In Response to the “collapse” of the Market, Another House Insurer Will Quit Insuring Properties in Florida
Although the house insurance industry in Florida has always been complicated, recent problems are driving it to the brink of failure. Six property and casualty firms in the Sunshine State that provided home insurance have ceased operations since 2017. In 2022, three further businesses will be liquidated.
“The state of homeowners insurance in Florida right now is in crisis, we are in serious crisis mode, where we’re on a trajectory that the private insurance market could collapse,” said Mark Friedlander, director of corporate relations at the Insurance Information Institute.
According to Friedlander, Florida property insurers are anticipated to report a cumulative underwriting loss of $1.7 billion for 2021 as a result of out-of-control litigation costs.
While Florida accounts for just 9% of home insurance claims nationally, it is home to 79% of all national home insurance lawsuits, according to a recent declaration by Governor Ron DeSantis’ office. Many of these cases are allegedly fraudulent.
Net underwriting losses have reportedly topped $1 billion for two years in a row, according to the governor’s office. It makes sense that so many businesses are failing or fleeing the state before they get to that stage.
Several businesses are tightening their underwriting requirements rather than quitting entirely. Due to this, a number of companies, including Southern Fidelity, Progressive, and Universal, have decided to keep operating in Florida but have not renewed tens of thousands of policies.
Only three of Florida’s 52 insurance firms really turned a profit last year, according to the Insurance Information Institute. “Every insurer is losing money, and they’re losing a lot of money.” said Friedlander.
Legislators in the state are debating a measure that would prevent state-run Citizen Insurance from renewing coverage if a private firm provides a premium that is not more than 20% above Citizens’ rate.
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