Avatar Property & Casualty Insurance coverage Co. has formally entered into liquidation, and insured householders in Florida have lower than three weeks to search out new carriers.
The bancrupt firm, the second this 12 months and the sixth in Florida within the final 30 months, stated on its web site that every one Avatar insurance policies will likely be canceled by 12:01 a.m. on April 13. The corporate had 40,055 insurance policies in drive on the finish of the third quarter for 2021, however was right down to 37,000 insurance policies by early March, state regulators have stated.
“Your agent is greatest capable of advise you as to your insurance coverage choices,” Avatar’s frequently asked questions internet web page reads. “To help your agent and also you on this course of, now we have notified your agent straight of the cancellation of your coverage.”
That info comes regardless of Avatar representatives telling some policyholders that their insurance policies will stay in drive till their said expiration date. However different insurance coverage firms’ executives acquainted with the liquidation course of have stated the abrupt cancellation is just not sudden and Avatar householders ought to begin buying round.
A notice to agents gives comparable info. The Avatar website didn’t point out if Residents Property Insurance coverage Corp., Florida’s state-run insurer of final resort, would assume any of the insurance policies.
A Leon County Circuit Court docket choose final week permitted a 59-page consent order that appointed the Florida Division of Monetary Companies the receiver for Avatar “for the needs of liquidation.” All Avatar administrators, officers and staff have been terminated, aside from some that could be retained by DFS to help within the liquidation and transition course of, the courtroom order famous.
The division additionally was approved to take rapid possession of the corporate’s property and property.
Avatar, launched in 2008, was declared bancrupt in early March, simply two weeks after a bigger Florida provider, St. Johns Insurance coverage Co., turned bancrupt and was put into liquidation. Trade insiders have stated extra insolvencies are seemingly this 12 months because the Florida insurance coverage market continues to really feel the consequences of hurricane losses, roof alternative fraud and what insurers name extreme litigation over claims.
It turned clear that Avatar was dealing with monetary difficulties in mid-February, when the corporate introduced it could cease writing new enterprise within the state. The Demotech score agency then withdrew its monetary stability score for Avatar. On the finish of Q3 final fall, Avatar reported $76 million in complete premiums and greater than $22 billion in publicity from insurance policies with wind protection, a report from the Florida OIR reveals.
Avatar and St. Johns are two of seven insurers within the final a number of weeks to droop new enterprise or to non-renew 1000’s of insurance policies in Florida. Others have requested for double-digit charge will increase.
The Florida Legislature, within the session that ended March 11, didn’t act on insurance coverage rescue payments that supporters stated would assist curtail roof losses and different prices. State Sen. Jeff Brandes, R-St. Petersburg, who has repeatedly known as for reform actions, final week urged the Florida governor to name a particular session to handle the property insurance coverage disaster.
“If I used to be advising the governor, I might say, ‘Pay attention, in case you don’t name a particular session on this, you’re going to start to personal a few of these charge will increase,’” Brandes informed a Tampa TV information station.
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