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Hurricane Andrew, the four major storms
of 2004 and other disasters created quite a problem in the
insurance industry. Many companies struggled with monumental
losses, creating a significant disruption of Florida's
residential insurance marketplace. Some companies went out
of business. Others, to lessen their exposure to risk,
stopped offering policies in Florida or greatly reduced the
number of new policies they sell in the state. Still other
companies cut the number of Florida policyholders by not
renewing their coverage. This situation potentially affected
every policyholder in the state, even those who diligently
paid premiums for years without filing claims. Many
Floridians experienced homeowners insurance rate increases;
others were dropped or otherwise left without coverage.
Florida Market Assistance Program
(FMAP)
The Florida Market Assistance Program can
offer help if you can't find coverage. FMAP will supply
names and phone numbers of agents and agencies that
represent insurance companies accepting new business in your
county. For more information, call your agent or FMAP at
1-800-524-9023.
Surplus Lines Companies
The standard insurance market does not
necessarily insure every consumer risk. Standard companies
often reject risks that do not meet their underwriting
requirements for type and date of construction, location and
other conditions.
Surplus lines insurers can help fill this
need for consumers who can't obtain coverage from licensed
standard companies. Before turning to a surplus lines
insurer, your agent must apply for and receive rejections
from at least three licensed insurers.
Freedom from some insurance regulation,
such as coverage and rate filings, allows surplus lines
insurers to respond to unmet needs of insurance consumers.
The Florida Department of Financial Services does not issue
such insurers licenses to sell insurance in Florida.
Therefore, the Florida Insurance Guaranty Association does
not provide any coverage for claims if a surplus lines
company goes bankrupt. Surplus lines insurers, however, must
register with DFS as eligible insurers, and surplus lines
insurers that provide certain financial information can
receive approval from the Department.
Thoroughly read any surplus lines policy,
if purchased, since the Department does not regulate the
rates these companies charge or the forms they use. These
policies frequently involve differences in coverage and
deductibles not found in other policies - for example,
sinkhole or mold damage.
For more information regarding surplus
lines insurers, you may order our publication "Surplus Lines
Insurance: Insuring the Uninsurable" or view it online (LINK
TO SURPLUS LINES BROCHURE TARGET = NEW)
Insurance of 'Last Resort'
If you are having trouble finding
coverage, there is help. The 2002 Florida Legislature merged
the Florida Windstorm Underwriting Association and the
Florida Residential Property and Casualty Joint Underwriting
Association to form
Citizens Property Insurance Corp., which writes coverage
for consumers who can't find it elsewhere.
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