What to do if your Florida Homeowners Policy is Cancelled

27 Jul

Luxury home in Hallandale Beach, Florida, located in the Golden Isles neighborhood.

Recently, Demotech, a rating agency which rates 40 Florida-based insurance companies, announced that it plans to downgrade 17 Florida-based property insurance companies from an “A” rating to ratings of either “S” for substantial or “M” for moderate, according to the South Florida Sun Sentinel.

A rating decrease will raise costs for these insurers which will most likely lead to higher premiums for homeowners and even cancellations if some of these insurance companies end up pulling out of the market or going bankrupt.

Not everyone is happy about the rating downgrades. Florida Insurance Commissioner David Altmaier and Chief Financial Officer Jimmy Patronis criticized the ratings agency in a recent Sun Sentinel article. They claim the decision was based largely on the company’s opinion that legislative reforms enacted over the past two years were not enough to bring the state’s overall insurance market back to health.

The Florida property insurance market has been in trouble for years and while legislators have tried to resolve the issues, so far, they have been unsuccessful.

“This is an example of inconsistent, monopolistic power of a select rating agency and is trying to exert coercive influence over Floridians and policymakers in an effort to thwart public policy according to its own opinions,” Altmaier said in his letter.

In addition to higher premiums, homeowners may have to switch insurers if they are currently protected by one of the insurance companies experiencing a rating downgrade. Unfortunately, Federal mortgage loan guarantors Fannie Mae and Freddie Mac currently require borrowers to maintain insurance coverage with A-rated insurers.

If your insurer is downgraded, you could find yourself in default of your loan terms. This allows your lender to force place coverage with an “A” rated insurer and this can be expensive as your lender will not shop around for the best priced coverage.

“Can you imagine, with the height of hurricane season around the corner, if you just paid your insurance bill for the year and suddenly your mortgage servicer says, ‘You’re out of compliance and we’re going to force-place you’ and charge $5,000 or $6,000? That’s a real potential,” said Paul Handerhan, president of the consumer-oriented watchdog group Federal Association for Insurance Reform in the Sun Sentinel article.

What to do if your policy is cancelled

Unfortunately, if rating downgrades do occur, there is always a possibility that your insurer will non-renew your policy. Insurers may end up pulling out of Florida or specific areas of the state. Even worse, your insurance company could end up in bankruptcy. Either way you need to know what to do, here are a few things to consider if your insurance company drops you:

Call your insurance company: If your policy is being cancelled or non-renewed due to financial issues with the insurance company or because they are pulling out of the market, there is little chance you can change their mind.

However, you should contact your insurer to get details of the cancellation, when it will take effect, any assistance they may be offering to find a new insurance company and all deadlines you need to be aware of regarding the cancellation. If you end up without coverage because you failed to find a new insurer before the cancellation date you can end up in default on your mortgage. In addition, your home and possessions will be unprotected.

Start Shopping: It’s time to start shopping for a new policy. While this can be a tedious task, there is a good chance you may end up finding a cheaper policy and putting some money back in your pocket. We can help you shop by gathering quotes from the 30 Florida insurance companies we deal with and sending them directly to your inbox. Get Cheaper Florida Home Insurance Quotes Today!

Get help: If you are having trouble finding a new insurer or feel you are being treated unfairly by your insurance company regarding pro-rated refunds or the required notification contact the Florida Office of Insurance Regulation

Insurance companies are required to notify homeowners in advance when they plan to cancel an insurance policy. According to Florida statute, insurance companies must notify you 45 days in advance of a policy cancellation

Citizens Property: In Florida, Citizens Property is the insurance company of last resort. If you cannot find coverage in the private market, you may have to purchase a policy via Citizens. There are coverage limits and property requirements that apply to their policies.

It’s best to let us try to find coverage in the private market before turning to Citizens. In many cases we can find better coverage at a lower premium. Click here to get the quoting process started.

Call Now For Florida Home Insurance Quotes – 888-685-4704

Tips for finding affordable coverage

Shop your coverage: While the Florida homeowners market is absolutely a mess, there are still some insurers that are in solid financial shape. Insurers rate risk differently which can result in dramatic differences in premium quotes. We can help you find a solid homeowner insurance company and a policy you can afford. Here are just a few of the insurer we work with:

Centauri Insurance: Centauri Insurance was founded in 2006 to provide exceptional, yet competitively priced property and casualty insurance. They serve policyholders in nine states including Alabama, Florida, Hawaii, Louisiana, Mississippi, Oklahoma, Massachusetts, South Carolina and Texas.