The Florida homeowners insurance market is the strongest it has been in 10 years. Florida companies, which make up a majority of this market, have built $4.5 billion in surplus, $16 billion in reinsurance capacity and renewed profitability that has created new competition in the market. As a result, Florida consumers now have more options and choices for homeowners coverage.
In his June 25 column “Another costly homeowners insurance mistake for Florida,” theTimes’ John Romano made several comments requiring clarification on the recent failure of Sunshine State Insurance Co., an insurer with 37,684 of the approximately 6.1 million residential property policies in Florida.
These failures do not happen as frequently as claimed. Over the past 10 years, eight homeowners insurance companies that assumed policies from the state-backed Citizens Property Insurance Corp. or its predecessor have failed. This is in a universe today of 119 companies with homeowners policies in Florida.
To the column’s point, there were indeed no hurricanes during the more recent period when four of those eight failed. But there were sinkholes. According to our data, companies have lost billions of dollars in sinkhole claims in recent years. It wasn’t a hurricane catastrophe, but it was nevertheless a claims catastrophe, which the Legislature subsequently — and successfully — addressed. The industry endured one of the worst economic periods since the Great Depression and has only returned to profitability in the past few years.