Florida -based Capitol Preferred Insurance is preparing to cancel nearly 24,000 policies due to its “unsustainable financial condition.” Insurance regulators reported that the company lost over $48 million between 2017 and 2019. The Florida Office of Insurance Regulation approved the cancellations in a move to protect Florida homeowners. The announcement came just as hurricane season began on June 1, leaving many residents wondering about the future of their homeowners insurance coverage.
Breakdown of Homeowner’s Policies in Jeopardy
- Nearly 80% of the policies were for residential homes
- 20.5% of the policies covered condo units
Cancelled Policies
If your homeowners insurance is getting cancelled by Capitol Preferred – or any other insurance provider in the future – don’t panic or worry. While you will need to get a new policy immediately in order to keep your mortgage in good standing, there are people in place to help you. If your policy is set to be cancelled, you should have received a cancellation notice 45 days prior to the cancellation date.
Risk of Hurricane Season
As a Florida resident, you understand the importance of having windstorm coverage on your home. If you lost your windstorm policy, it is necessary to replace that coverage before a storm begins brewing. Most insurance companies will refuse to write new policies if there is an imminent storm, and at this time of year the storms can arise at any time.
Therefore if you put off getting new homeowners insurance coverage and you hear of a storm forming in the Gulf, it is too late to put coverage in place. You will have a lapse in coverage which can result in higher rates, denial of coverage, and even can affect your mortgage.
Replacing Your Insurance Company
If your policy has been cancelled in this action, you’ll want to find a secure, strong and dependable company to replace the policy. There are several factors to consider which will help you to pick the right insurance provider for you.
1. Financial Ratings
The ability of an insurance company to actually pay all claims after a disaster is essential in Florida, given our susceptibility to hurricanes, floods, and severe storms. A insurer provider’s financial rating demonstrates the strength of its financial outlook. A.M. Best and Demotech are two of the independent rating companies charged with assessing an insurance company’s financial strength.
Homeowners should seek to purchase coverage only from a financially strong insurance carrier. Capitol Preferred Insurance, and some other Florida carriers, have struggled to maintain their financial stability ratings.
2. Transparency
Insurance providers are not exactly known for being forthcoming regarding terms, rates and exclusions. Many policyholders are simply unaware of what their policy does and doesn’t cover. Yes, the industry is complex and bound by regulations and a body of law – but your insurance provider should be willing to share their financial health and be up front about all terms of your policy.
3. Look up Reinsurance
Reinsurance is insurance that an insurance company purchases from another insurance company to insulate itself – in full or in part – from the risk of a major event affecting many of their policyholders (such as a hurricane that travels across Florida). If an insurance provider has a strong reinsurance program, they are in a much better position to pay every claim, even after a major catastrophe.
4. Customer and Peer Reviews
These days, the success of a company in nearly any industry can rise and fall on the strength of their online reviews. While there is always likely to be an outlier or two, positive online reviews can assure you of good rate, amazing customer service, or stellar response when a claim is filed.
If you are a Sarasota or Bradenton area homeowner, another resource you should take advantage of is the team at Anderson & Associates Insurance Group. Because we work with multiple A-rated insurance providers, we are in an excellent position to advise you as to the strongest companies and policies available to you.
So whether your policy was cancelled, or you are simply looking for a more competitive rate – call Anderson & Associates Insurance Group today.
