Disturbing Reports of Insurance Companies Altering Claims to Reduce Hurricane Payouts Deserve An Immediate Investigation

It has come to light that certain Florida insurance carriers have allegedly altered field adjusters’ damage estimates from the 2022 hurricane season to lower policyholder payouts. Keep in mind, these are the same insurance companies that received more than $3 billion dollars in government bailouts from Florida Republican lawmakers in 2022. A recent Washington Post story exposed that Florida-based Heritage Insurance Co. and Florida Peninsula Insurance had altered field adjuster estimates to favor themselves. The American Policyholder Association (APA) has also discovered compelling evidence suggesting multiple instances of systematic criminal fraud perpetrated to cheat policyholders out of fair insurance claims and plans to refer the matter to regulators in Florida and other states.

These startling allegations emerged in December when three independent field adjusters testified at a Florida House of Representatives hearing. They accused insurance companies of altering reports on homes damaged by Hurricane Ian, drastically reducing repair estimates by up to 80%, removing sections, and changing wording without the adjusters’ consent. Despite the seriousness of these allegations, Florida’s Department of Financial Services has disappointingly closed the investigation, citing a lack of participation by witnesses.

Allegations of Insurance Nonpayments in Florida have emerged following Hurricane IanIn one example, a field adjuster estimated that a Venice, Florida, home would need about $200,000 in repairs after Ian hit the area in September. The roof had been ripped off, causing extensive damage to the interior. But the revised report from Tampa-based Heritage Insurance indicated the damage was less than $25,000. After the deductible, the payout to the policyholder was a few thousand dollars.


The same insurance companies that are accused of manipulating field adjusters’ estimates had the audacity to approach the state for financial help, which led to two bailouts of the insurance industry in late 2022. At the time, the insurance companies painted themselves as victims of unforeseen circumstances and convinced the legislators to grant them a financial lifeline. Little did we know, these companies were simultaneously involved in alleged fraudulent activities.

The first bailout came in May, when a legislative Special Session was held to “stabilize” the Florida insurance market. Florida Insurance companies walked away with access to $2 billion dollars from Florida’s general revenue fund. Legislators created the Reinsurance to Assist Policyholders (RAP) Program, which provided extra protection to insurance companies against hurricane losses for the 2022 hurricane season. Insurance companies ended up utilizing those funds to pay claims for both Hurricane Ian and Hurricane Nicole.

In the second Special Session in December, legislators took another $1 billion dollars from the general revenue fund to create the Florida Optional Reinsurance Assistance (FORA) Program for the 2023 hurricane season. The FORA program offers reinsurance at a discount from market rates. Senate President Kathleen Passidomo summed up the reason for the bills in a memo.

“We also want to make certain that when damage occurs, claims are paid promptly and fairly, so homeowners do not have to contend with time-consuming and expensive litigation.” Kathleen Passidomo


Property insurance companies in Florida have been paying excessive executive compensation packages and stock dividends for years, which has contributed to their financial mismanagement. This has led to insurers blaming fraud and litigation costs for their losses and rate increases, while continuing to pay out generous dividends. Three such companies are Heritage Insurance, United Property & Casualty, and Universal Property & Casualty.
Heritage Insurance’s former chairman, Bruce Lucas, received $78 million in compensation from 2013 to 2020, with $27.2 million in 2015 alone. The company has experienced significant losses in recent years and is trying to exit the Florida market.

Universal Property & Casualty, under Universal Insurance Holdings, paid its former CEO, Sean Downes, annual compensation packages reaching up to $25 million. The company has experienced financial decline and posted a net loss of $72 million for the third quarter of 2022.

Moreover, it is imperative that our state legislators thoroughly vet the recipients of financial assistance in the future. The fact that these small insurers received taxpayer-funded support while engaging in fraudulent activities is a slap in the face to the hardworking citizens of our state.

Read the Merlin Law Group CEO Insurance Compensation Analysis

In light of this alarming situation, we urgently call upon Florida state regulators and the state attorney general to thoroughly investigate these accusations of insurance company employees tampering with insurance adjuster reports to the detriment of policyholders. Given the substantial evidence presented by the APA and the testimonies of independent adjusters, there is a strong case for potential criminal charges against insurance company officials. It is imperative that Florida authorities, including the Florida Department of Law Enforcement and local prosecutors, act decisively to ensure that policyholders receive the fair treatment they deserve and that insurance claims are properly handled. The time to act is now, as public trust in the insurance industry hangs in the balance.