Damning Warning Issued Over Florida Insurance Market [View all]
The major private home insurers that have left Florida in the past couple of years are being replaced by smaller, lower-quality companies whose financial stability ratings wouldn't meet the minimum requirements set by government guidelines, according to a recent study.
The study, led by researchers at Harvard University, Columbia University and the Federal Reserve Board, is yet to be peer-reviewed but was published on SSRN, a website for scholarly papers, in December. It states that new insurers which are replacing the traditional ones in high-risk areas are "less diversified, hold less capital, and 20 percent of them become insolvent."
According to the researchers, the growth of these smaller, lower-quality insurers that are filling the gaps left by the exodus of bigger private companies can be traced back to "a lax insurance regulatory environment."
The Sunshine State is undergoing a crisis in its home insurance sector, with residents currently paying some of the highest premiums in the country. According to the Insurance Information Institute (Triple-I), the average Florida homeowners' premium already stands at $6,000.
https://www.msn.com/en-us/money/markets/damning-warning-issued-over-florida-insurance-market/ar-BB1lBdGB
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