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Florida homeowners deal with insurance challenges

Following brouhaha over the replacement of sulfurous Chinese drywall, homeowners in Florida are facing more insurance troubles.

Nationwide Insurance Co. of Florida announced that, in a cost-cutting bid, it will be dropping 60,000 policies in 2010. And the state’s largest home insurer, Citizens Property Insurance Corp., plans to hike its rates 10 percent, pending approval by the Florida insurance regulator’s office.

Industry groups say in an AP article that the rate increase at Citizens – a state-sponsored insurer for those without private insurance options – is long overdue. Florida insurers have to cover against the massive losses that a hurricane could incur, and rates for Citizens insurance have not increased in recent years, leaving the company in a perilous position.

Should a hurricane strike, says insurance commissioner Kevin McCarty, Florida insurers risk $2.1 trillion in losses.

Nationwide’s plan to not renew 60,000 homeowners’ policies will leave it with about 275,000 policies statewide. Florida Peninsula Insurance Co. announced that it will offer coverage to the customers Nationwide is dropping.

Florida Peninsula did the same for former State Farm policyholders in February, when that company did not renew 100,000 policies.

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Posted: October 26, 2009

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