Ratings agency plans to downgrade 27 Florida-based property insurance companies

TALLAHASSEE – CBS4 has realized a rankings agency plans to downgrade 27 of the 40 Florida-based property insurance companies.  

It’s a transfer that might depart thousands and thousands of house owners statewide paying extra, even leaving some scrambling to discover a new insurer.

“Very dramatically impact the market down here, the real estate market, the housing market, everything,” stated Alex Ray, Director of Marketing and Sales for John Galt Insurance.

“It’s kind of nightmare, quite frankly,” added Parkland resident Gordon Light.

He’s lived in Parkland for almost three a long time.  Recently, two completely different insurance companies dropped him up to now 12 months, together with state-run Citizens.

“All of the sudden, I get a termination notice, cancellation, and I go, are you serious,” added Light.

Multiple insurers have canceled his property insurance, and he is additionally been paying hundreds extra yearly in insurance premiums.

“I don’t know what needs to be done, but something needs to be done,” stated Light.

John Galt Insurance related Light to land a brand new coverage. 

And relying on Tuesday’s consequence, Ray expects the necessity to develop by the thousands and thousands in Florida.

But that is not the worst half.

“The harsh reality is people will have to sell their houses because they can’t afford the insurance,” talked about Ray.

It’s a grim outlook based mostly on projections that the agency Demotech will downgrade monetary stability scores for 27 insurers to an “S” for substantial or “M” for average.

Big image: in case your mortgage provider is backed federally by Fannie Mae or Freddie Mac, they will not settle for something lower than an “A” ranking.  

Ray provides individuals would then be at risk of defaulting on their house loans.

“Forced to find alternate insurance in this market or take force-place insurance from their lender,” stated Ray.

Ray says mortgage firm force-placed insurance tends to be dearer and offers much less protection.

And with much less certified insurers, “trying to add all these policies that need to be rewritten is not a feasible solution,” continued Ray.

State Rep. Danny Perez says he understands the monetary burden owners face.

“Anything that could potentially raise the rates for the homeowners” insurance market is regarding for us,” stressed Perez.  “It must be.”

He mentions that’s why legislation was passed in a special session in May to address this problem.

“It’s disheartening to see the market pattern within the improper route,” stated Perez.

Adding lawmakers understood it might take 18 to 24 months for Floridians to see optimistic change.  Eyeing the reinsurance fund for carriers to cut back prices for owners.

“Those carriers that use this assistance fund will have to decrease the premiums using those specific carriers mandatorily,” added Perez.

As to what number of carriers will stay solvent stays to be seen.  Ray estimates just a few extra to go stomach up in 2022.  He says insurance companies in Florida reported greater than 1.5 billion {dollars} in losses final 12 months alone.

Ray additionally informed CBS4 that Florida is interesting for federal mortgage guarantors to acknowledge the “S” ranking from Demotech. 

He provides this may assist the insurance market and the common house owner in Florida.

The report comes out Tuesday.

The housing disaster is leaving many determined for assist. That’s why CBS News Miami desires to share your tales to present the disaster you are in or the way you navigated the system. We will spotlight these points and work to get solutions and options. Send us an electronic mail: [email protected].