Florida’s insurance regulators have approved over 50,000 home insurance policy terminations for three insurers, as the state continues to struggle with exorbitant claims losses and litigation costs.
The state’s Office of Insurance Regulation issued consent orders which authorized the “extraordinary” number of policy terminations. They approved the policy cancelations of three Florida-based insurers: Universal Insurance of North America, Gulfstream Property & Casualty, and Southern Fidelity. The consent orders did not specify the specific locations of affected policyholders.
The orders, signed by insurance commissioner David Altmaier, outlined that the approval of the cancelations and non-renewals was “an extraordinary statutory remedy reserved to address insurers which [otherwise] are or may be in hazardous financial condition.”
A breakdown of the cancelations is as follows:
South Florida Sun Sentinel reached out to the insurers approved for policy termination, but they did not respond to requests for information. The news outlet, however, hypothesizes that the canceled policies are likely disproportionately located in Broward, Miami-Dade and Palm Beach counties, as well as the Orlando metro area. It came to this conclusion since insurers have been reducing their exposure in those counties for several years, as those areas have seen inflated damage claims, spikes in litigation activity, and rampant insurance fraud.
More insurers will consider canceling policies over the coming months, as they look into dropping risky and/or unprofitable policies – all while refusing to insure older homes whose roofing, electrical, and plumbing are not up to current standards, warned Federal Association for Insurance Reform president Paul Handerhan.
“For the average consumer, the outlook is not bright,” Handerhan told South Florida Sun Sentinel. “There will be less options at higher price points.”