Florida 2022 Home Insurance Market Getting Worse Before Better

In Florida, the loss of homeowners insurance has become a serious problem. You may not have been affected yet, but you might be in the future.

A recent announcement by Southern Fidelity Insurance that they will be liquidating their company means that 78,000 homeowners insurance policyholders will lose their coverage.

This new failure marks the fourth Florida insurance provider to go under this year. It is also the first company to be liquidated since state lawmakers met to undertake the current crisis.

Mark Friedlander with Insurance Information Institute said in a recent WINK article “Since the special session of the legislature took place last month Florida’s private insurance market has been spiraling down a cliff. The legislature did not fix the problems that are causing the crisis.”

In Tallahassee, lawmakers met to try to solve the issue. Reinsurance, one of the major issues in Florida was a key component, unfortunately, even global reinsurance companies think the Florida market is too volatile. 

“It is not a market they want to invest in so they’re pulling back on the reinsurance coverage and, once again, they point the finger at the legislature for not addressing the critical issues driving this crisis,” warned Friedlander.

Another major issue in Florida is less than honest roofing companies working with shifty lawyers who file thousands of frivolous lawsuits which results in billions paid out to lawyers by the insurance industry.

According to Tyler Nagle with Nagle Insurance LLC in the WINK article, “Between 2013 and 2020 Florida’s property insurance paid out $15 billion and claim costs only 8% of that was paid to consumers while 71% was paid to attorneys.” With problems like these, more and more providers will fail, not take any new business, or write letters of non-renewal.

“We had news at about noon (Wednesday) of another big one leaving at 5 o’clock today,” said Nagle. The insurance crisis is leeching into other sectors of business.

“I was left with four or five hours of helping mortgage professionals, real estate professionals, relying on insurance for this closing and now to come say, ‘hey, I know you’re closing later this month, we are going to have to take a u-turn or we’re going to have to pull the trigger right now,” Nagle said in the recent WINK article. 

In the WINK article, Nagle said he believes that there will be another provider not taking any new business sometime in the near future. He believes that the problem will absolutely get worse before it gets better.