Lexington Insurance, an AIG company, is pulling out of the Florida homeowners market, leaving an estimated 8,000 affluent customers looking for coverage.
And those homeowners likely won’t be able to turn to Citizens Property Insurance Corp., the state-backed insurer of last resort, which insures homes only up to $700,000 in much of the state, the South Florida Sun Sentinel newspaper reported. The Boston-based Lexington, classed as a surplus lines carrier in Florida, specializes in homes with replacement values of $1 million or more. The company appears to be discontinuing its personal lines division nationwide on Aug. 1, the news site said.
The Lexington announcement to local agents may be seen as the latest marker for Florida’s struggling property insurance market, beset by hurricane losses, roof claims and litigation. At least six other insurers have stopped writing new homeowner policies in the state or have non-renewed thousands of policies. Two of those companies, St. Johns and Avatar, have been deemed insolvent this year and more liquidations are expected, despite rising premiums for policyholders.
A number of stakeholders in Florida have urged the governor and top lawmakers to convene a special session of the Legislature soon to tackle reforms that could limit losses and litigation costs, before many insurers must purchase reinsurance on June 1. Reinsurance costs are expected to increase sharply then, jeopardizing more carriers.
The governor has said he is not opposed to a session if legislative leaders will call one. So far, House and Senate leaders have not indicated their intentions.
Was this article valuable?
Here are more articles you may enjoy.