Florida regulators approved another company to offer property insurance in the state while pushing back on recent criticism that insurers deny legitimate claims.
New Port Richey-based Apex Star Reciprocal Exchange will offer fire, homeowners multiperil and other coverage in the state, according to the Florida Office of Insurance Regulation. Regulators say it's the 12th company authorized to write policies in the state since legislators enacted new laws in 2022. The new companies have roughly $418 million in financial cushion to cover claims, the state said.
“The continued growth in Florida’s insurance market is due in large part to the historic legislative reforms we have enacted," Insurance Commissioner Mike Yaworsky said in a statement.
Florida's insurance market has come under scrutiny in recent years after some homeowners saw their rates more than double following a series of hurricanes, and those rising costs have emerged as a major factor contributing to the state's ongoing housing affordability concerns. Critics contend that Florida's high-risk insurance market remains broken and undercapitalized and that some policyholders aren't getting what they pay for.
Apex did not respond to requests to comment.
Weiss Ratings, an independent rating firm based in Palm Beach Gardens, Florida, said it could not rate Apex because the company is too small. Other new insurance companies in Florida are also undercapitalized, according to Weiss.
The new companies' $418 million cushion is "only an average of $34.8 million per company, not even enough to cover a single home among the 10 that sold for $49 million or more in Palm Beach last year," Weiss founder Martin Weiss said in an email.
Claims allegedly closed without payment for invalid reasons
What's more, Florida insurers often disregard policyholders by denying legitimate storm claims or opting not to make payment for invalid reasons, according to Weiss Ratings. Last week, the firm said 14 property insurers in Florida closed more than 50% of homeowner claims in 2024 without payment, while nine other companies closed at least 40% of claims with no payment.
The Office of Insurance Regulation, or OIR, said its "enhanced data reporting" does not support Weiss' allegation, but the office pledged more transparency. The OIR said its website now shows more reasons why insurers didn't pay claims for hurricanes Helene and Milton last year. The two most common reasons are that the claim damage fell below the insurance policy’s deductible and that the loss involved flood damage that windstorm policies do not cover, the office said.
"OIR takes any alarming claims of insurer misconduct seriously, and I have asked my office to profusely inspect all closed claims without payment data," Yaworsky said in a statement. "If we find any suspicious activity, we will hold insurance companies accountable.”
A special legislative session in 2022 resulted in insurance reforms that included making it illegal for contractors to file insurance claims on behalf of homeowners, also known as assignment of benefits. It also led to the elimination of one-way attorney fees that forced insurance companies to cover the legal costs of the plaintiffs suing them.
Regulators say the reforms have made the market more stable and stopped the rash of rate increases.
Since January 2024, 19 companies have filed for rate decreases, and 37 have requested no change, according to the OIR. The office also cited an S&P Global report that showed Florida had the nation's lowest average homeowners rate increase last year, with a statewide average increase of 1%.