"Cancelled!" - The Dreaded Florida Homeowners Insurance Letter

Real Estate Broker/Owner with Rulnick Realty, Inc.

I recently wrote about our homeowners insurance doubling on one of our Destin Florida area houses. When I opened my mail the other day, I got another insurance cancellation notice! I said “Oh no, this cannot be happening again!” The insurance company for our primary residence, Gulfstream Property & Casualty Insurance, just went out of business, with $35 million in underwriting losses it could not sustain. That left us and 33,000 other Floridians scrambling to get new insurance, right before the start hurricane season (as I sit here now awaiting a Tropical Storm!)

After I got the cancellation notice, I contacted my Florida homeowners insurance agent to find another policy. He got quotes from eight companies, and the most reasonable was 71% higher than our previous coverage!  That’s from $2460 per year to $3460 per year. Other policies were as much as $7500, or more than triple. We had no choice but to accept the new policy.

“What the heck is going on with Florida homeowners insurance prices?” I asked my agent. “It’s scammers!”, he told me. How do these insurance scams work?

Basically, “runners” will target neighborhoods in Florida looking for houses with a little wear and tear on the roof.  They may go door-to-door, put out flyers, or post signs that say “Free Roof Inspections”. Even if the roof is good, they tell homeowners that they can get a free new replacement roof by filing an insurance claim. They will do all the paperwork, and may pay the insurance deductible for the homeowner. They may also give the homeowner a gift certificate to participate.The homeowner then signs a contract and “assignment of benefit” which allows the roofing contractor and the attorney involved in the scam to file an insurance suit stating the roof was damaged from a previous storm. The assignment of benefit allows them to receive any monetary award as a result of the claim. They may go so far as removing shingles and starting the roof job, so that the insurance company’s adjuster cannot verify the previous condition of the roof.

When the claim is settled, the attorney behind the fraud can receive what’s called a contingency fee multiplier. This could be double, ten times, or even 30 times the monetary damages the homeowner (whose benefits are now assigned) wins. For example, one 2019 case paid the attorney $700,000 on a $35,000 claim. Florida is the only state in the nation that allows these multipliers on insurance claims. Florida has 76% of the homeowners insurance claim litigation in the country, losing $1.5 billion last year.

What’s happening as a result of these fraudulent claims? Florida insurance rates rise for everyone.  35% of the hidden cost of a policy is to cover the insurer’s expense in fighting this scam litigation. Insurers don’t want to cover homes with roofs older than ten years, because those are more likely to be targeted in a scam.  So, in order for a homeowner to keep their insurance, or to cut the cost, they have to pay to replace a perfectly good roof that’s a little old.  This is a feeding frenzy that benefits only the roofing contractors, shingle manufacturers (who teach seminars in how to get insurance companies to pay), and scammer attorneys.

Recent Florida legislation, SB76, was passed to help fight the insurance fraud and lessen insurers’ risk. It limits the originating date of claims to be within two years from the event, versus three, has litigation stipulations which may reduce awarded amounts and attorney fees, and makes it illegal to solicit homeowners with prohibited advertising. The legislation will probably not reduce Florida insurance rates soon, as it’s criticized as not going far enough. It does not eliminate the contingency fee multiplier that can pay out huge damages to the attorney.

And as for stopping illegal solicitation, I just saw another “Free Roof Inspection” sign go up in my neighborhood.


It’s Wendy… It’s Sold!

Wendy Rulnick, Broker, Rulnick Realty, Inc.
Call 850-259-0422
Email Wendy: itswendy@rulnickrealty.com

Wendy Rulnick, Broker, lists and sells real estate in Destin, Santa Rosa Beach, 30A, Miramar Beach, Crestview, Sandestin, Seaside, Rosemary Beach, Okaloosa Island, Fort Walton Beach, Niceville, Freeport, Bluewater Bay, Navarre, Florida.

Parlo italiano.

Posted by

"It's Wendy... It's Sold!"

Wendy Rulnick, Broker/Owner Rulnick Realty, Inc.

Call Wendy Rulnick 1-850-259-0422

email itswendy@rulnickrealty.com

www.rulnickrealty.com property searches and community info

Wendy Rulnick helps real estate buyers and sellers on the Emerald Coast of Florida.

Rulnick Realty


Comments (8)

Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy


I am amazed at the length scammers go to make a buck.  Sorry, you were one of the ones that had your insurance cancelled.  Wishing you continued success.  A

Aug 16, 2021 01:31 PM
Wendy Rulnick

Ron and Alexandra Seigel Me, too! I was surprised when my insurance agent outlined the way the scams work. 

Aug 16, 2021 01:37 PM
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

oh my gosh, Wendy!  This is terrible and made more so because there are so many seniors there who often fall prey to these scammers!!!

Aug 16, 2021 03:06 PM
Wendy Rulnick

Kathy Streib I hadn't even thought of that, but you are definitely right! 

Aug 16, 2021 03:23 PM
Patricia Feager, MBA, CRS, GRI,MRP
Selling Homes Changing Lives

Wendy Rulnick - That news is devasting! Shocking! The ramifications are huge. May you be strong and figure this all out before hurricanes hit. This sort of news is unacceptable. I'm so sorry for you and the people in Destin. 

Aug 16, 2021 07:06 PM
Wendy Rulnick

Patricia Feager, MBA, CRS, GRI,MRP It is shocking.  I don't know how we don't have strong enough legislation to stop it yet. 

Aug 17, 2021 06:16 AM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Hi Wendy - oh no.  I hope that does not happen in our neighborhood in Port St. Lucie.  Our policy is reasonably priced.

Aug 17, 2021 04:23 AM
Wendy Rulnick

Grant Schneider I believe there were three total Florida insurance companies who went out of business, dropping 50,000 policies.  If your roof is less than ten years old, you should be ok.

Aug 17, 2021 06:15 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Wendy, this would be AWFUL to receive a notice of cancellation!   Those scammers should get a real job! 

Aug 17, 2021 05:18 AM
Wendy Rulnick

Joan Cox I know, but I think they'll be working it for a long time!

Aug 17, 2021 06:14 AM
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello Wendy - I wasn't aware of this Florida insurance information until reading this post.  Interesting yet somewhat(very much) scary.  

Aug 17, 2021 05:39 AM
Wendy Rulnick

Michael Jacobs I did not know as much detail as I do now, after researching it. It is truly criminal.

Aug 17, 2021 06:13 AM
Brian England
Vacasa - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

That is very sad that these scammers are doing that.  I thought insurance companies would send out an adjuster to verify repair was needed before paying out for such things?  I recall when we had bad storms here and all of the roofers were going door to door with the assumption that everyone needed a new roof.  My insurance company sent out an adjuster and he said I needed a new roof.  I got bids and went with the roofer that was honest with me and told me that I didn't truly need a new roof, but if the insurance company approved it, he would gladly put a new roof on it for me.  I was probably 3-5 years from needing a new roof anyways.

Aug 17, 2021 05:43 AM
Wendy Rulnick

Brian England What's happening is the scam companies remove some or all of the shingles, before the insurance adjuster comes out. So, there is no way to see the prior condition.  My insurance rep said someone was actually caught on video taking shingles off with a shovel after a storm.

Aug 17, 2021 06:12 AM
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Thank you very much for sharing your personal experience and your observations.

Many Florida retirees may have difficulty with the higher insurance premiums.

Aug 17, 2021 06:03 AM
Wendy Rulnick

Roy Kelley They are and it's spreading. 

Aug 17, 2021 06:09 AM