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More Florida Home Insurance Cancellations on the Way

Author: Michael Letcher

Just when you thought that most of the Florida home insurance cancellations were a thing of that past, new threats to your homeowners insurance coverage are on the horizon. And these cancellations are occurring at a time when home insurance rates in Florida are rising despite the nationwide recession.

For starters Florida's largest private home insurance company just reached agreement with the state this month to cancel 125,000 policies.

Newer Florida start-up insurance companies are moving forward with selective policy cancellations in South Florida coastal counties in order to balance their exposure and to comply with the terms of their reinsurance coverage. Those cancellations have been particularly noticeable in Dade, Broward, Palm Beach, Collier, and Sarasota counties.

Many insurance companies in Florida will be inspecting each and every home they currently cover. If those inspections find missing hurricane shutters, a roof in poor condition, or weak wall to roof connections your Florida home insurance policy could be cancelled.

Finally, Florida home insurance rates are starting to increase again. Many companies have already filed for and received permission to raise rates from 10% to 20% in the second half of 2009.

As Florida absorbs this next wave of cancellations and rising prices, here is what you should do if your Florida home insurance policy has been cancelled in order to find new coverage for your home:

Do not panic. Florida State law requires insurance companies to give you six months notice before cancelling your policy. That should give you enough time to find a new policy before the Florida hurricane season begins in June of 2010.

Contact at least five different independent Florida homeowners insurance agents about your situation. That will ensure that you will be able to reach most of the home insurance companies still writing new business in your Florida County. While your present home insurance agent in Florida can give you some options, odds are that you will not be able to get a quote from them from all the companies who are open for business in your Florida County.

Look for Florida home insurance companies that have shown a willingness to cover older homes - those built before 1995. Some companies in Florida will cover a home over 40 years of age if the major systems in your home have been updated.

Ask each homeowners insurance agent to provide you with companies that are interested in covering homes in the South Florida coastal counties and those within 10 miles or less of the coast.

Get a quote from as many Florida home insurance companies that are open for business in your county and make sure each quote has identical coverage.

Try to find a company that has been selling homeowners insurance in Florida since the early 1990's. Those companies have the most experience handling claims because they met the challenges of the Florida hurricanes of 2004 and 2005.

Check out the customer service record and complaint history of each Florida home insurance company. The best Florida based companies should have a favorable complaint history consistent with other companies that don't do business in the state.

Ask your agent to show you how each company has diversified its risk across Florida and in other states as well. What you are looking for are companies that have spread their risk across a significant number of Florida counties and into other states. The Florida counties should include a reasonable balance of southern coastal and northern interior counties.

Check out the financial ratings assigned to each company and the amount of surplus each company has available to pay claims. Try to find a company a surplus significantly larger than the $5 million minimum required by the State of Florida. If you are considering two different companies that have the same financial rating, select the company that has a larger surplus and more risk diversification across Florida.

While it can be a shock to lose your Florida home insurance policy be sure to ask for all the information described above. This will give you the best chance of finding a new Florida home insurance company if your policy is cancelled.

Michael Letcher is a corporate executive and a licensed CPA. His on-line database helps can help you find low cost Florida homeowners insurance. Find out the secrets to affordable Florida insurance at

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