Insurance companies can and do drop coverage. In Florida, insurance carriers are doing it with homeowners’ insurance to keep from paying out on catastrophic losses, primarily due to hurricanes and the resultant flooding. It’s a trend that’s finding increasing traction among insurance carriers across the nation. It’s part of a money saving strategy insurers say is being fueled by the effects of climate change.
Hurricanes, floods and fires have left major damage in their wake and some Florida insurers have received permission from regulators to cancel policies to customers they deem are high-risk due to their location. It’s a remedy that regulators say is necessary so the insurance companies can stay in business.
The insurers have the option of canceling the policies or refusing to renew them. The situation is also affecting renters. Landlords are finding that they may have to pay more for insurance and they’re passing the costs on to tenants in the form of rent increases.
Florida law does allow insurance companies to drop coverage if a driver has had three or more accidents over three years, regardless of who was at fault. If a carrier does cancel an auto policy, individuals can ask why. The insurance company must tell the individual why and on what information they based their decision.
Insurers can also drop a policy, or fail to renew it, if an individual doesn’t pay their premium, lied on the application or otherwise misrepresented themselves to obtain the policy. An insurer can also drop a policy if the individual’s driver’s license has been suspended or revoked. They can also refuse to renew if they deem the individual a high-risk policy holder.
Many professionals in the insurance agency are already looking at ways they can profit from climate change. They’re reviewing the type of policies they offer and are making changes. Some policies may not be offered in the future and the coverage parameters will be different. Individuals can only wait to see what those changes and coverage options are in the future.
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The Sena Group
6501 Congress Ave., Ste. 100
Boca Raton, FL 33487