MIAMI – One of Florida’s largest home insurers is exiting the market, leaving thousands of homeowners scrambling to find new coverage as options in the Sunshine State continue to dwindle.
United Property & Casualty Insurance Company based in St. Petersburg, announced Thursday that it filed a withdrawal plan in Florida and also plans to leave three other states.
It comes in the middle of hurricane season and amid a bounce of companies from the market.
“The situation we are seeing at UPC today is another chapter in the decline of the Florida personal insurance market,” said Mark Friedlander, Florida spokesman for the Insurance Information Institute.
Friedlander calls the Florida property insurance market the “most volatile in the US” and says virtually every homeowner in Florida will be affected, either because they struggle to find coverage or those who do have coverage are paying more for it, what they have.
Coconut Creek insurance agent Dustyn Shroff said the Florida insurance market “collapsed.”
“Citizens Insurance, the company of last resort, wasn’t designed to take on that many policies,” Shroff said. “As a local insurance agent, we learn about these cancellations at the same time as the homeowner.”
Dr. Allen Lavina and his wife bought a home in Sunrise back in 2019. The original owners were able to get insurance and make their mortgage payments on time. But recently the couple received a note from their insurance company: “We are reducing exposure in the area.”
“We had a lot of time to find another insurance company, but they won’t insure us because our roof is too old,” Lavina said. “We signed a contract to get our roof done but we have been told deliveries will be delayed and it will take months to complete. Unfortunately, we now have property insurance with our mortgage banker, which of course is not ideal given our current limited income.”
David Quinones started a Facebook group for Floridians who have been dropped from their homeowners insurance. It’s called Evicted from Florida.
“I was dropped from my homeowners insurance effective July and was also turned down by citizens for passing an arbitrary rule in February banning new policies if the home has ever had more than two non-weather water claims,” Quinones said . “So we’re really locked out of the market and our mortgage and our home itself are at risk.”
Friedlander said Florida’s increased hurricane risk wasn’t to blame for the crisis.
“We look down the road in Louisiana and see that in the last few years seven storms have hit the state, Florida hasn’t had any direct hits,” he said. “So you can’t blame hurricanes. This is 100% a man-made crisis caused by years of rampant risk fraud replacement schemes and excessive claims against insurers.”
Friedlander uncovered roof repair fraud.
“Roof repair fraud schemes are the fuel that is fueling the fire behind the rampant lawsuits being filed against property insurers in Florida,” he said.
Friedlander said lawmakers had failed to direct themselves Fraud and litigation during last May’s special session on property insurance reform.
Homeowners said the state needed to do more.
“If they try to put some patches or band-aids on it, we still have an existential dilemma,” Quinones said. “For example, how will we live in Florida?”
Homeowner Neal Bloom also expressed disappointment at the government’s response.
“I am very disappointed that the Florida government refuses to acknowledge this or do anything to alleviate this,” Bloom said. “I emailed my congressman, but none of their replies were what I wanted to hear. We have a small mortgage on our house, very good credit, pay our bills on time. So I find it unfair that people in our situation are being penalized because others chose to make fraudulent claims for new roofs from previous hurricanes, which was the excuse for us being thrown off just like that.
Bloom was recently forced back into the Citizens pool after being dropped by his airline, increasing his bounty by more than $1,000 a year. He said he ended up spending thousands of dollars just to pass the company’s mandatory inspection.
For some, like Lavina, the crisis is raising questions about staying in the Sunshine State.
“My wife and I are trying to decide whether to stay in Florida,” Lavina said.
Friedlander said don’t expect things to improve in the short term.
“At this point we do not see any signs of stability and unfortunately for the remainder of the year we expect the Florida insurance market to continue to deteriorate,” he said.
Insurance bankruptcies, market exits
A number of home insurers went bankrupt in 2022, Friedlander said. He presented a list of companies that have either gone bankrupt or exited the market.
2022 Florida Home Insurance Bankruptcies:
Avatar Property and Casualty Insurance Co.
Lighthouse Property Insurance Corp.
Southern Fidelity Insurance Co.
St. John’s Insurance Co.
Weston Property & Casualty Insurance Co.
Florida home insurer, which announced exit from the market due to continued volatility and contentious environment (the company will continue to write small commercial, rental and flood insurance in Florida):
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