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Florida Is Preventing Insurers From Cancellations and Non-renewals After Hurricane Ian

Florida Is Preventing Insurers From Cancellations and Non-renewals After Hurricane Ian

Hurricane Ian made landfall Wednesday, September 28, 2022, in Southwest Florida and barrelled through Central Florida before moving to the Atlantic Ocean.

With the aftermath wreaking havoc for many Florida homeowners, a new emergency order might be a saving grace for some. In addition, the temporary order may protect homeowners from losing their policies. Here’s what you need to know.

What Is the Emergency Order?

In light of Hurricane Ian, Florida temporarily prohibits insurers from dropping customers. This week, Insurance Commissioner David Altamaier issued an emergency order temporarily blocking cancellations and non-renewals of policies.

The order is set to last for two months. According to the emergency order, “Between September 28, 2022, and November 28, 2022, insurers or other entities regulated under the Florida Insurance Code may not:

  • Cancel or on-renew
  • Issue a notice of cancellation or non-renewal of a policy or contract

This applies to any insurance policy covering property or risk in Florida. The exception to this emergency order is when there is a written request or written agreement of the policyholder.

What’s the Purpose of the Emergency Order?

The Emergency order is to protect homeowners and property insurance policyholders. In addition, the order will temporarily protect homeowners from losing their policies if Hurricane Ian damages their property. Under the order, insurers are barred from canceling or non-renewing policies for a minimum of 90 days after the property repairs.

Insurance Commissioner Altmaier ordered a similar order following Hurricanes Irma(2017), and Michael 2018 which devastated much of Florida.

Florida’s Troubled Insurance Market

The order came amid pre-existing concerns about how Hurricane Ian, a Category 4 hurricane, will affect an already struggling insurance market. Six insurance companies in Florida have been deemed insolvent since February 2022. Other companies have dropped thousands of policies to cut their financial losses. As a result, many dropped customers have turned to the state-run Citizens Property Insurance Corp. for coverage.

Governor Ron DeSantis has publicly expressed his confidence in the company, stating that “Citizens Property Insurance Corp. will not have a problem paying claims.” Despite being created as an insurer or last resort, the company has nearly 1.1 million policies. They also have the largest number of policies in Southeast Florida and the Tampa Bay area.

DeSantis claims to have spoken with Citizens, saying that the company feels good about being solvent through this. “They have about a $6 to $7 billion surplus,” DeSantis said, referring to Citizens’ money available to pay claims.

Previous Reform in Florida’s Property Insurance Provided Relief for Floridians

With Florida insurers facing insolvency and financial calamity, DeSantis called a special legislative session in May to try to strengthen the industry. Lawmakers agreed to spend $2 billion to provide a “layer of reinsurance” to property insurers. The bipartisan legislation Governor DeSantis implemented in May was one of the most significant and comprehensive property insurance reforms Florida has seen in decades. It provided short and long-term relief to Floridians to combat skyrocketing insurance costs.

The $2 billion will be reinsurance for insurance carriers to buy from reinsurance companies and the Florida Hurricane Catastrophe Fund. Reinsurance is backup insurance for carriers and plays a vital role in the Florida market. Hurricane Ian is supposed to be the “first test” of the $2 billion reinsurance. Property insurance is already a tough market, and a category four hurricane like Ian will only make conditions more demanding. Reinsurance rates were already increasing before the hurricane, but reinsurers have added pressure to raise their rates now.

A significant part of Ian’s damage is expected to come from flooding, which is insured through the National Flood Insurance Program rather than private companies.

DeSantis explained that a lot would depend on private carriers’ financial situations. They must prove they are capitalized enough to pass “stress tests.” This year, that stress test was Hurricane Ian. They had to show that they had enough capital to pass that “stress test.” He said that all private carriers have reinsurance and that the CAT fund (Florida Hurricane Catastrophe Fund) is the highest it’s ever been, at $17 billion.

Get Legal Help For Storm and Hurricane Damage

If you are a Florida resident, we hope you and your loved ones have stayed safe through Hurricane Ian. We all know the devastating power of hurricanes and the property damage they can cause.

If you need legal assistance with a property damage claim, contact us today or call (727) 381-2300.

Schedule your no-risk, free consultation today.

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