A New Home Insurer Enters the Market
The Florida Office of Insurance Regulation (OIR) has approved the Texas based Mainsail Insurance Company (a property and casualty insurer) as a new property insurer for the state of Florida. Due to hurricanes and their wind and water damage to homes and commercial enterprises, many property insurers have left the state, resulting in a dearth of home insurers. The company has been approved to provide insurance for 17 different types of insurance coverage, including property, auto, and commercial.
The OIR also announced that it has approved insurance companies to assume almost 300,000 policies from Citizens Property Insurance Company (CPIC). This would lower the burden on the state-run insurer which is, in essence, is paid for by Florida taxpayers and commercial entities. When the plan goes into effect in October, this action will lower the burden of the CPIC.
Mainsail is now the second insurer to enter the Florida market, the first being Tailrow, in April, following the passage of HB 837. This new insurance law is intended to entice new insurance companies to enter the Florida market, by lowering the four-year statute of limitations to two years, limiting bad faith lawsuits against insurers Et al.
At the time of the bill signing, Florida homeowners paid nearly three times higher than the national average for home insurance, according to the Insurance Information Institute, partly because of an exodus of insurers that have left the state. At the start of the current calendar year, 15 insurers have been deemed insolvent since 2020, leaving Floridians with a dwindling number of market options.
OIR documents show that other insurers, such as Safepoint Insurance Company submitted a proposal to acquire 30,000 lines of coverage from Citizens. Similarly, Southern Oak Insurance requested to take on 25,000 policies from Citizens. Both motions were approved.
In addition, Senate Bill 2-A and Senate Bill 2-D allows insurance companies to assume policies currently held by Citizens.
The state-run Citizens was created as an insurer of last resort and has become the largest property insurer in the state since many insurers have fled the state for reasons alluded to earlier. Citizens is also significantly less expensive than other insurers.
Citizens CEO Tim Cerio noted that a plan is underway to raise premiums so that they are in line with private insurers. Earlier this year the Citizens Board of Governors passed a proposal to petition the OIR to raise rates 14.2%