At least one in all Allstate Insurance group’s Florida subsidiaries plans to non-renew 33,000 Florida condominium insurance policies, beginning in June.
In a discover despatched to Florida brokers this month, Allstate mentioned its Castle Key subsidiary had despatched a letter Jan. 11 to the Florida Office of Insurance Regulation about dropping the protection. The letter was marked “trade secret,” so particulars concerning the insurance policies weren’t made public by the OIR.
Allstate, which modified the title of its Florida subsidiaries in 2009, didn’t point out if Castle Key Insurance Co., Castle Key Indemnity Co., or each, are included in the motion.
“The entire industry is experiencing significant cost pressures,” due to more-frequent storms and better price of repairs, reads the bulletin from Caren Latona, Allstate’s Central East Zone gross sales director, and Shannon Bauer, Southeast regional gross sales supervisor.
The OIR should still disapprove the withdrawal, however Allstate’s memo to brokers sounded assured that regulators would enable it. The service mentioned it can present clients with the required 120-day discover prior to non-renewal dates. Agents could proceed to write condos via Citizens Property Insurance Corp., the memo added.
The transfer is one other squeeze on Florida condominium house owners and associations, which have seen different carriers non-renew, elevate premiums, or require extra inspection and security knowledge in the wake of the 2021 collapse of the Champlain Towers South close to Miami Beach. The late-night collapse killed 98 folks and led to important legislative reforms, requiring extra frequent inspections and extra restore funding to be reserved by condominium associations.
By shifting to Citizens, rental models will now face the added price of flood insurance coverage. Senate Bill 2A, adopted in the Florida Legislature’s particular session in December, now requires all Citizens policyholders to additionally get hold of flood insurance coverage, no matter elevation.
As of the third quarter of 2022, Castle Key Insurance and Castle Key Indemnity reported a mixed whole of 322,504 insurance policies in pressure in Florida and $462 million in whole written premium, in accordance to the Florida Office of Insurance Regulation. Castle Key Indemnity was ranked the seventh-largest property insurance coverage service in Florida for Q3 final yr, in accordance to OIR knowledge examined by the South Florida Sun Sentinel news outlet.
Allstate’s media relations workforce had not supplied additional information on the nonrenewals by Sunday. The news is probably not stunning, after Allstate Corp. mentioned final fall that it had incurred a net loss of $694 million for Q3. All of it has raised considerations in the business that extra nonrenewals by Allstate or different carriers could also be coming in 2023.
The news marks not less than the seventh main service to non-renew policies in Florida’s distressed insurance market since late 2021. That consists of six insurers which have gone bancrupt and one that’s in an orderly runoff. Last June, Allstate introduced it was suspended writing new Florida condominium enterprise, Florida’s former deputy insurance coverage commissioner, Lisa Miller, reported.
Senate Bill 2A and former reforms are anticipated to stabilize the market, cut back cut back litigation prices, and assist forestall additional market withdrawals from the Florida market. But officers have mentioned it might be one other yr or two earlier than the total impact is felt.
Just earlier than the nonrenewal announcement, Castle Key Indemnity Insurance additionally filed for 14.9% fee improve for its condominium program.
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Florida
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