Florida homeowners have fewer options for property insurance. Just two weeks into hurricane season, The Farmers Group and AIG say they’re scaling back policy coverage.
Both companies point to their vulnerability to natural disasters like hurricanes and flood.
Over the past 18 months in Florida, 16 property insurance companies have decided to stop writing new business to new homeowners in one form or the other.
WOKV Consumer Warrior Clark Howard says insurers are pulling out of Florida and California because the risks have become incalculable.
“Florida and California will need to offer state-backed reinsurance so that insurers can issue actuarially sound policies.”, Clark said.
Clark suggests shopping for insurance through an independent agent and then get quotes for a high deductible, the highest your mortgage company will allow you take.
“You’re eliminating for the insurer what they refer to as nuisance claims. So you become a less risky, less costly person for them to insure.”, Clark said.
Clark says the Florida Legislature is going to need to step in and address Citizens Insurance, the insurer of last resort. He says the state will have to take over the role of reinsurance, eliminate Citizens, which could allow regular insurers to come back.
“That insurers would be liable for losses up to a ceiling, whatever that is. And then after that the Florida reinsurance would cover it.”, said Clark.