Will Your Homeowners Policy Pay When The Storm Hits?
Insurance is vitally important for homeowners. For most people, their house is the largest investment they will make in their lifetime. This amount of money is not spent in vain and a good insurance policy gives peace of mind that your investment will be protected from unexpected emergencies, like fire and serious weather. Floridians are particularly vulnerable to these potential problems, due to the state’s susceptibility to storms and hurricanes. When these potentially devastating events occur, homeowners expect that the money they put into their policies will pay off and reimburse them for damage to their homes. But a recent report by Reuters is casting a shadow of doubt over that expectation.
The residents of Florida are fortunate that no major storms have directly hit the state in the past few years. This good fortune created a new breed of home-grown insurance companies that are considerably smaller than their national counterparts. According to the report, a number of major home insurance agencies stopped offering insurance within the state, after a series of serious hurricanes that resulted in major payouts. They were replaced with these newer generation of companies. Although this may seem like a good alternative, the report explains that the reliability of these agencies is untested.
Gavin Magor is a senior financial analyst with Weiss, a consumer-based agency that rates insurance companies. He is quoted in the article as stating, “This is an accident waiting to happen.” The agency reportedly rated 48 Florida home insurance carriers and 19 received grades of D-plus or worse. These low ratings translate into high risks for the consumers who depend on them to pay claims when a storm does hit.
The Potential Effect for Florida Homeowners
When major storms hit, the property damage can become astronomically high and the insurance claims pour in all at one time. If the companies are not adequately funded, they are unable to pay out on all of the legitimate claims, leaving residents without the resources to rebuild and move on with their lives. “That is zero comfort for the consumer,” explained Magor. “If your insurer fails when you need to make a claim, that is a disaster from the consumer perspective.” According to the Reuters report, homeowners are pouring more than $6 billion each year into insurance policies that are reportedly unable to withstand a major storm.
When insurance claims go unpaid, homeowners generally must dispute the issue. Under Florida law, you are given the option of filing a complaint with the Florida Office of Insurance Regulation, as well as seeking compensation from the courts to force payment of your homeowners’ insurance claim. Insurance agencies tend to employ a number of lawyers who are skilled in fighting insurance claims. This can prove challenging for a homeowner who is already under a great deal of stress. That is why the assistance of an experienced lawyer is vital for success.