Options continue to dwindle in Florida for those hoping to insure their property through a private company.
St. Petersburg-based Bankers Insurance Group said Monday it was pulling out of the Florida home insurance market because it said state lawmakers didn’t do enough in the session. special on home insurance to fight against fraud and litigation.
The company released a statement saying:
“This decision was difficult, but necessary for us to grow responsibly and maintain our long-term financial goals.”
It becomes at least the 16th insurance company in the state to drop policyholders, be declared insolvent, or stop writing new policies.
Policyholders with bankers, like all others, will be informed of the cancellation within the four-month period required by the State.
Meanwhile, 17 insurance companies — possibly more, based on other reports — in Florida will find out this week how much their ratings have been downgraded by ratings agency Demotech, which has sent letters to these affiliations last week to notify them of a rating change. .
Florida’s Office of Insurance Regulation (OIR) confirmed Demotech’s letters advising companies that their ratings will be downgraded from “A” to “S” (substantial) or “M” (moderate).
Mortgage providers Fannie Mae and Freddie Mac require homeowners to have a policy with an A-rated company. Those homeowners would be forced to find new insurers, potentially at higher costs, or face the risk of defaulting on their mortgages. .
Citizens Insurance, the state’s “last resort” option, seems like a viable option for many.
But only homes valued no more than $1 million in Miami-Dade and Monroe counties (and $750,000 elsewhere) would qualify for citizens’ criteria, as would individual condominium units with a combined cost of housing and contents replacement of $1 million or less.
In the meantime, you can check your current insurance company’s rating with Standard and Poor’s Ratings, by click here or by calling (212) 438-2400.
Tampa-based Southern Fidelity Insurance Co. was the most recent company to lose its financial stability rating, sending some 78,000 Florida homeowners seeking refunds and new stable companies.
All policies were canceled on July 15.
According to Insurance.com, the average premium for home insurance policies in Florida is $3,643 with a $1,000 deductible and a home value of $300,000. Homeowners in Miami-Dade County pay an average of $7,000 a year, according to Insurify, an insurance shopping site.
Southern Fidelity has become Florida’s fourth insurer declared insolvent since late February, following Lighthouse Property Insurance Corp., Avatar Property & Casualty Insurance Co. and St. Johns Insurance Co.
FedNat dropped 68,000 policies, nearly half of its customers, and Lexington Insurance pulled out of the state.
Several others have stopped writing new business in parts or all of Florida, including Florida Farm Bureau, TypTap, United, People’s Trust, Universal, Heritage, Progressive, Safeport and Wilshire, according to an ABC Action News report.
Earlier this spring, state lawmakers held a special legislative session to try to sort out what has become a chilling thought for many homeowners, especially those living along Florida’s coast.
Ratings agency Demotech announced in June that it had withdrawn Southern Fidelity’s financial stability rating and that the company could not purchase reinsurance, a critical back-up component for underwriters.
Earlier this year, auto and home insurance representatives at First Floridian were calling for a 22.9% rate hike for Legacy policyholders, citing, in part, “questionable” roof claims, expert claims public, inflation and the expected cost of new materials – while adding to the insurance woes for many companies at all levels.
Gov. Ron DeSantis in May signed new legislation aimed at helping consumers but also hopes to protect the insurance industry, which has seen two years of underwriting losses exceeding $1 billion each year, and businesses which have been declared insolvent.
The new law creates a $2 billion catastrophe reinsurance fund to allow insurers to purchase insurance to help protect against risk. Insurers should reduce policyholder rates to access the state reinsurance fund.
This plan also offers grants of up to $10,000 to equip homes to be less vulnerable to hurricane damage, if the homes meet certain criteria.
The new legislation also prohibits insurers from automatically denying coverage if the roof is less than 15 years old. Homeowners with roofs 15 years or older would be allowed to have themselves inspected before insurers deny them coverage.
If an inspection shows that a roof has at least five years of life remaining, insurers cannot refuse to issue a policy based solely on the age of the roof. If a roof is more than 25% damaged but already meets the state’s 2007 building code, it would only need to be repaired instead of replaced under a building code exemption created by the proposed legislation.