The Florida property insurance coverage market is exhibiting extra indicators of hassle, with one of many state’s largest carriers deciding to cease writing new home-owner enterprise within the state — whereas additionally asking for a fee improve on some insurance policies.
United Property and Casualty Insurance coverage Co., which has ranked within the prime 10 householders insurers in Florida with greater than 180,000 policyholders, stopped writing new insurance policies in Florida on Jan. 1, based on a memo the service despatched to brokers.
“Following the unprecedented 2020 storm season, the numerous improve in reinsurance value, and the worsening litigation developments inside a lot of our markets, UPC has made the tough choice to droop new enterprise with efficient dates of January 1, 2022 and later,” for HO-3, householders; for HO-6, condominiums; and for DP-3, dwelling hearth for non-owner-occupied properties, reads the bulletin.
The discover was despatched final November, however phrase has solely just lately unfold throughout the Florida insurance coverage panorama. The information comes arduous on the heels of two different carriers, Florida Farm Bureau and TypTap Insurance coverage, revealing they might cease writing new householders and dwelling hearth insurance policies within the state.
Additionally in November, Progressive Insurance coverage stated it will not renew HO-3 and DP-3 insurance policies for properties with shingle roofs which might be 16 years previous or older. Notices to policyholders have been to be despatched final month. The memo didn’t point out what number of insurance policies can be affected, however brokers stated the quantity may very well be as excessive as 56,000.
“In contrast to different dwelling and property carriers who’ve left the Florida market, Progressive House stays dedicated to the state, and we’re taking this tough step now to make sure we will ship on our long-term imaginative and prescient and proceed to help brokers such as you for years to come back,” reads the emailed memo to brokers.
Some state officers and business advocates have stated the pull-backs, together with main fee improve requests from different insurers, are the most recent indications that Florida’s insurance coverage disaster could also be worsening, probably resulting in a market with solely a handful of carriers left standing in years to come back.
“All of those corporations suspending writing ought to be the canary within the coal mine for lawmakers,” stated William Stander, director of the Florida Property and Casualty Affiliation.
Officers with the St. Petersburg-based United couldn’t be reached for remark. However a submitting made with the state Workplace of Insurance coverage Regulation exhibits that the service can also be asking for a 22.6% total improve on its Guardian program for DP-3 insurance policies, efficient March 1, 2022, for brand spanking new enterprise, and April 1 for renewals.
UPC blamed hurricane losses, increased loss-adjustment bills and reinsurance prices for the speed hike.
“There was a fabric shift in late declare reporting patterns stemming from climate occasions within the final six years,” UPC wrote in an explanatory memo filed with OIR. “As such, we consider the newer expertise greatest represents what we count on to happen shifting ahead.”
The latest steps look like half of a bigger technique for United. In December, the corporate introduced it had agreed to promote UPC’s private traces in Georgia, North Carolina and South Carolina to HCI Group Inc. The transaction will allow UPC “to reallocate capital from its private traces portfolio to its quick rising industrial specialty property portfolio, which is underwritten by American Coastal Insurance coverage Firm,” United stated in a press release.
American Coastal can also be shifting to stem potential losses. A condominium in Bradenton Seashore, south of Tampa, reported in November that American Coastal stated it will not renew the apartment’s property protection late final yr as a result of the roofs have been 13 years previous. That pressured the apartment advanced to hunt new protection, which ended up costing about 42% extra in premiums, based on a Bradenton newspaper report.
Most carriers which have suspended or decreased writing have been tight-lipped about their plans. Some have tried to place a optimistic spin on issues. TypTap, based in 2016, introduced in November it will make an preliminary public providing in 2022. However in January, the corporate postponed the IPO as a result of present market pricing “doesn’t precisely replicate TypTap’s worth.”
Then, in late January, TypTap despatched a memo to Florida brokers: “TypTap skilled unprecedented development in 2021. We credit score our brokers with this success,” the bulletin reads. “On account of this development, we’re pausing our Householders (HO-3) new enterprise for all the state of Florida efficient February 28, 2022.”
Individuals’s Belief Insurance coverage, based mostly in Deerfield Seashore, introduced that eight south and central Florida counties would stay closed for brand spanking new enterprise.
Others are pushing forward with fee will increase. Common North America, for instance, introduced a 14.9% fee improve for HO-3, HO-6 and DP-3 insurance policies, efficient Feb. 22, based on a bulletin despatched to brokers.
Insurance coverage brokers and carriers have urged lawmakers to make additional reforms that would assist stem losses and cut back litigation, and quite a few payments have been shifting slowly by means of the Legislature. One which insurers have stated would have the largest affect is SB 1728, which, amongst different modifications, would permit carriers to put in writing extra home-owner insurance policies that cowl solely the precise money worth of roofs, not the complete substitute value.
The Senate Banking and Insurance coverage Committee handed it in early February.
Subjects
Carriers
Florida
Homeowners
