TAMPA, Fla. (WFLA) – Florida homeowners will see their mortgages rise as the state’s property insurance crisis continues. Several insurance companies in the state have left the market, even after a special legislative meeting to address the needs of business and homeowners. Now, residents are also raising money from Florida-based companies.
In August, another insurance company was added to the list of providers he became a failurethe tenth as of April 2021. The Florida Insurance Guaranty Association is a state-created organization that “establishes and oversees the administration of the service for the repair of member defaulters.” FIGA was established and parliament in 1970.
For the second time in 2022, FIGA has paid interest to homeowners on their insurance premiums, so that they can reimburse the companies they received. This is the third time this has happened since 2020, according to FIGA. So far in 2022, the FIGA analysts have agreed to a 2% increase in income, and 1.3% was added in March and another 0.7% was added in August.
A 0.7% increase was approved on Aug. 19 after Florida Office of Insurance Regulation ordered to pay taxes.
Citing Florida law, FIGA said “members will be able to recover .70% assessment of their policyholders during the Assessment Year from January 1, 2023 to December 31, 2023.”
According to OIR’s new tax filing, “the liquidation of Southern Fidelity Insurance Company resulted in FIGA receiving more than 5,000 unpaid claims and recoveries of more than $178 million.”
FIGA told the OIR that its forecasted revenue would be “impacted” by the failure of Southern Fidelity. As a result, the nonprofit said it needs to raise additional funds to continue through 2023. A letter from FIGA to OIR said additional collections “will bring approximately $168 million to FIGA’s policy review” through Dec. 31, 2023.
The insolvencies across Florida property insurance companies come in the middle of the possibility of lowering the company’s ratings for 17 providers, which were delayed, not removed, and the opportunity for homeowners to be on the hook if their companies are downgraded or fail completely.
When Florida established a temporary maintenance In Demotech’s download, another insurance company is also trying to get out of the state. Demotech President Joe Petrelli told WFLA.com that the drop was delayed “until further notice,” after pressure from the state of Florida. However, state insurance commissioner David Altmaier has put about 30 other insurers on the watch list, according to a previous WFLA report.
At the end of July, OIR announced a temporary reinstatement with Citizens Property Insurance Corporation while its downgrades are assessed. The solution, according to OIR, “would allow insurers to meet the requirements of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation,” allowing Floridians to keep their homeowners during the hurricane.
“OIR’s priority is to ensure that consumers have access to insurance, especially during hurricane season; and because of the uncertainty with Demotech’s calculations, we have been forced to take action to protect millions of consumers,” Altmaier said in July.
Altmaier said expedited repair is a “new process” that would allow buyers to save money on purchases while allowing insurance agents to remain flexible, which would give lenders “confidence that these insurers continue to meet the mortgage’s eligibility.”
According to American Family Insurance, a national insurance company, property insurance is not technically, legally accepted for owner-occupied and non-mortgage homes, which are mortgages. If the resident owns the actual home, no renter is required to be paid, therefore, the insurance is optional. Most mortgage lenders require insurance.
Since July, more than 30% of houses those sold in Florida were paid for in cash, meaning there is no mortgage loan policy.
Bankrate, a consumer assistance company, says many insurers use a type of coverage known as replacement cost to calculate monthly and annual rates for plans used by homeowners. However, replacement cost refers to the cost of replacing or rebuilding a damaged building.
In the context of rising prices in the face of the global economic crisis, commodity prices, lack of skilled workers, and other supply chain problems have increased construction and maintenance costs. This has resulted in higher premiums.
The median sales price for Florida homes was $412,303, according to Florida Realtors. This means that if you have a mortgage, your rather expensivedepending on the type of insurance you have, it may cover the amount you paid for the home.
In order to deal with the failing insurance companies, assessment funds from FIGA have added additional funds to pay the insurance premiums paid by those who lost the money from the folded insurers.
Although the tax assessment increased by 2%, in 2020, the Florida Legislature allowed a significant increase due to the emergency. “Emergency Assessments increased from 2% to 4% annually during the 2020 legislative session,” according to FIG. Before 2015, insurance companies paid a fee to FIGA, then added interest on each claim until the money spent was repaid.
FIGA said that in 2015, the assessment law was amended by the legislature to allow FIGA to “acquire funds more quickly, and it also established a mechanism for insurers to pay assessments” after collection after one year. From 2013 to 2020, no statistics were provided, according to FIGA information.
Since 2020, the reviews have been given three times.
But, even with the added costs and extras, FIGA says that they grant up to $300,000 in application costs. This means that, at the median price of homes sold in July, Florida residents will not be able to repay the full amount of the mortgage if they want to repay the loan. Instead, they will be shorted $112,000 on average, depending on market conditions.
The Office of the Florida Chief Financial Officer says there are 15 companies in receivership, and 11 of the companies are insured.
By choosing the current policies, the money of the failed insurance companies is now given to the residents of Florida, so that the non-profit insurance state can recover the money to pay for the companies that went bankrupt. “A public meeting will be held on September 21 by FIGA to provide members with information on how to respond and return the additional funds collected in the 2022 assessment,” according to the company.