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Artificial intelligence is transforming industries across the globe, and insurance is no exception. From processing applications to evaluating damage assessments, AI technology promises faster decisions and improved efficiency. But as Florida homeowners are discovering, there is a dark side to this technological revolution: AI systems may be unfairly denying legitimate insurance claims without meaningful human oversight.
If you have filed a property damage claim in Florida and received a denial, you may be wondering whether an algorithm played a role in that decision. You are not alone. Florida lawmakers are now taking action to address growing concerns about AI insurance claim denial in Florida, pushing for regulations that would require human review before any claim is denied.
The Rise of AI in Insurance Claims Processing
Insurance companies have increasingly turned to artificial intelligence, algorithms, and machine learning systems to handle claims. Industry representatives argue that these technologies increase efficiency, improve accuracy, and lead to faster resolution for policyholders. However, consumer advocates and state regulators are raising serious questions about transparency and fairness.
According to the Florida Department of Financial Services, many consumers are not even aware that AI has been used to underwrite their coverage, deny their claims, or determine the amount of their settlement offer. This lack of transparency has become a focal point for legislative reform.
Florida’s High Denial Rate Raises Red Flags
The statistics paint a troubling picture. In 2024, Florida’s average homeowner insurance claim denial rate reached 46.7 percent, significantly higher than the national average. The Florida Office of Insurance Regulation attributed much of this to Hurricane Milton, which caused over $4.7 billion in estimated insured losses. More than 92,000 homeowners saw their claims denied for various reasons.
While not all denials involve AI, the growing use of automated systems in claims handling has raised concerns that legitimate claims are being rejected without proper human evaluation. When an algorithm makes the decision to deny your claim, you may never know why or have the opportunity to present your case to a real person who can exercise judgment and compassion.
New Legislation: House Bill 527 and Senate Bill 202
Florida lawmakers are now pushing back against AI-driven claim denials. House Bill 527, sponsored by State Representative Hillary Cassel, would mandate human involvement in property insurance claims denials. The bill has already passed a key House subcommittee and is moving through the legislative process.
Under the proposed legislation:
- A carrier’s decision to deny a claim or any portion of a claim must be made by a qualified human professional, not solely by an AI system or algorithm.
- Insurance companies must identify the human professional who made the decision to deny the claim.
- Insurers must include a statement confirming that AI, algorithms, or machine learning were not the sole basis for denying the claim.
- Companies using AI in claims handling must detail in their claims handling manual how these systems are used and how they comply with the law.
The companion bill, Senate Bill 202, contains similar provisions and would require insurers to keep records documenting the professional responsible for each denial decision.
Why Human Review Matters for Your Claim
Insurance claims often involve nuanced circumstances that algorithms may not fully understand. A sudden pipe burst might look similar to gradual water damage in a database, but the distinction is critical for coverage. A human adjuster can ask questions, consider context, and exercise professional judgment that an AI system simply cannot replicate.
Representative Cassel has noted that when AI is used to deny claims without human oversight, many of those denials contain errors. The genesis of this bill came in part from concerns raised after reports that some health insurers using AI had error rates as high as 90 percent on denials reviewed by human professionals.
What to Do If Your Claim Has Been Denied
If you have received a claim denial from your Florida homeowners insurance company, take the following steps:
- Request a detailed explanation of the denial in writing, including the specific policy language cited as the basis for the decision.
- Ask whether AI, algorithms, or machine learning systems were used in evaluating your claim.
- Document all communication with your insurance company, including dates, times, and the names of representatives you speak with.
- Gather additional evidence to support your claim, including photos, videos, contractor estimates, and expert opinions.
- Consult with a Florida property damage attorney who can review your policy and help you understand your legal options.
How Krapf Legal Can Help
At Krapf Legal, we understand the frustration of dealing with an insurance company that seems more interested in protecting its bottom line than honoring its obligations to policyholders. Whether your claim was denied by a human adjuster or an algorithm, you have the right to fight for the compensation you deserve.
Our experienced Florida property damage attorneys can review your denial letter, analyze your policy, and help you build a strong case to challenge an unfair decision. We work on a contingency fee basis, which means you pay nothing unless we recover compensation on your behalf.
If you believe your Florida insurance claim was unfairly denied, contact Krapf Legal today for a free consultation. Do not let an algorithm stand between you and the coverage you paid for.
