Property insurers will likely continue to deny property insurance claims following major natural disasters such as hurricanes Milton and Helene, according to insurance ratings firm Weiss Ratings.

Hurricane Milton struck Florida last week, killing at least 16 people and leaving millions without power. It came not long after Hurricane Helene devastated six states and killed more than 200 people. Now said Dr. Martin Weiss, founder of Weiss Ratings, said the trend of defaults on applicants was likely to continue – although insurance companies have strongly denied this.

“In the long term, we are observing a worsening trend in the rejection rates of property insurers. This trend will at least continue,” said Dr. White Newsweek. “Given this year’s jump in claims, insurers will inevitably come under even greater pressure to reject legitimate claims, potentially accelerating the worsening trend.”

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The comments come after Weiss released a report in June that found that nearly half of all Florida homeowners' injury claims last year were with three of the state's major providers – Castle Key Indemnity, State Farm and Castle Key Insurance. did not result in a payment.

According to Weiss Rating's analysis, Castle Key Indemnity Company denied 47.1 percent of claims closed in 2023, the highest denial rate among insurers in the state. State Farm Florida Insurance Company denied 46.4 percent of closed claims, while Castle Key Insurance Company denied 46 percent of claims during the same period. The insurers disputed this, saying the data was inaccurate.

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Newsweek Allstate, the parent company of Castle Key Indemnity and Castle Key Insurance, contacted Allstate for comment on Friday, October 11th.

a State Farm spokesperson said Newsweek: “The Florida paid claims data cited is inaccurate, incomplete, and presented in a manner that artificially underrepresents payments to our customers. The information is carefully selected to provide an inaccurate representation.”

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“As a company, we take great pride in our customer service and are committed to resolving our debts promptly, courteously and efficiently. Many factors affect claim payouts, including the type of loss and the amount of a customer's deductible or hurricane deductible. During weather events, the cause of the loss is a flood, which is excluded from homeowners insurance. If a person does not have flood insurance to cover this damage, the policyholder may file a claim with his or her insurance company to obtain the necessary documentation to track the claim and receive federal assistance.”

Mark Friedlander, director of corporate communications at the Insurance Information Institute, agreed with State Farm Newsweek that “insurers like Milton act as financial first responders for their customers when disasters strike, helping their policyholders recover as quickly as possible” and that “they honor their promise to cover claims in exchange for the premiums their customers pay.” pay.”

He said Weiss Ratings “selected the insurance claims data without context” and that the results “in our opinion lack validity.”

“The Florida insurers accused of failing to pay claims are among the industry's highest-rated companies for their claims handling and customer service. That’s why they maintain their role as industry leaders,” he said. “There are a variety of reasons why a property insurance claim may settle without payment. Most likely, this is primarily flood damage that is not covered by standard property insurance, condo insurance, or flood insurance. You need flood insurance to cover flood damage.”

When asked about State Farm and Friedlander's position, Dr. White Newsweek: “The data State Farm refutes comes directly from its own annual statutory financial reporting to the NAIC (National Association of Insurance Commissioners). If they dispute the accuracy of their own data, we would ask why they failed to submit it.” In addition, we would appreciate a comprehensive data set on each claim and the reasons why it was closed without payment if they did would like to contact us.

State Farm's NAIC filing as seen by Newsweekshows the same number of denied claims reported by Weiss Ratings. In 2023, State Farm received a total of 19,022 claims, of which 8,829 were settled without payment, representing 46.4 percent.

Why insurance claims are rejected

Insurance claims can be denied for a variety of reasons, including insufficient information, missed premium payments, fraudulent claims, or missed filing deadlines. The Weiss Ratings report does not elaborate on the reasons for rejecting these claims.

Florida homeowners who filed claims with other insurance companies faced similar difficulties. According to Weiss Ratings, half of the 40 insurance companies analyzed failed to pay at least 30 percent of claims. Additionally, three smaller insurers – Kin Insurance Network, American Integrity Insurance Company of Florida and PURE Specialty Exchange – failed to pay on over 40 percent of claims closed in 2023, at rates of 44 percent, 43.9 percent and 40.5 percent, each.

Newsweek also contacted Kin Insurance Network, American Integrity Insurance Company of Florida and PURE Specialty Exchange for comment via email on Friday, October 11.

“With increasing property damage from storms and record-breaking insurance company bankruptcies, this high number of claim denials significantly worsens the plight of Florida homeowners,” said Dr. Weiss said in a press release at the time.

Florida residents face some of the highest home insurance rates in the United States. According to Bankrate, the average cost of insurance for a home worth $300,000 as of October 2024 is $5,527 per year – much higher than the rate for a home of the same value in 2024 in neighboring Georgia ($2,071) and Alabama ( $2,745).

The average home insurance premium in Florida is $3,242 more expensive than the national average of $2,285. In some areas the cost can rise to over $8,000. The national average is second only to Nebraska, where the average premium for a $300,000 home is $5,652.