Being dropped by our home insurer.

[floridafam]

We live in FL and received a cancellation notice today. We aren’t even due to renew until November. We do not live on the water and have a newer roof, impact windows and doors, etc. we did everything we were supposed to do.

We have never filed a claim and have been here nearly twenty years.

 

[Communicore1991]

Have they told you why? Maybe there's a means to appeal it?

 

[kymom99]

Mine was cancelled accidentally. It was stressful. Call them and ask why.

 

[barkley]

i'm so sorry for you. this has been a worrisome issue for my brother who lives in an area of california near where the terrible fires were a couple of years ago-he's had several friends notified by their insurance companies that they are canceling coverage at the end of the homeowner's current term of coverage so they are left scrambling trying to find companies that will cover them. people who have never submitted a claim, paid timely, take every safety precaution to protect their homes from damage but they get bundled into the risk criteria that the insurance companies are unwilling to continue to cover.

 

[Southernmiss]

Is the company backing out of having policies in your area?

Insurance companies cut losses and stop doing business altogether in a non-profitable-to-them area, no matter your individual situation.


Lots of that happened here after Katrina.

Our home was 2 years old and we had a very small claim.

 

[DVC-Don]

You don't mention the company, there are some companies here in Florida that are going out of business. Too many claims, not enough reserves to pay.

 

[Bianca and Bernard]

We live in FL and received a cancellation notice today. We aren’t even due to renew until November. We do not live on the water and have a newer roof, impact windows and doors, etc. we did everything we were supposed to do.

We have never filed a claim and have been here nearly twenty years.

I read somewhere a lot of insurance companies are pulling from FL again. They're either closing down completely, or pulling out because claim costs are (excuse the pun) through the roof.

 

[floridafam]

The company is Federated National. I guess they are dropping about 56,000 customers.

 

[Kennywood]

The cancellations were not accidental.

Here's the story about what is happening: FedNat to Cancel 56,000 Policies Under Restructuring Plan

 

[bcla]

I read somewhere a lot of insurance companies are pulling from FL again. They're either closing down completely, or pulling out because claim costs are (excuse the pun) through the roof.

It's obviously natural disaster risk and building codes. I got curious about how much it would cost to move to Florida (there are some decent employers) but then I realized that even if I could buy a home with cash from my current home sale, the cost of insurance would be similar even though the home price was much lower and I live in a fire-prone area.

 

[Mackenzie Click-Mickelson]

Having worked for insurance it's not surprising.

The company I worked for MI was pretty much never profitable, CA was awful and there were some reasons they stuck around in CA despite that state being terrible. They refused to write insurance in FL (and the Carolinas amongst a few other states) either due to insurance laws (including lack of) or losses.

Sounds like it's a combination of specific areas as the article posted mentioned they pulled out of several states and their losses being too great pulling down their credit rating. Canceling a portion of their policies and pulling out of several states is their present way to sticking around as a company instead of completely folding.

It tends to be forgotten but insurance is a pool of money. Losses elsewhere affect you. Your area can experience a loss contributing to the overall health of the company but so can others. I remember Sandy and Joplin being big hits that affected for quite a while for example.

 

[MillauFr]

And remember loyalty means nothing to these companies. They don't care if you have been with them 30+ years with zero claims. That matters nothing.

 

[Mackenzie Click-Mickelson]

And remember loyalty means nothing to these companies. They don't care if you have been with them 30+ years with zero claims. That matters nothing.

When it comes to cancellations the OP is likely experiencing loyalty can't matter. If you're in a spot where you're costing the company a significant amount of money or your area or your home itself (like construction of it, age, type, etc) presents a high risk of a loss (even if you personally haven't) they don't really have the ability to use loyalty. In fact loyalty to the customer may be exactly what got the company into issues, sticking with high risk areas longer than they feasibly can.

 

[MillauFr]

When it comes to cancellations the OP is likely experiencing loyalty can't matter. If you're in a spot where you're costing the company a significant amount of money or your area or your home itself (like construction of it, age, type, etc) presents a high risk of a loss (even if you personally haven't) they don't really have the ability to use loyalty. In fact loyalty to the customer may be exactly what got the company into issues, sticking with high risk areas longer than they feasibly can.

What I can't figure out is why any insurance company would insure anyone and any price that lives along the coast in Florida. Same thing with those fire prone areas in California. Why even bother writing policies that are so risky?

 

[Mackenzie Click-Mickelson]

What I can't figure out is why any insurance company would insure anyone and any price that lives along the coast in Florida. Same thing with those fire prone areas in California. Why even bother writing policies that are so risky?

I'm totally with you on that one.

 

[_19disnA]

All insurances are for profit businesses, some apparently think they can make money by undercutting the competition and come out ahead in the long run. They make money by collecting more in premiums then they payout in claims. If they mis-calculated the risk of any particular area they cover, then clearly they will have financial problems. The above article talks about a 'restructuring' which sounds like the premiums they were collecting weren't enough to cover the claims they were paying out and now have too little left to pay future claims. Probably a good reason to have home insurance with one of the larger companies since they have a bigger base of customers to cover the cost of claims.

 

[Praying Colonel]

Florida is holding a special legislative session to address property insurance issues. This article calls it a crisis, noting that 3 insurance companies in the past 3 months have stopped writing policies:

https://www.tallahassee.com/story/n...address-property-insurance-crisis/9544439002/

 

[Mackenzie Click-Mickelson]

All insurances are for profit businesses, some apparently think they can make money by undercutting the competition and come out ahead in the long run. They make money by collecting more in premiums then they payout in claims. If they mis-calculated the risk of any particular area they cover, then clearly they will have financial problems. The above article talks about a 'restructuring' which sounds like the premiums they were collecting weren't enough to cover the claims they were paying out and now have too little left to pay future claims. Probably a good reason to have home insurance with one of the larger companies since they have a bigger base of customers to cover the cost of claims.

I agree with having one of the large companies although it also matters what they are (like Preferred vs Standard) but that alone won't preclude what the OP's insurance company is dealing with.

Insurance companies have built in loss ratios they expect and then they adjust them due to CAT losses (ours referred to the expected profit as CAT smoothed meaning once expected CAT losses were accounted for). Some years there is just enough collectively to go over those expected CAT losses. And we're talking the big companies, ones who can expect to pay out close to or over a billion in losses per year in just CAT losses (so not your everyday claims). A larger base of customers is both good and bad. Good because it can spread the pool of available premiums but bad because it can also spread the pool of losses across a wide market of both natural disasters and your average claims. Joplin for instance was such a large issue for multiple very large, well-known companies. And you better believe that people half-way across the country were being charged premiums to help recoup losses.

A large high rated company can reduce the likelihood of a customer being cancelled just because but it doesn't mean the same issues don't exist and that they won't happen to someone. Big companies have pulled out of states in the past, arguably though they may be faster at doing so with their actuaries reflecting it's time to go.

 

[WhatDinosaur]

It will be interesting to see what the state will do. They can’t force business to operate there. And the state leading a program to pool resources to help everyone (spreading the payment around) doesn’t jive with their views on other things lately.

They also seem unwilling to do anything to combat the cause of the worsening hurricane seasons year after year, if they even acknowledge the reason.

 

[floridafam]

I’m guessing the state will do nothing.

We did so much to our house and it feels like a punch in the gut.