May 21, 2022
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Property insurance companies drop 50,000 Florida policyholders ahead of hurricane season

By on May 24, 2021 0

ORLANDO, Florida – Weeks into hurricane season, three home insurance companies are dropping more than 50,000 home insurance policies in Florida and some of those insured have yet to be notified.

This is the latest twist in the lingering Florida property insurance problem.

Angela Holland said she received a notice in the mail that her insurer was not renewing her policy.

“I haven’t filed an insurance claim for 25 years,” she said. “When I received the letter, I had just returned from COVID, I was in the hospital, and had to deal with trying to find insurance.”

Holland is by no means alone.

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The Florida Insurance Commissioner has approved three companies canceling or not renewing approximately 50,000 policies.

Gulf Stream Property and Casualty Insurance terminates over 20,000 policies as of June 28. Southern Fidelity cancels over 19,600 policies over the next 14 months and Universal Insurance Company of North America cancels over 13,000 policies as of June 29.

Holland was not insured with any of these companies but was also abandoned.

“Now was not the right time for me to have to deal with this,” said Holland.

Like many others, Holland turned to Citizens Insurance, which is backed by the state of Florida.

It is supposed to be the insurer of last resort, according to Michael Peltier, spokesperson for Citizen Insurance.

“When you’re supposed to be the insurer of last resort, and all too often, we become the insurer of first resort,” Peltier said.

Peltier says Citizen’s Insurance is increasing by thousands of policies per week.

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The company expects to reach around 700,000 policies by the end of the year.

With these numbers, some in the industry are wondering if Citizen’s could withstand a massive hurricane.

“We are financially strong and are able to manage these policies,” Peltier said. “But it is not a sustainable model.”

A spokesperson for the Office of Insurance Regulation wrote in a statement: “The Florida real estate market faces significant challenges due to increasing litigation and increasing losses from catastrophic claims at the aftermath of several hurricanes in recent years. “

In 2017 and 2018, Hurricanes Irma and Michael caused $ 20 billion in damage to Florida.

Mark Friedlander of the Insurance Information Institute agrees that the increase in litigation is also to blame for insurer insolvency.

“What we saw in Florida are over 100,000 property claims lawsuits filed against Florida real estate insurers in 2020,” Friedlander said.

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In 2019, Florida accounted for 8% of all homeowner claims initiated by insurance companies in the United States, according to the Florida Office of Insurance Regulations.

However, Florida accounted for 76% of all homeowner lawsuits against insurance companies.

“There is a major problem here,” Friedlander said.

The 50,000 policyholders abandoned by their insurers have not all been warned. If you are concerned, check with your insurer.

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