The truth about Florida’s insurance market — an agent’s perspective

As an insurance agent serving Florida homeowners for decades, I have seen firsthand how the challenges of our state’s insurance market impact policyholders.

A recent article in the Tampa Bay Times by Laurence Mower presents an incomplete and misleading view of our industry. It implies that insurers are funneling money to investors while crying poor.

That narrative is not just inaccurate — it’s reckless.

Mower’s reporting relies on half-truths, cherry-picked data, and a blatant disregard for the structural realities of Florida’s insurance market. His article is a textbook example of sensationalist journalism that ignores hard facts in favor of a clickbait narrative that fuels public anger while doing nothing to solve the real issues at hand.

The reality of rising costs for policyholders

I don’t need a report to tell me what my clients already know and what I’ve seen every day for over five years — insurance rates have gone up, and coverage options have become more limited. But the reasons behind these increases are often misunderstood.

Mower’s article suggests that insurers are manipulating their finances to justify rate hikes, ignoring the real factors at play: massive legal abuse, skyrocketing reinsurance costs, aggressive and blatantly fraudulent roofing claims, and a market that has seen multiple companies fail in just a few years.

For years, Florida’s insurance market has been crippled by excessive lawsuits and roof fraud. Prior to recent reforms, our state accounted for nearly 80% of all homeowners insurance litigation in the U.S., even though we made up just 9% of claims.

The cost of these lawsuits didn’t just hurt insurance companies — it was passed down to every homeowner in the form of higher premiums. As an agent, I’ve seen long-time clients struggle with these increases through no fault of their own, and I’ve had to explain why their choices are shrinking. And it’s awful.

The essential role of MGAs in Florida’s market

One of Mower’s most misleading claims is his attack on Managing General Agents (MGAs), which he paints as a tool for insurers to extract profits at the expense of policyholders. This argument is not just false — it’s dangerously ignorant.

The MGA structure is the backbone of Florida’s insurance market, ensuring that private insurers can operate efficiently in one of the highest-risk insurance environments in the world.

Why MGAs are critical to Florida’s market stability

Florida is unique in that its extreme hurricane risk makes it a financial minefield for insurers. Large national carriers have largely pulled back from the state, unwilling to bear the catastrophic exposure, leaving Floridians dependent on a network of smaller, specialized domestic insurers.

These insurers rely on MGAs to provide essential operational functions, including:

• Underwriting Expertise: MGAs ensure that risk is assessed accurately, and policies are priced appropriately, preventing financial instability that could lead to mass insurer failures.
• Claims Management Efficiency: In a state where hurricanes can lead to tens of thousands of simultaneous claims, MGAs provide the infrastructure to process claims swiftly and fairly.
• Reinsurance Procurement: MGAs negotiate reinsurance agreements, a necessity for any insurer operating in Florida’s high-risk environment. Without effective reinsurance strategies, insurers would be unable to pay claims after a major storm, leaving homeowners unprotected.
• Policy Administration and Compliance: MGAs handle policy issuance, regulatory compliance, and administrative functions, allowing insurance companies to focus on financial stability.

The economic reality: MGAs attract capital

One of the most critical but least understood aspects of MGAs is their role in attracting private investment to Florida’s insurance market.

Without a structured system that allows for investor returns, capital would flee the state, leaving homeowners with even fewer choices. We don’t get a pass on the economic reality of operating a business just because we don’t like it.

Former Florida Insurance Commissioner Kevin McCarty has explicitly stated that MGAs are indispensable in keeping Florida’s market afloat.

Similarly, Jeff Grady, former CEO of the Florida Association of Insurance Agents (FAIA), has warned that dismantling the MGA structure would “kill the only thing that we have left, which is the manner in which we bring capital to our state.”

The reality is simple: If MGAs are overregulated or dismantled, Florida’s private insurance capacity will collapse, driving even more homeowners into Citizens Property Insurance Corporation, the state-run insurer of last resort.

Exposing Mower’s reckless journalism

Laurence Mower’s article doesn’t just misinform — it actively undermines efforts to solve Florida’s insurance crisis. His claims rely on selective reporting, ignoring key industry realities while cherry-picking data that fits his predetermined narrative.

Mower fails to acknowledge that every MGA contract is rigorously reviewed and approved by the Florida Office of Insurance Regulation (OIR) to ensure fairness. He neglects to mention that MGAs are essential to keeping insurers solvent, and he blatantly ignores the role that rampant litigation, roof fraud, and reinsurance costs have played in driving up rates. He glides right by the comment that many affiliated companies poured back almost $700 million to the insurance companies in order to keep them from insolvency.

By focusing on a sensational attack on insurers, Mower diverts attention from the real issues: the trial bar’s exploitation of the legal system, the billions lost to frivolous lawsuits, the abusive and fraudulent roof replacement schemes, and the increasing cost of catastrophic reinsurance. These are the true drivers of Florida’s insurance crisis — not the necessary and well-regulated role of MGAs.

The path forward: Smarter solutions, not misguided attacks

Rather than feeding into misleading narratives like Mower’s, we need real solutions that address the actual problems plaguing Florida’s insurance market:

• Reducing Litigation Abuse: Florida has made progress with recent legislative reforms. Although more work is needed to curb predatory lawsuits and roof replacement schemes, we need to allow the 2022 reforms to continue to work. It took us ten years to get into this mess, and in an ultra-regulated industry, it will take more than 24 months for the effects to really be felt.
• Reinsurance Affordability Initiatives: State and federal policymakers must work to make reinsurance more affordable, ensuring that insurers can remain solvent while keeping premiums manageable.
• Protecting the MGA Structure: Lawmakers must resist reactionary policies that weaken MGAs, which are essential to keeping private insurance capital in Florida.

The bottom line is that MGAs are not the problem — sensationalist reporting and misguided legislative efforts are.

If we allow misinformation to drive policy decisions, we risk collapsing Florida’s still fragile insurance market. Instead of attacking the industry, we should work toward solutions that keep insurance affordable and available for homeowners.

Mower’s article does nothing to help Florida’s homeowners. At best, it’s misguided. More likely, it’s simply naïve and uninformed about business economics or the insurance industry. Either way, the narrative drawn is misleading and undermines the very reforms that could stabilize our market, bring back coverage options, and reduce rates for Florida property owners.

As an agent who sees the real impact of these policies every day, I will continue fighting for truth, transparency, and real solutions while pointing out incomplete or naive information when I see it.

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Allen McGinniss is the principal of the McGinniss Himmel Insurance Agency, LLC.

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