News Source: FOX 13
Author: Briona Arradondo
Date: May 19, 2021
TAMPA, Fla. – With state approval, three Florida companies will drop home insurance policies for more than 50,000 homeowners just as hurricane season starts.
The state says the companies are trying to stay afloat financially.
The three insurers that recently filed their requests are Universal Insurance of North America, Gulfstream Property and Casualty, and Southern Fidelity Insurance. Two of the companies have offices in the Tampa Bay area.
In the consent order for Universal Insurance, the company reported net losses in the millions. Now that the state approved the moves, the companies will send out early cancellations with 45-day notices and not renew other policies, affecting more than 50,000 customers in Florida.
The Federal Association for Insurance Reform (FAIR) said Florida’s property and casualty insurance market has struggled financially for the past four or five years.
“This is impacting reinsurance costs. Reinsurers since they’re paying out more in claims, they’ve been looking for greater premium and that rolls down obviously to the consumer,” said Paul Handerhan, president of FAIR.
Insurance experts said roofing schemes, more hurricane claims and lawsuits are all to blame.
A spokesperson for the Florida Office of Insurance Regulation told FOX 13 via email “The Florida insurance market is one of the most complex in the world and the property market is currently facing significant challenges as the frequency of claims increases and those claims become more expensive. These challenges are largely due to increased litigation, exacerbated by higher catastrophe claim losses as a result of multiple hurricanes over the past several years, and rising reinsurance costs as a result of a hardening reinsurance market. These developments have presented challenges not only to the property industry, but also to Florida consumers.”
Industry experts expect more notices are coming.
“This is just a start of a trend. You’re going to see other Florida property insurers that primarily write Florida homeowners business, they’re also going to go before the Office of Insurance Regulation. This is going to happen over the summer,” said Mark Friedlander, the director of corporate communications with Insurance Information Institute. “They need to shape up their books of business in order to keep operating.”
Friedlander shared what Florida homeowners can do if they get a notice.
“Our first piece of advice is don’t panic. Call your insurance professional, your insurance agent as soon as possible and they should already be aware of it,” said Friedlander.
Riskier homes are more likely to get removed, so insurance trade groups said improve what you can for better coverage.
“I would encourage those homeowners, if they have the financial means to do so, is put on a new roof, get your electrical up to date,” said Handerhan. “Once your house is at a certain level and it becomes attractive again, then you may qualify for coverage from those private insurers.”
The Florida Office of Insurance Regulation said homeowners impacted will get help finding new coverage. The state said they did not make this decision lightly, but the state said the cancellations let the companies stay in business and protect the public and policyholders.