In a, perhaps, coincidental move Tuesday, just as Hurricane Ian was preparing to target the Tampa to Fort Myers area, another Florida base property insurance company will stop writing future property insurance policies.
Sunrise-based FedNat Insurance Company became the sixth this year, and the 16th overall, to land on the liquidation-receivership list in which insurers stop writing future policies or simply withdraw from the Florida market, leaving thousands of homeowners without property insurance.
FedNat, founded in 1992, had been responsible for some 56,000 policies, among the largest home insurers in the state. Reports indicate 19,740 customers already were moved to Citizens Property Insurance Co.
Earlier in the year, the company was reported to have had 140,000 policies, before transferring some 83,000 to a related company, Monarch National Insurance Co which coincidentally, enjoys an Exceptional rating from Demotech.
Kevin McCarty, the previous commissioner of the state Office of Insurance Regulation, told the Orlando Sentinel that a storm like Ian would “have a major impact on an already destabilized market.”
But, Florida Gov. Ron DeSantis reassured homeowners that they will have plenty of insurance company options.
“We have a catastrophic fund that’s flush, and the $2 billion (that the Legislature added to the Hurricane Catastrophic Fund this year) is an added layer of protection,” he said.
Florida has the highest premiums in the nation.
Gov. DeSantis said he would help the ailing property insurance industry.
“Of course, there’s more that I want to do in terms of the wind insurance, and that is something we are going to address,” he said. “But, at the end of the day, we’ve got to make sure folks are taken care of and so we will do that, whatever we need to do.”
FedNat had lost its financial rating Aug. 1 from the ratings agency Demotech.
The Florida Department of Financial Services sought to be the appointed receiver for FedNat, which remains responsible for claims and other types of obligations from before June 1, according to court documents.
It notified the state Office of Insurance Regulation on Sept. 13 that it did not have enough money for what is known in the insurance industry as a “runoff” of the obligations, reports said.
It was just the latest move in Florida's insurance puzzle, further limiting the choices for those seeking coverage.
Other insurers declared insolvent since February were Southern Fidelity Insurance Co., Weston Property and Casualty Insurance Co.; Lighthouse Property Insurance Corp.; Avatar Property & Casualty Insurance Co.; and St. Johns Insurance Co.
As a result, Citizens Property Insurance Corp., the state's insurer of last resort, had 1.055 million policies on Sept. 16, more than double its total from two years earlier.
To qualify for home insurance coverage from Citizens, you need to meet one of the following eligibility requirements:
- You were denied coverage from at least one standard Florida home insurance company
- You qualified for homeowners’ insurance with a standard Florida insurer but it was 20% more expensive than a comparable policy with Citizens.
Here is a list of companies in liquidation, as supplied by Florida's Chief Financial Officer, Jimmy Patronis (click each one for details):
AMERICAN CAPITAL ASSURANCE CORPORATION
AVATAR PROPERTY AND CASUALTY INSURANCE COMPANY
FLORIDA SPECIALTY INSURANCE COMPANY
GULFSTREAM PROPERTY AND CASUALTY INSURANCE COMPANY
SAWGRASS MUTUAL INSURANCE COMPANY
SOUTHERN FIDELITY INSURANCE COMPANY
ST. JOHNS INSURANCE COMPANY, INC.
SUNSHINE STATE INSURANCE COMPANY
UNIVERSAL HEALTH CARE INSURANCE COMPANY, INC.
