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Florida Property Insurers Pass Government “Stress Test”

Pekar Law, P.A. Nov. 21, 2015

If a Hurricane Hits Florida, Will My Property Insurer Be Able to Pay My Claim?

A stress test recently performed by the state of Florida shows that 67 Florida-based insurance companies will be able to survive a future hurricane season. The publishing of the report has resulted in more confidence for consumers.

The stress test put all 67 private insurers through financial scenarios similar to the 2004 hurricane season, during which four major storms struck Florida. All companies also passed stress tests modeled after the 1947 and 1921 storm seasons. This means each company demonstrated that it has sufficient assets to pay out the claims of all of its clients in such catastrophic circumstances. This is significant, since, in 2004 alone, there were 1.6 million claims made in the state.

The report comes on the heels of a rapid shedding of policies by Florida’s Citizens Property Insurance Company. Many of those state-sponsored policies are being transferred to private carriers. The current report seems timed to give consumers confidence in their private insurance carriers, especially those new to the market.

Interestingly the report shows that some companies performed significantly better than others, having significantly more assets on hand after payouts than others do. Consumers, however, were not provided with this information. This failure to report such details to consumers is controversial. Insurers insist that keeping consumers in the dark about this matter prevents consumers from fleeing from the weakest companies to the strongest companies and negating the positive effects of the stress test on the market. Consumers and their advocates, however, say that it is unfair to keep such information secret if it could help homeowners increase their chances of receiving payment on future claims.

Since no one can foresee the future, no one can guarantee that past storm seasons are the worst that Florida will see. Moreover, it is a well-known fact that insurance companies regularly deny claims for any number of reasons, even though they are financially capable of paying them.

If you suffer damage to your home or property as a result of a storm, it is important to have an experienced, capable property insurance litigation attorney at your side, one who is informed about the laws pertinent in your home state and who is willing to fight vigorously for your interests.