Company Dumps Florida Insurance Policies

More Than 38,000 Policies to Be Cancelled

Earlier this week, Florida Governor Charlie Crist signed an emergency rule week to freeze insurance rates and enact a moratorium on nonrenewals for 90 days and prevents cancellations through the end of the hurricane season, Nov. 30. The move was designed to lock in insurance rates until after Hurricane season has passed, but it seems to have backfired. Insurance companies are now looking away from Florida, and more than 38,000 residents will have their policies cancelled.

The move came following a special session for the Florida Legislature that was called on January 16-22. The session included an expansion of the State's catastrophe fund, which would provide insurance company's cheaper reinsurance than they could obtain through ordinary channels. The provision made the process cheaper for insurance agencies, provided that they pass those savings on to their customers. The measure should have been a boon to insurance companies, but when combined with the emergency rule implemented by the Governor, it has caused several insurance brokers to take a step back to re-evaluate whether or not they want to offer insurance to Florida residents.

"The irony here is prior to the legislative session, we were actually opening up a matrix to allow more new business," said Don Matz, President of Tower Hill Insurance Group. "We were being very bullish, but now we are taking a step back and reassessing our strategy."

Matz's company announced on Friday that they would cease writing new insurance policies for 16 Florida counties, including Hillsborough, Pinellas and Pasco. The company firmly states that they are not 'pulling out' of the State, but it is clear that they are firmly restricting their insurance business in Florida.