FedNat Insurance Company is canceling more than 56,000 policies.
If this affects you, you don’t have to worry, but you do have to act fast to get replacement coverage.
You’ve likely noticed that homeowners insurance rates have been skyrocketing in the past few years.
Higher premiums…less coverage…and you didn’t even file a claim!
Now, to add insult to injury, you’ve just received word that you’re losing your homeowners insurance altogether.
While this is a tense situation, we’re here to provide you with options.
Why Is My FedNat Insurance Policy Being Canceled?
After significant losses in Louisiana and Texas (partly due to Hurricane Ida), FedNat’s reserves were devastated. As a result, financial rating firm Demotech downgraded FedNat’s financial standing from “A-Exceptional” to “S-Substantial”.
While “Substantial” doesn’t sound too negative, many mortgage lenders (including Fannie Mae and Freddie Mac) will not accept anything less than an “Exceptional” rating.
Back in November of 2021, FedNat pulled out of Louisiana and Texas in an attempt to recoup their losses. But Florida’s hard insurance market (some have even gone so far as to call it a “dumpster fire”) proved too much for them to continue as-is.
You can read the full Consent Order here.
The Good News? It’s Not Your Fault!
While home insurance policies are sometimes canceled due to actions (or lack of actions) taken by homeowners—non-payment, fraud, excessive claims—this is a different ballgame.
The problem in this case seems to be systemic: a property insurance crisis brought on by an explosion of fraud and lawsuits.
It’s getting harder and harder to be an insurance company in Florida, especially in a state that’s home to 70% of the nation’s property insurance claim lawsuits (despite having only 9% of the country’s insurance claims).
What Do I Do Now?
The FedNat cancellations go into effect on June 29, 2022, so it’s crucial that you start shopping around for a new policy ASAP.
While this action won’t affect your insurance score, you should be aware that home insurance premiums are consistently high across all carriers. Florida has been in the midst of a hard insurance market for years and it doesn’t appear this will change any time soon.
However, working with an independent insurance agent is the best way to get the coverage you need for the best price available.
The beauty of an independent agent is that they can collect quotes from a wide range of carriers, giving you much more options to choose from. If you’ve never worked with an independent agency before, you might be shocked at the level of convenience, quality, and attention you receive!
Remember, June 29th is the date that your policy will expire—not the date you should start looking for new coverage! By the time your FedNat policy ends, you should already have a replacement.
Need a Replacement Policy? We Can Help!
At Harry Levine Insurance, we want Central Florida residents to know that we are here for them—whether they’re our current clients or not.
And if you are one of the households affected by this Consent Order, we’re here for you too. In fact, we expect to have replacement options ready to present and execute within 10 days!
Harry Levine Insurance has been providing Florida residents with unparalleled coverage and customer service for the past 35 years, and we have established a reputation as a pillar of the community. HLI was even named “2013 Business of the Year” by the Dr. Phillips Chamber of Commerce.
In short, we’re not just another insurance agency, we’re your neighbors.