Property owners throughout the state will see the increase due to insurer insolvencies from hurricanes.
Florida home insurance customers will be paying another 1 percent on top of their usual premiums in order to cover the cost of property insurer insolvencies caused to a certain extent by hurricane damage claims.
This additional fee is being added to the already spiking rates being charged across Florida.
Floridian consumers have been watching their home insurance premiums soar yet again as the state scrambles to try to prevent a full crisis in this market. Property policies won’t be the only type that will have the additional fee. Other forms will also have the emergency fee added, though this will not include auto policies.
Last week, Florida Commissioner Mike Yaworsky gave his approval for the emergency “assessment” collection to the Florida Insurance Guaranty Association. Insurers will be able to begin collecting the assessments as of October 2023. That money will be sent to FIGA, a state-created non-profit agency that handles claims for insurers that have become insolvent. Seven property insurers have become insolvent in Florida since the start of 2022.
FIGA has issued a series of home insurance assessments during a difficult last few years.
“The emergency assessment is necessary to secure funds for the payment of covered claims, to pay the reasonable costs to administer such claims, including claims resulting from insurance companies that have become insolvent or may become insolvent as a result of losses incurred due to hurricanes, including but not limited to Hurricanes Irma, Michael and Ian, and to secure bonds issued to generate revenues to pay claims,” said Corey Neal, FIGA executive director, in a letter to Yaworsky dated April 4.
At the end of last month, the FIGA board of directors gave its approval to seek the emergency assessment following United Property & Casual Insurance Co’s insolvency. In February, that insolvency also brought about an appointment of a receiver for the insurer. It is expected that it will direct hundreds of millions of dollars in claims to FIGA.
Now that the home insurance emergency fee collection plan has been approved, FIGA is borrowing $150 million in short-term financing to be able to pay those claims.