TAMPA, Fla. — Homeowners will proceed to see a rise within the value to stay in paradise with one other surcharge tacked onto their insurance premiums in 2023. This is to assist the Florida Insurance Guaranty Association (FIGA) cowl the claims from insurance firms which have gone into receivership.
This new cost is the second to hit homeowners this year and the third in the last two years.
When an insurance firm goes bancrupt and is liquidated, the FIGA steps in and takes on all of its current claims and pays again premiums.
From 2013 to 2020, the nonprofit by no means needed to situation these assessments, however as firm after firm went into receivership final 12 months, they took on 1000’s of claims and tons of of hundreds of thousands in monetary duty.
FIGA’s government director Corey Neal, simply earlier than May’s particular session, mentioned that they had about 8,000 claims and anticipated possibly 2,000 extra in coming months, lots of these from St. Johns and Avatar Insurance.
However, that was a critical underestimate as a result of simply three months later, after Southern Fidelity after which Weston went beneath. Now, FIGA has about 14,000 claims it must pay out.
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“We need that money now,” Neal mentioned in a telephone interview on Sept. 6.
To assist cowl the associated fee, the Florida Office of Insurance Regulation approved another surcharge on current insurance firms within the state at 0.70%. That’s along with a March evaluation of 1.3%.
Those fees are then handed all the way down to homeowners of their premiums. You’ll discover a line beneath “Policy charges and credits” on your invoice that lists a “FIGA Surcharge.”
For instance, one Tampa home-owner’s premium in June 2022 was $9,000 and had a .70% FIGA surcharge of $63.00.
Tampa home-owner
Neal mentioned most premiums for the primary half of 2023 would see a complete of a 2% surcharge, relying on once they renewed final.
“We try to really base the assessment on a particular insolvency. So this latest one was really to help us cover Southern Fidelity Insurance Company which went insolvent in June of 22. So we’re expecting that to be anywhere from $170 to about $190 million. So what this assessment will do is, will help us shore that up,” Neal defined.
He added that as a result of they want the cash now, they’ve taken out a mortgage with Wells Fargo for $150 million and will pay it again with the surcharge funds as they arrive in.
In the final two years, FIGA has issued three surcharges — every after main insolvencies.
- In 2021 FIGA issued an evaluation of .70% to cowl claims from Gulfstream and American Capital.
- In early 2022, they issued a 1.3% evaluation for St. Johns and Avatar and some from Lighthouse.
- Now they’re issuing what they name 22b, one other .70% evaluation, primarily for Southern Fidelity and a few from Weston.
Neal mentioned as a result of we’re in hurricane season, their greatest process proper now’s ensuring they’re prepared if a storm hits, and they should take on 1000’s extra insurance policies in a single day.
The good news for homeowners is that 2% is the max evaluation FIGA can place on insurance firms in a single 12 months until there’s a hurricane within the state — then they will assess as much as one other 4%.
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