WINK NEWS

Florida’s property insurance crisis takes another turn for the worst after banker’s insurance will no longer insure Florida Homes.

That means for policyholders, more homeowners will have to find another option. For many that are becoming citizens, it was meant to be a last resort. And the state is eyeing a new role for the company amid this volatile market.

Citizens was set up as a last resort for Florida homeowners, but during a crumbling insurance market that might change.

“We are, have become over the last several months in many cases the insurer of first resort,” Michael Peltier, a Citizens spokesman said.

Citizens, the largest home insurer in Florida, are absorbing 7,000 to 8,000 new policies a week. And, Florida wants to lean on Citizens as a backstop.

“That is extremely problematic and it is a roadmap to disaster,” said Mark Friedlander, an Insurance Information Institute employee.

Dozens of Florida insurers are at risk of losing A-ratings because of financial stability. Demotech, the company that rates the insurers is taking another look and not making decisions for now.

But, Friedlander said the plan to use Citizens for reinsurance would be a bad one. And, it could possibly be putting Floridians’ last resort in financial trouble. “If they were to be hit with significant hurricane activity meaning significant property claim losses this season those reserves could quickly dwindle,” Friedlander said.

If those reserves become a deficit, it would affect all Florida policyholders. “The legislature created a mechanism by which citizens can levy surcharges on our policyholders first,” Peltier said. “If there is still a deficit then we are required to go out to homeowners policyholders automobile policyholders who aren’t our customers and our other policyholders and Levy assessments on their premiums.”

There is no word on if, or when, those Florida insurers will be downgraded. WINK News is following Demotech’s decision and will bring you updates as they become available.