ORLANDO, Fla. – With hurricane season weeks away, three property insurance companies are dropping more than 50,000 homeowner policies in Florida and some of the policy holders have yet to be notified.
It’s the latest twist in Florida’s on-going property insurance problem.
Angela Holland said she got a notice in the mail saying her insurer was not renewing her policy.
“I haven’t filed a claim on insurance in 25 years,” she said. “When I got the letter, I had just came home from COVID, being in the hospital, and I had to deal with trying to find insurance.”
Holland is by no means alone.
Florida’s Insurance Commissioner approved three companies canceling or not renewing about 50,000 policies.
Gulf Stream Property and Casualty Insurance is canceling more than 20,000 policies effective June 28. Southern Fidelity is canceling more than 19,600 policies over the next 14 months and Universal Insurance Company of North America is canceling more than 13,000 policies effective June 29.
Holland was not insured with any of these companies but was also dropped.
“This was not a good time for me to have to deal with this,” Holland said.
Like many others, Holland turned to Citizens Insurance which is backed by the state of Florida.
It’s supposed to be the insurer of last resort, according to Citizen Insurance spokesperson Michael Peltier.
“When you are supposed to be the insurer of last resort, and all too often we’re becoming the insurer of first resort,” Peltier said.
Peltier says Citizen’s Insurance is growing by thousands of policies per week.
The company expects to hit about 700,000 policies by the end of this year.
With those numbers, some in the industry question if Citizen’s could sustain a massive hurricane.
“We are financially strong and are able to handle those policies,” Peltier said. “But it’s not a sustainable model.”
A spokesperson for the Office of Insurance Regulation wrote in a statement: “Florida’s property market is facing significant challenges due to increased litigation and higher catastrophe claim losses as a result of multiple hurricanes over the past several years.”
In 2017 and 2018 hurricanes Irma and Michael caused a reported $20 billion in damages in Florida.
Mark Friedlander with the Insurance Information Institute agrees increased litigation is also to blame for insurers insolvency.
“What we’ve seen in Florida is over 100,000 property claim lawsuits filed against Florida property insurers in 2020,” Friedlander said.
In 2019, Florida accounted for 8% of all homeowners’ claims opened by insurance companies in the U.S., according to Florida’s Office of Insurance Regulations.
However, Florida accounted for 76% of all homeowners’ suits opened against insurance companies.
“There is a major problem here,” Friedlander said.
Not all of the 50,000 policy holders who are being dropped by their insurers have been notified. If you are concerned check with your insurer.