"With the possibility of Erika's impact to South Florida, I would like to strongly encourage residents in those areas and across the state to begin making preparations now and to have a plan in place for their family and pets," Insurance Commissioner Kevin McCarty said. "A well-thought out plan will help to mitigate the effects of any storm. Property can be replaced, but lives are what really matter."
Whether Erika veers off, weakens, or plows right into South Florida early next week as a hurricane remains to be seen. But she represents more than a prospective test for individual homes and businesses. It also marks what could be a shakedown cruise for an insurance market where nearly all the growth in the past 10 years has come from small, unproven carriers.
As The Palm Beach Post reported at the start of hurricane season June 1, some insurers approved for offers to take customers from state-run Citizens Property Insurance Corp. can measure their existence more in months rather than years – not unlike toddlers.
One company, Mount Beacon Insurance Co., was so new its name was not even on a sign in front of its official address in state corporate records as the season began. It offered a St. Petersburg street address shortly afterward.
Another company that did not exist three years ago, Heritage Property and Casualty Insurance Co., cites trade-press reports declaring it the fastest-growing property insurer in the United States. It is now the state's fourth largest.
Industry groups and state officials alike have expressed confidence the companies are ready, thanks in part to beefed-up state standards and enhanced reinsurance coverage.
Still, many have never faced a hurricane. A record exodus from Citizens to homegrown Florida companies – by way of state-approved letters that automatically switch customers unless they refuse – has seen the state-run insurer shrink to less than 600,000 customers from a high near 1.5 million.
Florida Realtors August 27, 2015
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