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Florida Insurance Law Blog

Florida-Based Insurer Cancels Thousands of Home Policies

Florida-Based Insurer People's Trust Insurance Cancels Thousands of Home Policies as Hurricane Season Approaches

People's Trust Insurance Co. cancelled more than 5,000 home insurance policies prior to the beginning of the 2014 hurricane season, delivering quite a blow to homeowners across Florida.

The move strikes many as unfair. There is minimal risk in collecting hurricane insurance premiums in the months when hurricanes rarely, if ever, occur. Canceling the policies in the spring and summer, when the risk of hurricanes increases, has led policyholders to question if this is legal. Unfortunately, the cancellations are entirely lawful, as a primary requirement regarding the cancellation of policies is a 90-day cancellation notice, and People's Trust took care to meet that requirement.

Under Florida law, an insurance company must also provide a proper cancellation notice if it changes the material terms of your insurance policy. For instance, if you previously had coverage for sinkhole loss but the insurance company later removed coverage for sinkhole loss, the insurance company must provide you a proper notice of cancellation. If a proper notice was not sent, the cancellation may not be effective. If your property insurer has changed the material terms of your policy and not provided a proper cancellation notice, you have options. Please contact us to discuss your options.

Insurers, Such As People's Trust Are Adept at Maximizing Profits

People's Trust experienced strong growth in the tri-county area and across the state in 2014, and that growth was presumably the result of aggressive and effective marketing and sales efforts. The pull back was therefore surprising, since it occurred less than a year after the expansion. The company's director of marketing explained this measure as a "prudent exposure management strategy" that will "more effectively diversify and balance the company's risk portfolio as [we] enter the 2014 hurricane season."

In other words, People's Trust is taking steps to avoid having to make payouts for future claims.

Though, as stated previously, People's Trust's mass policy cancelations are legal, it's important to keep in mind that insurers are often interested in protecting their best interests when policies are still valid and in force, and claims are filed. Insurance policies are invariably complex and are drafted by the insurers themselves, who have an eye on their own interests. When insurers deny claims or offer low-value settlement amounts, it often makes sense to question the move with the help of an attorney with experience in insurance claims and litigation.

If you need insurance law legal help in Florida regarding a sinkhole, fire, hurricane, storm damage or other matter relating to property insurance claims, contact Pekar Law P.A. by calling 813-712-8762.

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