Just one day after Florida’s rating agency withdrew financial stability ratings from two property insurance companies, one of them reported they’re going under.
Weston Property & Casualty was found insolvent days after its financial stability rating was withdrawn.
It just adds to the chaotic and crashing property insurance market that homeowners across Florida must deal with, according to the Insurance Information Institute’s Mark Friedlander.
“It just makes the market more volatile, and it will continue to be a driver of a higher premium. Right now, Floridians are paying $4,231 on average for home insurance. That is nearly triple the U.S. rate in the average increases,” Friedlander said.
Just this week, Florida’s rating agency, Demotech, withdrew financial stability ratings for four companies and downgraded three.
One of those companies, Weston Property & Casualty Insurance, was found insolvent and referred to receivership by the Florida Office of Insurance Regulation, meaning the company does not have enough money to cover its existing policies.
“What this means historically is it’s the fifth Florida home insurer to be declared insolvent this year. And that is the most failures of Florida home insurers since 1992, when seven Florida companies failed following Hurricane Andrew,” Friedlander said.
Friedlander said there will be about 20,000 policyholders affected who will get a 30-day notice to move their policies elsewhere before they’re canceled.
“First step is to contact your insurance agent. Find out the current status of your policy. And in the case of insolvencies, such as Weston, what is the date it will cancel? Ask your agent to shop your coverage, try to get multiple quotes,” Friedlander said.
The state created a market stabilization arrangement that can help with current claims, but Friedlander said to try to think ahead no matter what situation you’re in.
Because Florida’s property insurance market is in a tough one.
“The last thing we want to see is a homeowner lose their coverage during hurricane season,” Friedlander said.
Friedlander said that the bottom line is you want to have continuous coverage.
He also said to keep in mind when choosing a new policy that U.S. inflation has made construction materials and labor more costly.