Sometimes seen as Florida’s last resort when it comes to homeowners’ insurance, Citizens Property Insurance Corp. is emerging as the only option as private companies make their Florida insurance market exit and the insurer is flooded with new policies.
According to Insurance Journal, Florida insurers are taking drastic measures to reduce their risk in regions where reinsurance premiums are high or there is significant litigation. Consequently, four Florida firms are no longer taking new business, and at the least, 12 others have placed stringent underwriting limitations, including caps on new business/renewals depending on the location, home age, roof age, and more.
Along with limiting coverage, carriers are compensating for their deficits by increasing rates. Over the past year, the Florida Office of Insurance Regulation has given the green light to more than 100 rate tweaks, 90 of which were for rate reductions, and 55 of which were for rate increases of over 10%.
Demotech, which ranks more than 60 percent of the Florida market, is now forcing company rates to limit where they write policies and the types of homes should they wish to maintain their financial stability rating (FSR) rating.
The competition of Citizens’ rates exacerbates its rate of growth. Around 91 percent of the time, the insurer’s homeowners plans are less expensive than the typical private-sector cost.
Citizens’ policy count could revert to its 2011 pace, posing an $11.6 billion appraisal risk to all Florida policyholders in the event of a once-in-a-100-year event.
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This information is provided for educational or informational purposes only and should not be construed as legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice.