According to the Florida Insurance Guaranty Association, since 2020, 14 Florida Insurance companies have gone insolvent.
They include United Property and Casualty, FedNat Insurance Company, Weston Property & Casualty, Southern Fidelity, Lighthouse Property Ins. Corp., Avatar Property & Casualty, St. John’s Insurance, Global Liberty of NY, Western General, Gulfstream Property & Casualty, American Capital Assurance, Bedivere Insurance, and Windhaven National.
Last year, lawmakers put new reforms in place, and now Florida’s insurance commissioner says the bleeding has stopped and the state is seeing improvements but is the industry finally in the clear?
Many industry experts agree that while the state may not be completely out of the woods yet, there are signs of improvement on the horizon.
Fort Myers Insurance Agent Doug Nellans with the Insurancenter said he would describe the overall feeling in the industry as cautiously optimistic about the market heading into 2024 as six new insurance companies open for business in Florida, giving homeowners more options.
“We are working with several of those new companies, and we’re very excited to have them on board. We think it will be a tremendous positive for the Florida consumer,” Nellans said.
Those companies will ultimately be rated by Demotech, one of two companies that provide financial stability ratings for insurance companies.
“We’ve added probably three or four companies in 2023. We have a couple more that we’re talking to that are Florida-focused,” said Demotech CEO Joseph Petrelli.
He agrees with many industry experts who believe the insurance market is showing signs of improvement.
“I would do a knock on wood and hope everyone appreciates there will always be some rate increases associated with property insurance because of the cost of materials and tradespeople,” Petrelli stated.
However, rebuilding costs are only one reason for steady rate increases, as Mark Friedlander from the Insurance Information Institute explains.
“We’ve had the most severe thunderstorm losses in U.S. history in 2023, over $50 billion in losses through the third quarter,” Friedland noted.
Storms and an industry that has been plagued with lawsuits have led to rate increases.
Friedlander points out that, on average, policyholders in Florida saw a 42% increase in 2023, a 33% increase in 2022, and a 27% hike in 2021.
“In three years, that’s 102% accumulative increase on average, for home insurance in Florida,” Friedlander stressed.
He predicts recent reform by the state will ultimately level out future rate increases.
“You’re not going to be paying less for home insurance next year. We’re just hoping we’re not going to see these very large rate increases that have become so common in recent years,” Friedlander acknowledged.
In short, the insurance expert believes the Florida property insurance market is on the road to recovery.
However, many homeowners hope it isn’t too late.