A Growing Crisis in Florida Coverage

Florida’s ongoing insurance crisis has left more than half a million homeowners relying on Citizens Property Insurance Corporation, the state’s insurer of last resort. As private carriers withdraw and premiums skyrocket, Citizens has become the only option for many. But troubling new data shows that when policyholders challenge property insurance claim denials, the deck is stacked against them.

According to ProPublica and the Sun Sentinel, Citizens wins more than 90% of cases brought before the Division of Administrative Hearings (DOAH), compared to just 55% when disputes go through circuit court. For many homeowners, that difference determines whether they can afford to rebuild—or are left with devastating out-of-pocket costs.

A Growing Crisis in Texas Coverage

Texas homeowners are facing yet another hurdle in the state’s insurance crisis. In May, Lemonade announced it would no longer sell new home and condo policies in 12 counties. Just two months later, it expanded that list to include several major counties like Collin, Denton, Abilene, and Lubbock (Turek, Yahoo News, 9/8/25).

This move puts Lemonade alongside other insurers like Farmers and Progressive that have scaled back their property insurance coverage across Texas. The reason? Catastrophic weather risk.

For homeowners who rely on their policies to safeguard against hail damage, windstorm claims, and hurricane losses, these sudden exits leave families exposed and scrambling for alternatives.

What’s at Stake for Homeowners

The January wildfires destroyed nearly 17,000 structures and left thousands of others standing but damaged by toxic smoke and soot. Many homeowners submitted property insurance claims for professional cleaning or structural repairs. Instead, they’ve been told their policies only cover losses that meet a narrow definition of “distinct, demonstrable and physical alteration.”

For policyholders, this often means insurers argue that remediation is unnecessary or that basic cleaning is sufficient even when independent industrial hygienists find carcinogens and particulates in the home.

a Los Angeles Times review of denial letters, policyholders have been denied coverage for smoke damage, drywall removal, insulation replacement, and other building materials even when testing revealed toxic contamination inside homes (LA Times).

What the Lawsuit Alleges

According to the complaint, plaintiffs sustained roof damage from hail between March and June 2025. Many also reported subsequent interior issues like ceiling stains and drywall damage due to delayed repairs. Despite being fully insured under what they believed were comprehensive homeowners policies, their claims were denied with little explanation.

The complaint further states that State Farm’s insurance adjusters and agents misrepresented policy coverage, specifically, that hail damage would be included. These homeowners, some of whom have been with State Farm for over two decades, now find themselves paying out of pocket for roofing and structural repairs they expected would be covered.

Damages in the complaint are estimated between $18,000 and $20,000 per property. In addition to roof damage, many of the homes sustained water damage to personal belongings, insulation, and even HVAC system components.

Real Estate Meets Reality

Paul Epperley, president of the Greater Fort Worth Association of Realtors, told the Star-Telegram that many buyers are caught off guard when they see their projected insurance premiums. “I do feel like there are people that just either drop out or they drop down,” he said, referring to prospective buyers walking away altogether due to rising insurance costs.

Allegations of a Coordinated Industry Pullout

According to one of the lawsuits, insurers engaged in an “illegal scheme” by simultaneously withdrawing or halting new business in fire-prone areas beginning in early 2023. The lawsuit, filed on behalf of homeowners who lost their homes in the devastating January wildfires, claims this coordinated retreat violated California antitrust and unfair competition laws. The wildfires destroyed nearly 17,000 structures and resulted in at least 30 fatalities, leaving survivors struggling to rebuild with insufficient coverage.

The second lawsuit seeks broader damages for any policyholder forced onto the FAIR Plan after January 2023. The FAIR Plan caps residential coverage at $3 million, which for many homeowners falls far short of the cost to replace or rebuild homes in California’s inflated real estate market.

“By colluding to push plaintiffs and so many like them to the FAIR Plan, the defendants have reaped the benefits of high premiums while depriving homeowners of the full coverage they were ready, willing, and able to purchase,” said attorney Michael J. Bidart, representing the homeowners (KCRA News).

The Shifting Landscape of Roof Coverage

One of the biggest changes Minnesota homeowners are now facing? A dramatic shift in how insurers handle hail damage and roof claims.

“Hail losses, specifically as it relates to roofs, are some of the biggest cost drivers right now,” said Aaron Cocking, an insurance industry lobbyist. To recoup losses, insurance companies are increasingly prorating roof claims—meaning the amount they’ll pay depends on the age of your roof—and applying separate deductibles based on damage type, rather than using a single, standard deductible.

This practice mirrors what we reported in Texas, where we covered how increasingly complex policy language and selective coverage limitations are leading to widespread confusion—and in some cases, outright denial of valid claims.

Homeowners Are Often Unaware Until It’s Too Late

“Many homeowners think, ‘I’ve got home insurance—I’m covered,'” said Cocking, “but they don’t actually read into it.”

This is a dangerous assumption, and one that’s exploited all too often. As noted in our recent coverage of the Texas insurance crisis, more and more policyholders are learning—after damage occurs—that their policies exclude or drastically underpay storm-related repairs.

Dan Walrach, a Minnesota-based contractor, echoed this concern. “Read your policy,” he advised. “If you don’t know how to read your policy, find someone to help you read it.”

How Bad Is the Insurance Crisis in Texas?

For homeowners like John Cobarruvias, who has lived in Clear Lake since 1989, the increases are unsustainable. He once paid $750 per year for home insurance with a $500 deductible. Today, his premium has skyrocketed to $6,000 annually with a $9,000 deductible—making him question whether keeping insurance is even worth it (ABC13 Houston).

Cobarruvias isn’t alone. ABC13 Investigates analysis of Texas Department of Insurance data found that the number of rate increases by insurance companies has more than doubled over the past decade. Even more concerning, the state found no issues with most of these increases, meaning homeowners have little recourse to challenge these soaring costs.

State Farm’s Appeal & The Court’s Ruling

State Farm attempted to overturn the verdict, employing several arguments in an attempt to reduce its liability. Among their primary claims, they contended that Ms. Ladkin should not recover damages exceeding the appraisal award, and they argued that the evidence presented did not justify the treble damages awarded. Additionally, they challenged the trial court’s exclusion of certain expert testimony, asserting that it would have bolstered their position. Finally, they claimed that the appellate attorney’s fees granted to Ms. Ladkin’s legal team were excessive.

Despite their efforts, the Second Court of Appeals found that most of these arguments lacked merit. The court upheld the jury’s findings regarding actual and treble damages, reaffirming that the insurer’s bad faith conduct warranted the significant financial penalties. The only aspect of the ruling that required further review pertained to the appellate attorney’s fees, which were remanded for further proceedings. The core takeaway? State Farm could not escape accountability for its failure to honor a valid claim.

This ruling reinforces a vital principle: insurers who engage in bad faith tactics cannot expect to evade justice through legal maneuvers. This case sets a clear precedent that insurance companies must be held accountable when they attempt to shirk their obligations to policyholders.

Understanding Why Claims Are Denied

While the Weiss report paints a concerning picture, insurance companies argue that the numbers are more nuanced than they appear. Many of the denied claims cited in the report were closed without payouts because:

• Damages Did Not Exceed the Deductible: Claims were below the policy’s threshold for coverage.

• Policy Exclusions: The reported damage was not covered under the specific policy.

Despite these explanations, the end result for policyholders remains the same—no financial assistance to repair or rebuild after damage.