Over 53,000 additional homeowners’ policies across the state are being cancelled due to hurricane claims.
Three Florida property insurance companies have added their names to the list of insurers that have been cancelling policies in the state due to hurricane claims.
Together, the three insurers will either cancel or not renew over 53,000 policies starting in June.
These Florida property insurance cancellations are occurring just before the start of the 2021 hurricane season. Affected customers will be receiving a letter to advise them of the fact that their policies will no longer be continuing beyond a cancellation or non-renewal date.
The companies that are shedding customers ahead of the stormiest season in the area include Universal Insurance Company of North America, as well as Southern Fidelity Insurance Company and Gulfstream Property and Casualty Insurance Company.
The companies have cited the frequency and size of hurricane damage claims as the primary reason for their decision to cut back on the number of policies they cover.
This has been an ongoing Florida property insurance trend as coverage becomes increasingly expensive to provide.
Universal made a filing with the Florida Office of Insurance Regulation on May 6, stating its intention to cancel 13,294 policies out of the total 57,000 policies it covers in the state. It explained its decision as its having suffered $4.1 million in losses in 2019 and another $22.5 million last year. The company is a home insurer in 12 states other than Florida.
According to Florida statute Chapter 224 Part III, insurers are permitted to cancel policies when continuing the coverage would place the insurer in a hazardous financial situation due to an increase in claims following hurricane damage or attorney’s fees required for its defense in fraudulent adjuster claims. In December 2020, Universal announced its plans to merge with Universal North America Insurance Company out of Texas, with a surplus of $61,525,164.
According to past president of the Latin American Association of Insurance Agencies, Dulce Suarez-Resnick, the type of widespread Florida property insurance policy cancellation being seen right now is a common trend following several consecutive years of increased hurricane activity.
