TALLAHASSEE — Florida regulators issued a $1 million fine against one of the state’s largest home insurers Thursday for how it treated policyholders after Hurricane Ian.
Tampa-based Heritage Insurance was slow to respond to claims, slow to pay claims, improperly used licensed adjusters and kept poor records, the Florida Office of Insurance Regulation found.
The company, which has almost 150,000 policies in Florida, agreed to pay the fine.
The regulators’ findings confirm what many Floridians say they experienced after Ian hit Southwest Florida as a Category 4 storm in September 2022.
Taking a random sample of a few hundred of Ian’s company claims, examiners found numerous violations of state laws:
- In In 21.6% of cases, Heritage did not pay or denied claims within 90 days.
- In In 30.3% of cases, Heritage did not acknowledge having received communication about a claim from the insured within 14 days.
- In In 42.9% of cases, Heritage did not ensure that its adjusters provided policyholders with the adjusters’ name and license number.
- In In 4% of cases, Heritage used appraisers who were not properly licensed.
In total, regulators found the company violated nine different state insurance codes. Heritage also violated one of its internal policies, failing 57.4% of the time to initiate voice-to-voice contact with a policyholder within one business day of receiving a complaint, regulators found.
In a statement, Heritage CEO Ernie Garateix said the company also noticed the problems internally. He said the company has since taken steps, including creating a new role of director of governance and compliance and implementing new claims management software.
“Our message to our policyholders is simple: we are committed to excellence and will never stop striving to improve,” said Garateix.
Heritage has been a political presence in Florida since its founding in 2013 by then-CEO Bruce Lucas. The company started with the help of up to $52 million given to it to withdraw policies from state-owned Citizens Property Insurance, a decision that came after donating $110,000 to then-Gov. Rick Scott. The company was also a sponsor of the inauguration of Governor Ron DeSantis’ re-election.
Heritage’s parent company has donated at least $2.3 million to Florida politicians and political committees since 2010, state records show.
The fine is one of the largest against an insurance company in Florida history. In 2013, regulators fined Fort Lauderdale-based Universal Property and Casualty Insurance Co. nearly $1.3 million for unfairly denying claims and making outsized profits at its affiliated companies.
The response to the fine from state authorities was muted on Thursday.
Chief Financial Officer Jimmy Patronis, one of the state’s two insurance regulators, hosted a roundtable called “Putting Policyholders First” in Coral Gables on Thursday, but did not mention the fine or Heritage’s behavior. Patronis does not oversee the Office of Insurance Regulation, which imposed the fine.
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When asked for comment, Patronis spokesperson Devin Galetta did not address Heritage’s behavior, instead appearing to criticize the fact that the company was fined.
“Instead of sending more money to the state coffers if there are more of these types of penalties, the CFO is interested in exploring legislative solutions where the money returns to policyholders through additional rate relief,” Galetta said.
Patronis, state lawmakers and the industry have repeatedly blamed “frivolous” lawsuits by policyholders for causing Florida’s insurance crisis. Lawmakers and Gov. Ron DeSantis’ main response to the crisis was to make it harder to sue insurers, a move former President Donald Trump called a “bailout” for the industry.
Florida officials have never studied how many of these lawsuits were triggered by insurers’ bad behavior. Heritage was one of the companies accused by some of its adjusters of manipulating reports to pay policyholders less in a claim, according to The Washington Post. That allegation is not addressed in the state regulators’ report.
“This is what people like me, consumer advocates, have been trying to convey to legislators for years,” said Rep. Hillary Cassel, D-Dania Beach, a lawyer who worked for insurance companies but now represents policyholders.
“This is your behavior, this is your pattern and practice, this is your business model,” Cassel said. “Treating consumers poorly and not helping them in their time of greatest need, despite paying the highest home insurance premiums in the country.”
