Florida’s property insurance crisis is getting worse after tens of thousands more homeowner policies get canceled.
It’s happening one week before lawmakers are coming back together to find a solution.
FedNat Insurance Group is downgrading to survive.
Experts say last year’s ice storm in Texas and Hurricane Ida in Louisiana hit the company hard.
On top of that, it’s struggling with roof replacement schemes and lawsuits like so many other Florida insurers.
This leaves those losing their coverage less than two months to find new coverage during hurricane season.
It is affecting about 68,000 Floridians.
FedNat and its sister companies have canceled nearly half of its Florida policies, giving homeowners about 45 days to get new coverage.
“The Florida private property insurance market is in freefall. We’ve seen this collapse coming for many months. We’ve already seen three Florida residential insurers declared insolvent this year,” said Mark Friedlander, with the Insurance Information Institute.
Friedlander said most of the people affected will end up with the state-backed Citizen’s Property Insurance Company.
He said Citizens is quickly becoming the go-to company in Florida which is not a good thing.
One bad storm means the state loses a lot of money helping people fix damages.
“Not only would a major storm loss potentially wipe out the reserves of Citizens, but it could lead to a surcharge for every homeowner and every auto owner in the state of Florida,” Friedlander said.
The state’s Insurance Consumer Advocate Tasha Carter points to property insurance problems like these as the main reason behind the special legislative session next week.
“I am hopeful that this upcoming special session will, you know, provide additional opportunities to be able to, you know, at least consider and pass legislation that’s going to specifically address some of the factors that’s resulting in the adverse impact that consumers are experiencing in our marketplace,” said Carter, with the Florida Department of Financial Services.
But don’t expect these issues to go away immediately.
It could take a year or more to see any impacts.
“It will be the first step on the road to recovery for the unstable Florida market, and take steps to make the market more stable and more viable for homeowners across the state. And for insurers to continue to operate effectively in the state,” Friedlander said.
Friedlander said the best thing for those FedNat policyholders to do now is shop for insurance with your agents so you’re protected in time for hurricane season.