As storms begin to form during hurricane season and rate increases start to show up on property insurance bills, the question on the minds of many South Florida homeowners is whether they will be protected should a major hurricane hit.
South Florida homeowners generally pay the highest property insurance rates in the United States. Most of these people are covered by the state run Citizens Property Insurance Corporation or the comparably much smaller companies like Florida Peninsula. These smaller companies are relatively new and were aimed at drawing people away from Citizens, which begs the question: how strong are they?
The good news is that industry executives and analysts says the industry is stronger than it has been since 2004-2005. Citizens and other carriers should be in good shape, however, insurance premiums have nearly doubled since 2010 and carriers continue to deny, delay and grossly underpay insurance claims. Although South Florida has gone over a decade without a major hurricane, these smaller companies like Florida Peninsula are untested. They have yet to go through a hurricane like the devastating Andrew that cost insurance companies over $26 billion, when adjusted for inflation. In fact, Andrew caused so much damage that major companies like Allstate and State Farm chose to dramatically reduce their coverage, if not pull out of Florida entirely. Smaller companies were taken over when they were unable to deal with the claims of the 2004-2005 storms while those that did manage to survive upped their rates.
The Office of Insurance Regulation (OIR) oversaw a catastrophic stress test where 67 insurers that participated had more than the minimum capital and surplus necessary to deal with certain catastrophic storm scenarios. Last year each company that was tested passed the rigorous test and there is another one being planned this year using different scenarios, with results to follow in the fall. These stress test are part of the OIR efforts to protect consumers.
This information is provided by Miami insurance attorney Alonso, Perez & Santos, LLP. Our areas of practice include bankruptcy, insurance litigation, debt harassment, credit card defense, foreclosure defense, immigration law, condominium law, business start-ups, and more. Call 305-676-7545 to speak with one of our attorneys and receive a free consultation We look forward to working with you.
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.