Profit-Maximizing Scheme Puts Homeowners At Higher Risk As Florida Regulators Fail To Act
FLORIDA – Unlocking America’s Future is warning that Florida’s property insurance market has become a minefield for homeowners, with emerging evidence that policyholders are being systematically exploited by companies that may lack the resources to pay claims when disasters occur. A CBS News report recently documented how state policies have pushed homeowners into newly-formed insurance carriers that allegedly redirect premium revenue to corporate partners outside Florida—funds that should remain available to cover future losses.
A new Government Accountability Office (GAO) research report identified Florida as one of the most expensive states for home insurance, with the highest percent increase, in the nation. The report noted that home insurance rates continued to climb after tort reforms were passed in 2022, which limited policyholders’ ability to hold insurance companies accountable for wrongfully denied claims. A state report done by Unlocking America’s Future last year identified many of the same issues in Florida.
At the center of the issue is Trident Reciprocal Exchange, a Lake Mary insurer launched in 2024, where the accusations came not from rank-and-file employees but from the company’s own former chief executive and chief financial officer. These whistleblowers allege that Trident has been channeling millions in policyholder premiums to investor groups rather than maintaining those funds for claim payments, creating potential insolvency risks for both the carrier and its customers.
“Florida’s insurance market has become a bait-and-switch operation where families pay ever-increasing premiums to companies that may not be there when disaster strikes,” said Kyle Herrig, Unlocking America’s Future. “Policyholders are being transferred to inexperienced carriers, watching their costs climb year after year, while learning that their premium dollars are being transferred to affiliated businesses in other states. At the same time, regulators refuse to disclose whether these companies have passed basic financial stability tests, leaving families completely in the dark about their insurer’s ability to pay claims.”
This pattern extends well beyond a single company, it’s become the profit-maximizing business model used in the state. State officials have systematically transferred policyholders away from Citizens Property Insurance Corp. — the state-backed insurer of last resort — into the private market, often placing them with carriers that have minimal operating history. Instead of household names with decades of claims-paying experience, tens of thousands of Florida families now depend on companies that were incorporated within the past few years, raising fundamental questions about these insurers’ capacity to handle widespread damage from a major storm. Despite the skyrocketing costs, claims denials, and corruption, state insurance regulators along with the governor have failed to act.
Compounding these concerns is Florida’s refusal to make basic financial information available to consumers. The state conducts financial stress analyses to determine whether insurers could withstand major hurricane losses, but keeps these results confidential. Policyholders have no way to learn whether their own carrier has failed these evaluations, forcing them to pay premiums to companies whose financial stability remains unknown until a crisis reveals the truth.
Without immediate regulatory intervention and real transparency requirements, thousands more homeowners will find themselves paying for coverage that evaporates the moment they need it most. Unlocking America’s Future and Florida state leaders demanded Governor DeSantis hold home insurance companies accountable after releasing a report exposing the extent of this risk and affordability crisis.
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