Florida Risks plans to support insurance companies facing downgrades

In the midst of the collapse of the home insurance market, Florida is taking action to ensure that homeowners will have enough property insurance coverage to meet mortgage requirements even if their insurance companies deny them. That means thousands of homeowners won’t have to go out of their way to find new insurance companies, especially amid what’s expected to be a busy hurricane season. Dozens of insurance companies face downgrades. Florida’s state insurance company, Citizens Property Insurance Corporation, promises to be there for homeowners. “Ratings are an indicator of a company’s ability to pay claims,” ​​said Mark Friedlander, Florida spokesman for the Insurance Information Institute. “If your carrier goes bankrupt or gets downgraded, you need to move your coverage to another ‘A’ rating.” Friedlander said that applies to 65 percent of residents who have federally-backed mortgage insurance. Demotech, a rating agency, planned to downgrade 27 insurance companies. The announcement was delayed earlier this week. Friedlander says the move could leave homeowners paying more money or struggling to find a new insurer. If that happens, Citizens will offer coverage during hurricane season. “Citizens will be on the hook for any claim payments over $500,000 for companies that go into insolvency during hurricane season,” Friedlander said. “This plan is not fiscally sound.” Citizens already has 1 million customers to take care of, and Friedlander said adding more could be risky. “If it gets to the point where the reserves get very low, the right through state regulation to add a surcharge to the insurance bill of every consumer in the state,” Friedlander said. “That means if you’re a homeowner, if you’re a renter, if you’re an apartment owner, if you drive a car, your auto insurance, any one of those policies could have a multi-year surcharge.” Friedlander said the state needs to focused more on the key issues of the home insurance crisis, which are fraud schemes and litigation.

In the midst of the collapse of the home insurance market, Florida is taking action to ensure that homeowners will have enough property insurance coverage to meet mortgage requirements even if their insurance companies deny them.

That means thousands of homeowners won’t have to go out of their way to find new insurance companies, especially amid what’s expected to be a busy hurricane season.

Dozens of insurance companies face downgrades. Florida’s state insurance company, Citizens Property Insurance Corporation, promises to be there for homeowners.

“Ratings are an indicator of a company’s ability to pay claims,” ​​said Mark Friedlander, Florida spokesman for the Insurance Information Institute. “If your carrier goes out of business or downgrades, you should move your coverage to another ‘A’ rating.

Friedlander said that applies to 65 percent of residents who have federally-backed mortgage insurance.

Demotech, a rating agency, planned to downgrade 27 insurance companies. The announcement was delayed earlier this week.

Friedlander says the move could leave homeowners paying more money or struggling to find a new insurer. If that happens, Citizens will offer coverage during hurricane season.

“Citizens will be on the hook for any claim payments over $500,000 for companies that go into insolvency during hurricane season,” Friedlander said. “This plan is not fiscally sound.”

Citizens already has 1 million customers to take care of, and Friedlander said adding more to the plate could be risky.

“If it gets to the point that the reserves reach a very low level [Citizens has] the right through state regulation to add a surcharge to the insurance bill of every consumer in the state,” Friedlander said. “That means if you’re a homeowner, if you’re a renter, if you’re an apartment owner, if you drive a car, your auto insurance, each of these policies may have a multi-year surcharge.”

Friedlander said the state needs to focus more on the key issues of the home insurance crisis, which are fraud schemes and litigation.

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