Insurance companies banned from dropping customers in Florida following Hurricane Ian | Florida News | Orlando

Insurance Commissioner David Altmaier issued an emergency order on Wednesday that will temporarily prevent property insurers from dropping customers in the wake of Hurricane Ian.

The order will suspend policy terminations or non-renewals for two months.

“Between September 28, 2022 and November 28, 2022, no insurer or other entity regulated by the Florida Insurance Code shall cancel or non-renew, or issue notice of cancellation or non-renewal of, any policy or a contract of insurance covering property or risk in Florida, except at the written request or with the written consent of the policyholder,” the order reads.

Additionally, the order will temporarily protect homeowners from losing their policies if their properties are damaged by Hurricane Ian. Under it, insurers will be prohibited from canceling or not renewing policies for at least 90 days after properties are repaired.

Altmaier issued similar orders after Hurricane Irma swept through much of the state in 2017 and Hurricane Michael devastated parts of northwest Florida in 2018.

But Wednesday’s order came amid widespread concerns about how Category 4 Hurricane Ian will affect an already struggling insurance market. Six carriers have been deemed insolvent since February, and other companies have dropped tens of thousands of policies in an attempt to stem financial losses, with many of those customers turning to the state-backed Citizens Property Insurance Corp. , for a blanket.

The hurricane made landfall Wednesday afternoon in southwest Florida and is expected to cross central Florida before entering the Atlantic Ocean.

Gov. Ron DeSantis said he’s confident Citizens, which was set up as an insurer of last resort and has nearly 1.1 million policies, will have no problem paying claims. Citizens has its largest political concentrations in Southeast Florida and the Tampa Bay area, both of which appear to have avoided Ian’s worst.

“I spoke with citizens. Their perspective, looking at the modeling of how much they should be paying…they have a surplus of about $6 (billion) to $7 billion,” DeSantis said, referring to the money available to pay claims. . “They think that once this storm clears and they pay all the claims, they will still have between $4 (billion) and $5 billion in surplus. So they feel good that they will be solvent thanks to this.

Bigger questions surround how Ian might affect private insurers. DeSantis called a special legislative session in May to try to shore up the industry, with lawmakers agreeing in part to spend $2 billion to provide what’s called a “layer” of reinsurance for property insurers.

Reinsurance, which is essentially standby insurance for carriers, plays a vital role in the Florida market. The $2 billion added to reinsurance the carriers purchased from reinsurance companies and the Florida Hurricane Catastrophe Fund, a state-run program.

A comment published late Tuesday by financial ratings agency AM Best said Hurricane Ian would be the “first test” for the $2 billion in reinsurance. The comment also pointed to potentially wider reassurance issues stemming from Ian.

“Property insurance in Florida is already a tough market, and this impending hurricane appears to make conditions even more demanding,” said Christopher Graham, senior industry analyst for AM Best, in a prepared statement. “Reinsurance rates are already rising, and a catastrophic hurricane will likely put more pressure on reinsurers to raise rates.”

DeSantis has said in recent days that a significant portion of Ian’s damage will come from flooding, which is largely insured through the National Flood Insurance Program, rather than private companies. He also pointed the finger on Wednesday at the reinsurance available to private insurers.

“For private carriers, it will largely depend on their financial situation,” he said. “Regulators, when approving their policies, do different stress tests. So this year they (the insurers) all had to stress test for a major storm entering Tampa Bay. They had to show that they were sufficiently capitalized to do so. They all, of course, have reinsurance and our CAT (Florida Hurricane Catastrophe Fund) fund is $17 billion. It has never been so high.

Kristan F. Talley