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Citizens Property Insurance, the state-backed insurer of last resort, is dropping almost 184,000 homeowners’ insurance policies in October, after the Florida Legislature approved proposals to move these policies to private companies due to financial risks of possible natural disasters.
According to the proposal, Slide Insurance could claim about 100,000 policies; SafePoint Insurance could claim 30,000; Southern Oak Insurance, 25,000; Florida Peninsula Insurance, 19,000; and Monarch E&S Insurance Services, 10,000.
Homeowners are now required to accept private insurance offers of coverage if premiums are within 20% of the cost of Citizens’ rates.
Farmers Insurance is one of the latest insurance companies pulling out of Florida, impacting 30% of the company’s business in Florida last month – about 100,000 policyholders who will have 120 days to find new policies in an ever-shrinking market.
The company announced that the withdrawal was due to increasing costs and frequency of natural catastrophes, and that the decision was “necessary to effectively manage risk exposure,” according to the company.
At the end of 2022, annual average premiums were more than $4,231, three times the national average, according to the Insurance Information Institute (Triple-I). Insurify, an insurance comparison shopping website, reported that Floridians are actually paying an annual average premium of $7,788.
According to the Triple-I, Floridians are paying 42% more for homeowners’ insurance than last year. The US average annual home insurance premium is $1,700, an increase of about 9%.
In addition, according to the Triple-I, Florida is the state with the most homeowners’ insurance-related litigation, amounting to 79% of all the lawsuits in the US and only 9% of the total claims.
The Florida Office of Insurance Regulation reported that, between 2017 and 2021, $51 billion was paid out by insurance companies over 10 years, but 71% of that money went to attorney’s fees and public adjusters, and only 8% to claim payments.
About 280,000 lawsuits were filed during the days leading up to the December legislation (Senate bill 2-A) that made it harder for homeowners to sue insurance companies, said Mark Friedlander, director of the Triple-I.
Since last year, Bankers Insurance, Centauri Insurance, a subsidiary of AIG (American International Group) and Lexington Insurance also withdrew from Florida. Also, seven insurers have declared insolvency since February 2022, 14 other insurance companies are in liquidation, 15 have stopped writing new insurance policies in Florida since January 2022, and 18 in total are on the state insurance regulator’s “watch list,” according to the Florida Department of Financial Services.
Those include American Capital Assurance Corp., Avatar Property and Casualty Insurance Co., FedNat Insurance Co., Florida Specialty Insurance Co., Guarantee Insurance Co., Gulfstream Property and Casualty Insurance Co., Southern Fidelity Insurance Co., St. Johns Insurance Co. Inc., United Property and Casualty Insurance Co., Weston Property & Casualty Insurance Co., and Windhaven Insurance Co., among others.
Due to these insurers retreating from the market, homeowners are forced to look for coverage at Citizens Insurance, which grew to 1.34 million policies as of the end of May and now has 18% of the total market, doubling in the last 18 months.
https://www.miamitodaynews.com/2023/08/08/competitors-pick-up-more-citizens-insurance-policies/
