This week, the Insurance Information Institute announced that 27 out of 40 companies will have their rating lowered adding to the Florida homeowners insurance crisis.
Florida homeowners are paying nearly three times the national average for yearly property insurance premiums, according to statistics.
The state has not yet disclosed the full list of well-known Florida-based carriers, that will be downgraded from an A to an S rating.
Demotech intends to downgrade financial stability scores for 27 insurers to “S” for substantial or “M” for moderate. The problem is that carriers backed by Fannie May or Freddie Mac will not accept any companies not rated “A.”
Industry experts say the potential downgrades of the insurance companies will impact hundreds of thousands of families across Florida and put additional strain on the insurer of last resort, Citizens.
Also, Bankers Insurance Group, based out of St. Petersburg, has announced that it will stop insuring home two months into the hurricane season.
Policyholders will be notified of the cancellation within the state’s required 4-month window.
The company released a statement saying:
“This decision was difficult, however, necessary to allow us to grow responsibly and maintain our long-term financial objectives.”