The recent bankruptcies of seven property insurers in Florida have left thousands of homeowners struggling to find new coverage, highlighting significant weaknesses in the state’s insurance market and the broader implications for residents and businesses.
- Seven property insurers in Florida went bankrupt in 2021 and 2022, leaving thousands of homeowners scrambling to get new coverage with significant cost increases
- Jacqueline Ravelo, a Miami homeowner, experienced this issue when her insurer, Avatar Property and Casualty, went out of business as she was about to settle a claim for further repairs after Hurricane Irma
- Avatar and the other six bankrupt insurers had all been rated A or higher by Demotech, Inc., an Ohio-based insurance ratings firm
- Nearly 20% of companies rated as financially stable by Demotech went insolvent between 2009 and 2022, according to research by Harvard University, Columbia University, and the Federal Reserve
- Researchers suggest Florida’s insurance market may be even more precarious than known, with weak players and lax regulation
- Climate change and the aging population in Florida are colliding, causing commercial-property insurance costs to surge and affecting industries like elder care
- Filicia Porter closed her assisted-living facilities due to skyrocketing insurance costs, highlighting the broader impact on senior care providers
- Palm Garden Healthcare’s insurance costs more than doubled in two years, and operators are struggling to manage ballooning bills without sufficient Medicaid reimbursements
- Damage from natural disasters doubled from 2019 to 2023 compared to the previous decade, increasing claims and causing some insurers to fold
- Despite expectations of new insurers entering the market, operators are still finding it difficult to manage costs, impacting cash flow and debt coverage
- The senior living industry in Florida faces a high default rate on debt, exacerbated by the pandemic and hurricanes
- Nursing home and assisted-living facility closures are increasing as demand grows and prospects for new facilities dim
Sources:
https://finance.yahoo.com/news/florida-home-insurance-industry-may-110021317.html
https://www.fa-mag.com/news/florida-s-125–surge-in-property-insurance-bills-sows-havoc-78148.html