‘Catastrophically dysfunctional’ insurance market due to Rick Scott’s ‘sweetheart deal’ with insurer, says Debbie Mucarsel-Powell

Debbie Mucarsel-Powell, who is running to unseat Sen. Scott in November, is calling the Republican senator out for vetoing safeguards on the insurance industry and refusing to recognize the growing threat of climate change.

In Florida, a state wracked by ever worsening hurricanes like Helene and Milton, protecting home and property from a major loss is a constant concern. 

But despite the crucial need for coverage, the property insurance market in Florida has been described as “catastrophically dysfunctional.” 

And it is easy to see why. According to News4Jax, the average home insurance premium in renewals rose by 68% across the Sunshine State, the fastest increase in the country over the past two years. Between 2020 and 2024 alone, rates have doubled and, in some cases, tripled, with some Florida residents paying five and six-digit annual home insurance rates. 

Further complicating the issue, several major home insurance companies – including Farmers Insurance – opted to leave the state, while other insurers chose not to renew policies for homes deemed “high-risk.” 

A failed promise

Many attribute the worsening crisis to Republican lawmakers’ approval of a $2 billion reinsurance reserve in 2022. The idea was to protect insurers from bankruptcy in the event of a cataclysmic event. 

Insurance companies usually buy such coverage on the open market, but Gov. Ron DeSantis chose to use tax dollars to fund the reserve. Yet, despite the promise that this move would provide economic relief for consumers, costs for policyholders rose dramatically after the passage of the taxpayer-funded subsidy, and rate increases have outpaced any savings derived from the fund. DeSantis also signed legislation to shield insurers from lawsuits and shortened the period of time that homeowners can file claims with their insurers.

RELATED: How property insurance premiums shot up when Rick Scott was governor

Critics say these efforts have worsened the home insurance crisis in Florida and left homeowners struggling to find affordable policies, or worrying claims won’t be approved.

A number of lawmakers and industry experts, however, say that Florida’s insurance problems started much earlier, even before DeSantis’ move to fund the reserve. 

A ‘sweetheart deal’ 

“Florida’s insurance crisis started when Rick Scott gave a $52 million sweetheart deal to Heritage, a donor’s fledgling insurance company,” Debbie Mucarsel-Powell told Floricua. The former Democratic congresswoman is running for the US Senate against Republican Sen. Rick Scott, who was governor of Florida from 2011 to 2019. 

Heritage Property Insurance and Casualty got its footing in Florida’s property insurance market in 2013, when Scott’s administration gave the company a $52 million deal to absorb 60,000 policyholders from Citizens, which the state created in 2002 as an insurer of last resort for homeowners. 

The $52 million deal came two months after Scott’s campaign received $110,000 from Heritage. The company, which was spending vast sums on lobbying, also donated $30,000 to the Florida state Republican Party. 

“Property insurance premiums skyrocketed thanks to rate increases from the same companies bankrolling Scott’s campaigns,” Mucarsel-Powell added.

Adding to the problems

Currently, Heritage is under criminal investigation for systemic fraud. As detailed by whistleblowers in a 60 Minutes report published late in September, Heritage is being accused of telling clients that repairs would cost significantly less than what insurance adjusters estimated following Hurricane Ian in 2022, leaving owners concerned that the reimbursement issued by the insurance company would not cover the costs of repairs, which can often run into the tens of thousands of dollars.  

According to the Florida Office of Insurance Regulation, the Tampa-based Heritage Insurance has also been slow to respond to and pay claims, has used improperly licensed adjusters, and kept poor records, the Tampa Bay Times reported. 

“Heritage Insurance never would have had the chance to rip off thousands of Florida homeowners if Rick Scott didn’t hand them $52 million right after cashing a campaign check,” Florida Democratic Party Chair Nikki Fried told Floricua. “Scott put his donors’ interests first, and now Floridians are being crushed by an insurance crisis that started under his watch.”

A dangerous bill for Floridians 

In his first year in office Scott also signed Senate Bill 408, despite critics’ warnings that the legislation allowed a reduction in overall coverage limits, shortened the window for filing sinkhole and storm-related damage claims, and limited claims for damage caused by sinkholes to primary structures, among other things. Insurance companies and business groups praised the bill.

Scott has also continued to refuse to recognize the threat of climate change, added Mucarsel-Powell.

“Floridians deserve a Senator who will tackle the insurance crisis head-on and invest in making our state more resilient to extreme weather and climate change – something Rick Scott has proven incapable of over his 14 years of failed leadership.”

Mucarsel-Powell says that if she is elected to serve in Washington next year, her top priority would be to sponsor a bill filed in the US House of Representatives that aims to lower the cost of homeowners’ insurance by 25%.

The proposal Mucarsel-Powell is referring to calls for the federal government to issue post-event bonds to insurance companies, so they would not be at risk of ruin. In essence, the federal government would help guarantee part of the insurance cost for homeowners when disaster strikes, which would result in Floridians paying less in insurance rates.

RELATED: Millions of Florida homeowners could pay more for property insurance