In the state of Florida it's not uncommon to find yourself scrambling to find a alternate policy because you were dropped by your current Florida homeowners' carrier. First you must determine what type of drop we are talking about, here are two types:

A non-renewal is a choice by the insurance company to no longer cover your home; a non renewal occurs near the termination date of the annual policy period. Non renewals in Florida are common and are typically related to overexposure in a particular area. Many carriers are withdrawing from the Florida market in general. If this is the case it typically will not prevent you from securing replacement coverage.

A cancelation is a larger concern as it may relate to something more specific to complying with the carriers underwriting guidelines such as omitting pertinent facts on the application, the results of a home inspection that exposed lack of upkeep of the property such as tree limbs, trash on the property or liability issues. Any of these could result in a cancelation and could create problems to securing a new carrier if left unresolved.

What is Going on with the Florida Homeowners Market?

Just in the past few years we have experienced thousands of exposure reductions from major carriers like the SFarm and Nationwide who are no longer writing Florida homeowners Insurance. Most recently Homewise reduced exposure of about 60,000 customers throughout the state of Florida. The policy reductions created a funnel of homeowners being directed over to the overexposed state run Citizens of Florida.

Citizen of Florida in an effort to maintain proper surplus to cover claims began a takeout process several years ago of transferring books of customers to other companies Unfortunately Some companies such as Magnolia and Northern Capital were forced into receivership earlier this year because they were unable to effectively maintain the $4 million of surplus required by the state regulators putting us back where we started.

What Can You Do if You Were Dropped by Your Florida Homeowners Carrier

While concern is a natural reaction don't become overly alarmed as this seems to be a recurring incident in Florida and one that may continue. Your insurance carrier is required by Florida law to notify you with 100 days written notice specifically stating the reason for the cancelation and or nonrenewal. If you have a claim with a company that goes into liquidation for insolvency contact the Florida Insurance Guaranty Association.

If you were simply non- renewed contact your agent and they will take of everything for you or shop around with an independent agent to research the best replacement coverage for your home and situation. If you were non renewed and hurricane season is approaching your agent can shop the carriers and provide a pain free switch by canceling the old carrier and requesting a refund for you and binding the new policy simultaneously preventing gaps in coverage. The age of your home and/or updates you have completed on your home specifically, roof, plumbing, electrical will play a big part in determining what carrier options are available to you. If the home is really old you may be forced back into Citizens property and casualty as your only option.

Also take note that Insurance Companies use a database called CLUE or Comprehensive Loss Underwriting Exchange where they can review past claims, residential stability,credit and the likelihood of future claims. Typically if it has been over 5 years since you had a claim you should be ok but if you had a sinkhole or water damage claim in the last 1-3 years you may have limited options. Again talk with your agent about your best options.

Review Insurance Companies for Financial Stability and Time since Last Rate Increase

A Florida Insurance Advocate provide financial ratings for each insurance company allowing Floridians to make more well-informed decisions when it comes to selecting an insurance company. You can review the financial stability of a company online at AM Best or Demotech Rating Services. Additionally by law Insurers are now required to pay claims in a timely manner and are prevented from raising rates and dropping policies during hurricane season. Companies must return excess profits and be truthful with regulators about any rate increase requests.