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How “Cherry-Picking” Policies Affects Florida’s Insurance Landscape


In a recent podcast episode, the discussion turned to the seemingly straightforward process of establishing an insurance company in Florida. As the conversation unfolded, Bruce Lucas, on his podcast, shed light on the intricacies of this venture, revealing insights into the world of insurance policies and the state’s unique approach to insurance management.

Lucas, a former corporate attorney turned insurance executive, outlined the practice of “cherry-picking” policies, which has played a pivotal role in his journey to success in the insurance industry. Through his tech-insurance start-up, Slide, Lucas has capitalized on this system, strategically selecting favorable policies from Florida’s state-run Citizens Property Insurance Corp.

Understanding the Takeout System:

The takeout system, implemented by Florida officials approximately 30 years ago, was designed to reduce the exposure of Citizens, the state’s insurer of last resort, and attract new carriers to the market. This system allows insurers like Lucas to assume thousands of policyholders and millions in premiums without incurring fees or acquisition costs.

While this approach has propelled Lucas and others to prominence in the industry, it has also had profound implications for homeowners across the state. The takeout program, while intended to foster competition and stability in the insurance market, has left many residents grappling with exorbitant premiums, inadequate claims handling, and prolonged processing times.

The Fallout for Homeowners:

The repercussions of Florida’s insurance crisis are evident in the struggles faced by homeowners, particularly in the aftermath of natural disasters like Hurricane Ian. With over half of the carriers participating in the takeout program going insolvent over the past two decades, homeowners have been left vulnerable to disruptions in coverage and unresolved claims.

For many residents, the cycle of being shuffled between insurers has led to financial strain and emotional distress. The story of Scott and Bonny Jonas, who endured the aftermath of Hurricane Ian only to face uncertainty with their insurance coverage, underscores the challenges confronting homeowners in Florida.

Looking Ahead:

Despite the complexities and controversies surrounding Florida’s insurance market, Lucas remains optimistic about the future of Slide and the broader industry landscape. With recent legislative reforms aimed at addressing the state’s insurance crisis, there is hope for greater stability and resilience in the market.

However, critics warn that the new legislation may exacerbate the challenges faced by homeowners, further limiting their ability to seek recourse for unpaid claims and inadequate coverage. As insurers like Slide navigate these changes, the implications for homeowners remain a central concern.

Florida’s insurance landscape is marked by a delicate balance of opportunity and adversity, with stakeholders grappling with the complexities of regulation, competition, and consumer protection. As the industry continues to evolve, it is essential to prioritize the needs and interests of homeowners, ensuring that they have access to reliable coverage and fair treatment in the event of a crisis.

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