees: The Legislature repealed Florida’s one-way attorney’s fee provision, which required insurers to pay the policyholder’s legal fees if any amount of recovery was awarded, either in court or an out-of-court settlement. But if the insurer won, it didn’t get its fees covered. The practice was seen as a strong incentive for plaintiffs’ attorneys to file unnecessary, premature or duplicative suits. However, the repeal makes it harder for homeowners with legitimate grievances to find legal counsel.
• No more assignment of benefits: The Legislature prohibited homeowners from assigning their insurance benefits to a third party, thus giving contractors the right to file insurance claims on their behalf.
• Citizens as a last resort: The Legislature passed a bill making homeowners ineligible for insurance through Citizens if a private insurer is willing to offer comparable coverage that is not more than 20% more expensive than the Citizens premium.
• Less time to file claims: The Legislature shortened the period of time policyholders have to initiate claims from two years to one.

2023 Regular Session

• Insurer Accountability Act: A rare bipartisan bill required more transparent claims-handling practices, specifically prohibiting companies from altering adjusters’ reports without detailing why they lowered policyholders’ estimates and who made those changes. It also said failing or insolvent companies can’t solicit or accept new policies, and officers of those companies cannot receive bonuses.

What is under consideration

The 2024 legislative session began Tuesday and although there are a few insurance-related bills, lawmakers have indicated that they don’t expect them to get much traction. Many legislators are waiting to see what effect previous measures will have on the insurance market.

2024 Regular Session (proposed)

• Insurance rebate program for low-income seniors (SB 348/HB 1055): The proposal would create an insurance rebate program for Floridians age 65 and older. Seniors with incomes at or less than 200% of the federal poverty level — about $39,440 for a two-person household — could get a rebate equal to 10% of their premiums.
• Expanding access to Citizens (HB 565/SB 604): In counties where there is “not a reasonable degree of competition” — currently Miami-Dade and Monroe counties — homes worth up to $1.5 million could be insured by Citizens,  instead of the current limit of $1 million. Annual rate increases in those counties would be capped at 10% per year. Additionally, homeowners would not be required to purchase flood insurance if their property is in the low-risk flood zone X.
• Citizens surcharge for high-value homes (SB 1106/HB 889): Statewide, homes valued between $700,000 and $1 million could be insured with Citizens if private coverage isn’t available, but there would be an additional surcharge of up to $2,500 per year. Currently, homes worth more than $700,000 are ineligible for coverage.
• ‘Actual value’ instead of ‘replacement cost’ for condominiums (SB 802/HB 655): The bills would create a windstorm pilot program allowing condominium associations to insure the actual cash value of the roof, as opposed to the replacement cost. It would be less expensive, but would not provide as much coverage in the event of a catastrophe.
• Insuring the unpaid balance, not the whole home (SB 1070/HB 809): Like the condominium bill, this proposal would reduce premiums by allowing homeowners to buy coverage equal to the unpaid principal of their mortgage, instead of the entire home. Insurers would have to warn customers that they could incur “significant financial losses” in the event of a disaster.