News Source: CBS12 News
Author: Lexi Nahl
Date: May 18, 2021
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BOCA RATON, Fla. (CBS12) — Three major Florida-based insurance companies will be dropping tens of thousands of customers as hurricane season approaches.
The companies, Universal Insurance Co. of North America (UICNA), Gulfstream Property & Casualty, and Southern Fidelity Insurance Co. were approved by the state regulators to drop more than 50,000 combined home insurance customers amid ongoing financial struggles.
Paul Handerhan, president of the Federal Association for Insurance Reform tells CBS12 News that litigation costs and inflation are partly to blame for the financial troubles. To stop the bleeding, insurance companies have been limiting their exposure in Florida markets for years.
“If you look at the marketplace, it’s been a very tough market for the property and casualty insurers operating in this state,” Handerhan said.
On the path to profitability, Handerhan says the ‘riskiest’ policies will likely be the first to go. That includes properties with older roofs, electrical systems, and other high-ticket items that could cost an insurance company.
“In the eyes of the insurers, they’re viewing those properties of having the greatest possibility of incurring damage,” Handerhan said.
Handerhan says customers who are affected will likely receive non-renewal notices 90 days before the policy is dropped.
And as thousands of Florida customers await these notices, many will be shopping for new policies in a market where insurance premiums are continuing to rise.
“You’re going to have less choice in this marketplace at a higher cost” Handerhan said.
Still, real estate experts like Bonnie Heatzig say it’s important not to panic if you are holding one of these policies – but to think proactively.
“I would say hop on the bandwagon, start getting other quotes and consider other insurance immediately,” Heatzig said. “There are insurance companies out there who can still provide you with coverage to meet your requirements.”
But Universal customers like Justin Whealen are concerned that finding a reasonably priced policy during hurricane season would be a challenge.
“It would definitely be a headache,” Whealen said. “I hope they tell me soon. I live in Boca and it seems like my taxes are already going up each year.”
Experts predict many policy holders will be forced to buy a policy from the “insurer of last resort” – the state-owned Citizens Property Insurance Corp.
If you hold a policy through UICNA, Gulfstream Property & Casualty, or Southern Fidelity Insurance Co., Handerhan recommends keeping an eye out for a non-renewal notice so you can begin shopping around for affordable insurance options and new agents if necessary.
“They’ve already been sending them and they’ll continue,” Handerhan said. “If I was a property owner and you see a letter or something from your insurance company, open it.”