Home Insurance Failures in Florida

Since the beginning of the year, six property insurance companies have become insolvent. The latest company cancelled 56,500 policies and transferred about 83,000 others before folding up shop.

Years in the making, our property insurance woes stem from fraud, coming in the way of false or bloated claims. This, in turn, forces insurance companies to pay attorneys to defend themselves from policyholders in court.

Those insolvencies have contributed to a massive growth in the number of customers flocking to the state-backed Citizens Property Insurance Corp., which was created as an insurer of last resort. As of Sept. 16, Citizens had over 1-million policies, more than double from two years earlier.

This growing crisis will have ripple effects. Besides people paying more for coverage, some cannot get proper coverage, period.

For people who are purchasing a home with traditional financing, the issue can be even more dire. In order to have the lender’s money at closing, the borrower must provide an insurance binder, proving that they have an active policy on the day of closing. Today, many buyers are scrambling to make that happen, and a few unlucky ones fail to find insurance, which means they cannot close.

The State of Florida is working from a number of angles to try to find a resolution to this significant issue. At present, it remains a very difficult situation. Working with Realtors® like me, buyers can successfully navigate these turbulent waters. If you are in need of assistance, reach out to me and I’ll try to help.