Risk Management expert: Florida is battling 'widespread insurance fraud driven by a small group of bad actors'

Alfredo Sprecace, a risk management expert at Road Safety Risk Management, has highlighted concerns over insurance fraud and legal abuse as contributing factors to the high premiums and insurer departures in Florida's homeowners insurance market. He expressed these views on LinkedIn.

"Florida has been battling a silent crisis, widespread insurance fraud driven by a small group of bad actors," said Sprecace, according to LinkedIn. "Skyrocketing premiums for everyday homeowners. Florida accounts for nearly 80% of all homeowners insurance lawsuits in the U.S. yet we only make up 8% of the national market. The true cost isn't just financial, it's the stress homeowners feel at renewal tim."

Florida is responsible for nearly 80% of all homeowners insurance lawsuits in the United States, despite representing only about 8% of the nation’s homeowners insurance policies. According to Bankrate, this disproportionate level of litigation significantly impacts the ongoing challenges within Florida’s homeowners insurance market, leading to instability.

According to Oliver Reports Florida, since legislative reforms in 2022–2023, there has been an influx of new property and casualty insurers entering the Florida market. This includes multiple reciprocal insurance exchanges such as Ovation, Manatee, Condo Owners (CORE), Orange, and Trident. These new carriers have collectively introduced over $1.25 billion in new capital, enhancing underwriting capacity and providing competitive options for consumers. The growth of reciprocal entities reflects renewed market confidence following reforms aimed at curbing litigation and fraud.

Rating agency KBRA reported that the reciprocal model’s member-owned structure helps absorb claims risk and aligns incentives between insured homeowners and policyholders. Trident Reciprocal Exchange, a newly established reciprocal insurer in Florida, received a BBB insurance financial strength rating with a stable outlook due to its low underwriting leverage, substantial surplus relative to projected premiums, and favorable market conditions stemming from litigation reforms.

Sprecace is currently employed as a risk manager at Road Safety Risk Management in Fort Lauderdale, Florida. His roles on LinkedIn include Risk Manager since January 2023 and Risk Analyst since March 2021. He has prior experience in sales, international commerce, and after-sales support; he holds a degree from the University of Florida. His expertise lies in risk management and insurance with approximately nine years of professional experience.