More Florida insurance companies may fail in the next 18 months.
It’s a prediction made by many insurance industry experts, and it’s frightening news for anyone who is already dealing with rising insurance rates or finding a business to insure them.
However, insurance companies are facing rate increases as well. It’s known as re-insurance.
Insurance for the insurance companies. The new rates for such companies are likely to be announced in June, and they may be so high that some businesses will be unable to afford them and may go out of business.
The insurance industry has experienced a meltdown in recent years and it has only grown worse since Hurricane Ian and Nicole in 2022. As companies have dissolved and prices have been shooting up tens of thousands of policies have been cancelled.
Consumer Watchdog Doug Quinn, with the American Policy Holder Association, said the market has been in complete chaos for the last two years. He is among those predicting more companies will dissolve after re-insurance rates come out in June.
“I’d say it’s a certainty in the next 18 months. We’ve seen a significant amount of companies go out of business already,” Quinn said.
In fact, seven companies including UPC and St. John’s have gone insolvent in the last year in Florida.
Local business and homeowner Cole Peacock of Fort Myers believes the legislature can do a much better job of getting a handle on the insurance industry.
Insurance Commissioner Mike Yarowsky insists changes made this year by lawmakers will take time.
“We’re probably looking about 12 to 18 months before we really have the experience to show what the legislature has done,” Yarowsky stated earlier this month.
But that kind of time may not be on the side of some insurance companies.
According to Reid McDaniel of McDaniel Insurance Solutions, which helps customers locate insurance, a few carriers in the Florida market have already seen red flags and surplus decreases, making them more vulnerable.
More cancellation notifications are on their way, leaving more homeowners with less options. Many of them may be forced to use the state-run Citizens insurance as a last resort.
The firm said Thursday that it is ready to handle any new consumers that come its way, but that there may be consequences.
“Citizens is designed to respond to market conditions and take on policyholders who cannot find coverage in the private market. As our policy count increases, however, the risk of having to levy assessments on our policyholders and other Florida consumers increases,” said Michael Peltier of Citizens Insurance.