Insurance crisis in South Florida communities
Miami, Florida – As four companies have been downgraded and a fifth carrier going out of business Florida’s insurance crisis continues, leaving homeowners scrambling.
“I were not in the peak of hurricane season so to know your about to be dumped is nerve-racking,” said homeowner Ernesto Cortez, referring to his insurance carrier not only dropping him but going out of business.
This comes after multiple insurance companies in the state were downgraded, his carrier Weston is among them and now they have become insolvent. “After the downgrade of the insurance companies, they didn’t do the 17 they did 4 companies but out of the four my insurance is one of them, so now I have to get insurance again twice in less than four months” added Cortez.
Demotech, the company that rates insurance carriers issued rating changes from “A” for unsurpassed to “S” for substantial or M- moderate. FedNat Insurance Co., and United Property & Casualty Insurance Co. both dropped from an Exceptional rating to Moderate. Bankers Specialty Insurance and First Community Insurance, we’re also downgraded. But the moves resulted in homeowners losing their coverage as those carriers no longer meet the minimum requirements most mortgage companies have in place. “If they don’t carry an A rating or better the mortgage company will not allow that insurance carrier to insure the home if it has a mortgage on it,” said Steven Brooks with Cornerstone Insurance.
According to Brooks, the problem has not only created a limited amount of carriers for people to choose from but also unsustainable price hikes. “We’re going to see many people who might have to leave their homes as a result of the facts that these insurance premiums and their inability to get insurance, to begin with, comes to fruition,” added Brooks.
An issue that has left many homeowners like Cortez on edge. “What do I do now, I call people, and they tell me my policy is going to go up another two thousand dollars. So it went from two thousand to five thousand and now it’s going to go up to seven thousand”.
He’s been given 30 to 45 days to find new insurance after that his mortgage company will add forced insurance likely at a higher rate, Cortez said.