July 12, 2020

Storm Signals

Ratings agency Demotech sends out a warning about Florida's homeowner insurers

Mike Vogel | 6/25/2020

Given how 2020 is unfolding, a significant warning early this year about the condition of Florida’s homeowner insurance market understandably didn’t get a lot of attention. Demotech — a key rating agency for Florida-focused insurers — set off alarm bells when it announced it might downgrade 18 homeowner insurers, some with large shares of the Florida market. The loss of an A rating doesn’t mean an insurer would fail but does mean most customers, in order to keep to the terms of their mortgages, would have to immediately find a higher rated insurer.

Florida insurers, in Demotech’s view, were vulnerable to two types of disasters: Hurricanes and “man-made disasters” in the form of a trio of state Supreme Court decisions that went against insurers making it easier for policyholders to collect damages and be reimbursed for attorney fees. Among the cases was the Sebo decision in 2016 that made it easier to collect against an insurer when damage had multiple causes, some covered, some not.

This story also features expert opinions, business briefs and people in the news:
Anne Bert; Jared Moskowitz; David Altmaier; Demotech; Joseph Petrelli; Paul Handerhan

 

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Tags: Insurance, Feature

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