Will New Insurers Result in Lower Rates?
An increase in the number of hurricanes and their severity resulted in higher costs for insurers, prompting many companies to cancel homeowner policies, declaring insolvency, claiming bankruptcy, or leaving the state. Some new insurers have been approved by the state’s Office of Insurance Regulation (OIR) to operate in the state and many residents are wondering how that will affect their premiums.
6 Companies Approved to Take Over Citizen Insurance Policies
The OIR authorized 6 companies to take over some policies offered by Citizens Insurance amid multiple concerns. Each of those insurers has stated its intention to only write a specific number of policies. The new companies and the number of policies they’ll each be writing are as follows:
- American Traditions, 12,000
- Edison Insurance, 10,000
- Florida Peninsula, 15,000
- SafePoint Insurance, 16,000
- Slide Insurance, 75,000
- TypTap Insurance, 25,000
For several months, holders of Citizens Insurance policies have received letters offering them the opportunity to switch, but there’s a catch. Individuals can only refuse to switch to one of the 6 companies if their offer is more than 20 percent of the Citizens Insurance premiums. Coverage from any of those companies will take effect on Dec. 15, 2023.
Concerns About Citizens Insurance
The insurer grew very large, very quickly and currently has nearly 1.4 million policies. The major concern is that the insurer wouldn’t be able to fulfill its financial coverage obligations to policy holders should a major storm hit the state.
Other Approvals
The OIR has also authorized Orion180 Insurance Company and Orion180 Select Insurance Company to form and offer property coverage in the Sunshine State. It comes after the approval of Mainsail Insurance Company in Aug. and Tailrow Insurance Company in April.
Insurance Rates Remain High
The state’s unique position, especially South Florida, make it particularly vulnerable to hurricanes and a wide range of tropical storms that can result in severe damage to homes. Residents are already paying the highest rates in the nation for insurance. Insurers cite the high cost of repairs or replacement and fraudulent claims as the cause. As long as those conditions exist, it’s doubtful that residents will see a reduction in costs on their insurance costs.
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The Sena Group
6501 Congress Ave., Ste. 100
Boca Raton, FL 33487
