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Politicians across the political spectrum agree: The Florida property insurance market is catastrophically dysfunctional.
Politicians can't agree about how to fix it -- or whose fault it is.
Those two questions are coming up in a big way in this year's contest for U.S. Senate. Democratic challenger Debbie Mucarsel-Powell is hoping to unseat Rick Scott, the Republican incumbent who oversaw state insurance policy for eight years as governor.
Mucarsel-Powell says Florida's insurance woes started under Scott.
"Under Rick Scott's self-serving agenda, Floridians across the state were crushed by skyrocketing insurance rates and an affordability crisis while he raked in millions and rigged the game in favor of his donors," Mucarsel-Powell wrote in a statement.
Scott's team strongly disputed this characterization, arguing that Mucarsel-Powell didn't criticize Scott for his property insurance policies when she ran for Congress in 2018.
"Debbie isn't credible or honest," Scott spokesperson Will Hampson said in a statement. "Property insurance costs are a major issue in our state and Floridians expect leaders who will solve problems, like Senator Scott has done, instead of screaming insane lies."
Lawmakers and industry experts say Scott's policies as governor did not help create a stable insurance market, but other factors outside his control have had a bigger effect on consumers. A June survey conducted by Florida Atlantic University found that the greatest share of surveyed voters blamed Gov. Ron DeSantis for the insurance crisis -- not Scott.
During his eight years in office that began in 2011, Scott tried to foster the growth of private insurance companies by moving Floridians off policies offered by the publicly-backed Citizens Property Insurance Corp. But instead of creating a healthy private marketplace, Scott's moves encouraged undercapitalized companies to set up shop here.
Of the 25 companies that state records say were approved to take on Citizens plans from 2013-18, more than half have either left Florida, cut back on business here or folded. (Most of the companies that folded did so years after Scott left office.)
"Rick Scott is a true believer in the private sector and private enterprise. And that's great," said Mike Fasano, the Republican Pasco County tax collector and former state representative who criticized some of Scott's moves at the time. "But at some point, you have to come to the realization that in this case, it's not going to work."
In Tallahassee, Scott had a big idea about how to improve Florida's insurance market, and his team worked tirelessly on it.
Citizens, which the state created in 2002 as an insurer of last resort for homeowners, had grown too large in Scott's view. The state-backed nonprofit was holding well over 1.4 million policies, a figure that Scott worried could lead to a financial disaster if a major hurricane hit. If Citizens couldn't afford to pay out claims made by homeowners, the company would have to charge policyholders a costly assessment.
Barry Gilway, whom Scott hired to lead Citizens in 2012, said Scott summoned him to his office on Gilway's first day as Citizens CEO. He met with the governor about every two weeks on average afterward. (Gilway also served for three years under DeSantis but said he has never met him.)
"He just said 'Look, you have a job to do here. I'm going to be on your case every single week until you get this thing under control,'" Gilway said.
Depopulating Citizens, Gilway's main task, was not in itself controversial. The way Scott went about it was.
He signed a bill in 2011 that, in part, erased the cap on premium increases for Citizens sinkhole coverage. That caused premiums on that type of coverage to skyrocket -- intentionally, with the hope of sending Floridians to the private market.
Citizens then began a campaign to double-check homes that had already been approved by state-sanctioned inspectors as ready for a major storm. About 250,000 homeowners who had been approved for insurance discounts saw their savings called into question and, in many cases, reversed. That meant a windfall for Citizens, but a headache for its customers.
Under Scott, Citizens also crafted a series of incentives for companies in exchange for taking on Citizens customers. Most notably, the board approved a plan to pay the fledgling Heritage Property & Casualty Insurance Co. up to $52 million in 2013 in exchange for taking on about 60,000 Citizens policies. Reporters noted at the time that the company had given Scott's political committee more than $100,000. (A Scott spokesperson said the deal was negotiated independently of the then-governor.)
As the private sector took on more and more of Citizens' burden, companies like Heritage were allowed to cherry-pick the least risky plans in Citizens' portfolio. In 2015, Scott vetoed a bill passed unanimously by the Legislature that would have allowed former Citizens customers to return to the state-backed insurer if their private rates went up by more than 10%.
By 2018, Scott had reduced Citizens' rolls to less than a third of the figure from when he took office.
Many of the private companies courted by Citizens failed. In 2015, Mount Beacon Insurance was approved to take on more than 172,000 Citizens policies. Within two years, the company had gone belly up. Half a dozen other firms that took on Citizens policies were put into receivership by the state after Scott left office -- essentially a death sentence for the companies.
Heritage paid its CEO more than $27 million in 2015 -- a year with no hurricanes in Florida -- then earlier this year got hit with a $1 million fine for failing to properly handle claims related to Hurricane Ian.
By 2022, Citizens had more than a million customers again. But this time, those customers had worse coverage -- and it cost more.
Gilway said some companies that took policies out of Citizens did not have enough money to survive. Companies had to meet the state's minimum $15 million in surplus -- a baseline widely considered to be far too low that still persists today. But the minimum attracted investors, Gilway said.
"No question he could have required [the Office of Insurance Regulation] to strengthen the capital requirements," Gilway said.
But, he added, "Any allegation that Rick Scott was responsible for this insurance cycle is really misguided."
Scott has been criticized for his appointment in 2016 of David Altmaier as the state's insurance commissioner. Altmaier took a hands-off approach to regulating insurers, a trend DeSantis' commissioner has reversed.
Altmaier, who is now a lobbyist for insurance interests, did not respond to requests for comment.
Property insurance wasn't a major campaign issue when Scott ran for U.S. Senate in 2018, noted Jimmy Patronis, a Scott ally and the state's chief financial officer. That's because consumers weren't feeling the worst of the current crisis until after Scott left office.
Numerous factors outside of Scott's control contributed to the current hole in many Floridians' pocketbooks. Post-COVID inflation made building and, eventually, borrowing more expensive, causing companies to raise rates. The insurance industry blamed rising premiums on pricey and rampant litigation.
And, most importantly, Florida's 12-year hurricane drought ended in 2017. Since then, Florida has been battered by expensive storms: 2022's Hurricane Ian was the third-costliest in recorded history. The fact that people keep flocking to expensive properties in risky areas is at the core of Florida's insurance woes.
"I think it's pretty ridiculous for [Mucarsel-Powell] to blame the property insurance crisis on one period of time or one individual," Patronis said.
Scott's playbook also wasn't entirely novel. Former Insurance Commissioner Bill Nelson, a Democrat, shed nearly 900,000 policies from Citizens' predecessor in the late 1990s, in part by paying companies to take policies.
"The solution is not to say 'We're going to depopulate Citizens,' shove everybody into a raggedy insurance company and hold a press conference," said Sean Shaw, a Democratic former state representative and state Insurance Consumer Advocate.
Both Scott and Mucarsel-Powell are running in part on fixing the insurance crisis. If Scott wins, he could play a major role in doing so: He's also running for Senate Republican leader, a title that would give him broad authority over the Republican agenda in the Senate.
Scott blames inflation on runaway government spending in Washington, which he's hoping to fix. He also introduced a bill that would allow homeowners to deduct up to $10,000 in homeowner's insurance from their taxes. And in a 2023 op-ed, Scott urged state leaders to once again shrink Citizens' rolls to a more sustainable number.
In May, Mucarsel-Powell backed a proposal to allow insurers to buy less comprehensive reinsurance, which she says would cut down on premiums. She says she would fight inflation by taking on corporations who charge too much for goods or services.
Both candidates' proposals are modest. To dig out of the crisis, much of the change must come at the state level, industry observers acknowledge. And even there, solutions are hard to come by.
"I'm not here to tell you I know the solution," Shaw said. "I don't know it. I'm just here to tell you what we have done hasn't worked."