As Florida seeks to revive its private home insurance market after almost a decade without a hurricane, homeowners are pouring $6 billion a year in premiums into a new generation of small, in-state insurance companies with an unproven record of withstanding a major hurricane.
A consumer-oriented rating agency, Weiss Ratings, recently awarded the companies a median grade of C-minus. And even without a major storm to drive up claims, 11 of them have already failed in Florida since 2006, according to state records.
The new in-state companies emerged after major national carriers pulled out of the market after a series of costly hurricanes in 1992, 2004 and 2005.
Robert Hartwig, president of the Insurance Information Institute, a trade association, said all the companies meet state regulations, noting that other rating agencies gave higher grades.