Thousands of Florida Home Insurance Policies Will Be Cancelled by the End of June
By the end of this month, more than 68,200 Floridians will find their homeowner insurance policies canceled. The cancellations involve policies issued by FedNat Insurance Company, Monarch National, and Maison and extend to single-family homes, condominiums, and rentals. FedNat has ceased writing new policies and will transfer an additional 83,000 policies to Monarch National, which will continue business thanks to a new investor.
FL Residents Have 45 Days to Find New Insurance
June marks the beginning of hurricane season, and those left without coverage will have just 45 days to find new policies. This comes when insurance rates are already at an all-time high and subject to additional restrictions such as the age of the residential roof. With the loss of at least six insurance companies this year alone, Floridians have fewer opportunities to find providers than in the past. For many, the choices are limited. Either they must go with state-backed Citizens Property Insurance Corporation (CPIC) or do without property insurance at all.
This is a true crisis for Florida homeowners, whose insurance rates have already skyrocketed. In some cases, premiums have risen 100 percent.
FedNat Pulls Out of Several Southern States Amid Devastating Losses
Not long ago, FedNat, was one of the largest insurers in the Sunshine State. However, FedNat, a publicly-traded company, reported over $103 million in net losses last year. In November, FedNat announced that it was pulling out of several markets, including Alabama, Louisiana, Mississippi, South Carolina, and Texas, due to losses from recent hurricanes and Texas’ massive winter storm in 2021. For the first quarter of 2022, the downward trend continued approaching $31 million. The company’s CFO and COO have resigned.
Soaring Roof Claims Seal Fate of Florida Homeowners
The dropping of the Florida policies is associated with soaring roof claims. In 2021, home insurance companies were hit with more than 100,000 lawsuits. In other states, the average is 1,000 lawsuits.
The problem begins with the unpredictable nature of severe Florida weather and resulting storm damage to homes. It is amplified by certain attorneys and roofing contractors who canvas neighborhoods and offer inspections that tend to reveal damage. Based on the damage found, the contractors entice homeowners with the prospect of getting a “free roof,” claiming they can have the insurance deductible waived. The homeowner signs an assignment of benefits, which allows the contractor to file an insurance claim on their behalf.
When the insurer’s claims adjuster inspects the roof and finds little damage, the contractor initiates a lawsuit to collect the difference between the original quote and the insurance payout. It is nothing short of insurance fraud, and It’s a no-win situation for the insurance company which can either settle the lawsuit or incur the legal fees necessary to fight it. Either way, the insurer loses money. As insurers leave Florida, homeowners also lose.
Kogan & DiSalvo, a Boutique Law Firm Serving South Florida
Kogan & DiSalvo is a Florida-based personal injury law firm serving some of the fastest growing areas of our state. As more folks move into our neighborhoods and communities, many will surely face the conundrum posed by the mass exodus of FL’s home insurance companies. In an effort to avoid a total industry collapse, Florida lawmakers are working hard to find a new approach. As members of the local community, Kogan and DiSalvo will continue to follow this story and update you with any important developments.