Yaworsky leads, surplus lines gain ground
Florida’s insurance commissioner comments on claims being closed without payment as he approves more roof endorsements restricting non-storm claims, more Citizens Insurance takeouts are approved, and the surge of surplus lines carriers in the Florida market. It’s all in this week’s Property Insurance News.
Florida Insurance Commissioner Michael Yaworsky
Yaworsky Leads: Two interesting tidbits came out of last week’s Tampa Bay Times sit-down interview with Florida Insurance Commissioner Michael Yaworsky, titled Why Florida’s new insurance commissioner is optimistic about homeowners’ rates. The first: that June reinsurance renewals turned out more favorably because they weren’t as steep as feared (+60% is what the commissioner said he had anticipated) and payment terms were better (reinsurers didn’t require full payment upfront from Florida insurance companies). The second: He acknowledges on Ian claims that flooding wasn’t covered on a lot of policies, “and on the latest data call, we’ve added a number of new fields of specific reasons why a claim might be closed without payment. And so we’re going to gather that data and look and see what might be going on in that space,” he told the Times.
Roof Endorsements: Meanwhile, Commissioner Yaworsky’s regulators are approving a growing number of roof endorsements that seek to exclude coverage for roofs that simply have routine wear and tear, poor workmanship, or design issues: in other words, endorsements that cover only true storm damage to a roof. There are now three carriers with those approved endorsements and we look for more. It prompts homeowners to replace their roofs when normal maintenance requires it, because a homeowners insurance policy is not a warranty policy. It’s why we’re big believers in policies that pay actual cash value rather than replacement or a flat stated value on roof damage, other than from hurricanes.
Citizens Takeouts: Florida insurance regulators have approved another takeout of homeowners policies from the state-backed Citizens Property Insurance Corporation by a private carrier. The latest one is for 46,000 polices and joins three other companies approved in February to takeout up to 20,000 personal residential policies. The legislature’s 2022 property insurance market reforms made policy acquisition easier by changing Citizens policyholder eligibility rules to further reduce Citizens policy count, which stands at 1.3 million. So we’re seeing a modicum of takeout activity going into hurricane season, with some companies expressing interest in Citizens policies they find attractive (read lower risk) while many other companies are taking a wait and see attitude. It could take just one hurricane this summer to diminish that appetite.
Click image to search surplus lines companies
Surplus Lines Surge: Commissioner Yaworsky’s Office of Insurance Regulation is out with its latest listing of New Entities to the Florida Insurance Market report. Among property insurance lines, there are 20 surplus lines companies listed compared to 2 traditional property & casualty carriers. Does this signal that that the Florida market is moving away from regulated forms and rates? We’d like to hear your perspective on the increase in surplus lines carriers that are largely unregulated. You can reach me at [email protected].
And finally, we’d like to applaud Rod Scott, Board Chairman of the Flood Mitigation Industry Association for his opinion piece published in the Orlando Sentinel and The Invading Sea last week, titled Retrofitting flood-prone buildings would help Florida economy. It’s a call for new funding dedicated to retrofitting older and vulnerable buildings. As our cities and coastlines continue to sink, we need to build higher and stronger.
LMA Newsletter of 6-26-23
