Recent news has been released which continues to paint a grim picture for the Florida home insurance market and homeowners. As if it could get worse.
The list of companies who will no longer offer new home insurance policies in Florida continues to grow. Florida Farm Bureau has announced that they will no longer offer home insurance in Florida after being downgraded by AM Best from stable to negative due to the companies 13% (or about $38 million) declining surplus through the second quarter of 2021. United Property and Casualty (UPC), ranked in the top 10 Florida home insurance companies, stopped writing new policies effective Jan. 1, 2022. St. Johns Insurance, Lighthouse Insurance and Typ Tap have also stopped offering new policies in Florida.
Progressive’s home insurance company (ASI) has announced that they will be non-renewing approximately 56,000 policies after reporting a 44% surplus loss year to date December 2021. The home insurance policies to be non-renewed will be for homes with a roof age over 15 years.
Peoples Trust announced (amongst a slew of other companies) they will remain closed for new business in certain south and central Florida counties.
Centauri Specialty filed for a 28.3% rate increase. Cypress Property & Casualty filed for a 26.3% rate increase. Universal North America has announced a 14.9% increase. In a recent regulatory hearing, Southern Fidelity has asked for an up to 111% rate increase.
Some examples of non-confirmed rumors with other companies include: State Farm who is not offering new policies on homes older than 2002. Liberty Mutual is following Progressive (ASI) and non-renewing policies with roofs older than 15 years. Kin Insurance has filed for rate increases. Bankers is non-renewing certain policies due to “territory management”. Farmers Insurance has filed for a rate increase and is tightening underwriting. Just to name a few.
FIGA fees are something we haven’t seen since 2012. Florida Insurance Guaranty Association (FIGA) fees are now being assessed on all home insurance policies. FIGA, created by Florida legislation, handles the claims of insolvent insurance companies. A .70% assessment was certified in the 4th quarter of 2021 for all new and renewal home insurance policies effective January 1, 2022. The “pass through” fee is collected by your home insurance company as a portion of your premium and distributed directly to FIGA. The re-surfacing of the FIGA fee suggests other problems exist beyond what is being reported.
Despite new legislation, Florida had 100,000 property insurance lawsuits filed in 2021. For comparison, every other state in the country had less than 1,000. The Florida home insurance industry has reported losses over $3billion in the last two years. Of the $15billion paid out over the last 10 years, only 8% of that money went to the policy holders. 71% has gone to the attorneys and contractors. Florida also leads the nation in home insurance rate increases.
I believe more companies will begin to implement processes to reduce their liabilities which will include territory closures or non-renewal of certain policies. Deciding factors for non-renewals are typically determined by the age of the roof, age of the home or the general location of the home. And I am certain other companies with poor financials will soon be going into receivership.
My advice to anyone who asks about shopping for a different home insurance policy is: If you have received a renewal offer from your home insurance company, pay the premium and renew that policy. Now is not the time to shop rates. I understand homeowners are in dire need of financial relief. But those who have received a renewal offer (albeit expensive) from their current company and are seeking less costly alternatives will unknowingly be “jumping from the frying pan and into the fire”.