Two more Florida insurance companies, St. Johns Insurance and Lighthouse Property Insurance, announced this week that they will not be writing new policies moving forward, coming just days after The Capitolist reported that United Property and Casualty (UPC) Insurance, a major player in the state’s insurance market, paused their own new policy writing, signaling worrying trends for Florida’s top insurance providers.
The pair of companies become the 5th and 6th carriers this year that have pulled out of Florida, citing a volatile market and heightened levels of risk due to worsening storm seasons and aging infrastructure. St. John’s has over 160,000 policies, according to the Florida Association of Public Insurance Adjusters.
“At this time, St. Johns Insurance has made the difficult decision to suspend all new business writing statewide as of Feb. 15, 2022,” the company said in a statement.
An additional large insurance player, Florida Farm Bureau, undertook similar action last year, halting the administering of new policies from Nov. 2021 forward. Additionally, Progressive Insurance announced that they would restrict the renewal of homeowner insurance for those individuals that own property with a roof that is older than 16 years, according to a Progressive statement.
The announcements come as state lawmakers consider proposals to address the troubled industry, which has shed policies and sought hefty rate increases to try to reduce financial risks, including Sen. Jeff Brandes, who recently lambasted the structure of Florida’s property insurance system, insinuating that residents are entrapped in a ‘crisis.’
“This is an all-hands-on-deck situation. We are not far off from homeowners paying more for insurance premiums than the mortgage,” said Brandes. “Florida’s property insurance rates are going up 30% a year, how much money does the state spend on research property insurance…zero.”
In the last 3 weeks, 4 Florida homeowners insurance companies have told regulators they can’t continue writing coverage…3 have stopped totally and one non renewing over 50k, this is just beginning. How many more will pull back before the legislature puts for a comprehensive plan
— Jeff Brandes (@JeffreyBrandes) February 15, 2022
As the precarious situation worsens for private insurance corporations, many are arguing for legislative change that builds upon what was passed during the previous Legislative Session.
“Despite legislative reforms passed during the 2021 Legislative Session, Florida’s homeowners have continued to see dramatic property rate increases. At the same time, the insurance industry is losing billions to unnecessary lawsuits from third-party contractors,” the Florida Association of Insurance Agents said. “For the first three quarters of 2021, financial results show that property insurers had $1.22 billion in underwriting losses.”
A Senate bill, SB 1728, recently approved by the Banking and Insurance Committee, would provide changes to reduce rates such as allowing insurers to offer policies that cover just the depreciated value of a roof.
“The Legislature finds that private insurers are unwilling or unable to provide affordable property insurance coverage in this state to the extent sought and needed. The absence of affordable property insurance threatens public health, safety, and welfare and likewise threatens the economic health of the state,” says the preamble of the bill. “The state, therefore, has a compelling public interest and a public purpose to assist in assuring that property in this state is insured and that it is insured at affordable rates so as to facilitate the remediation of damaged or destroyed property in order to reduce the negative effects otherwise resulting to the public health, the economy of the state, and to the revenues of the state and local governments.”