Florida Insurance Cancellation Moratorium: What You Need to Know

Florida recently implemented a cancellation moratorium to help residents who are struggling to pay their insurance premiums. This means that insurance companies can't cancel policies for non-payment until further notice.

Many Floridians are still recovering from the impacts of Hurricane Ian and other natural disasters, which has led to a significant increase in insurance claims. This has put a strain on insurance companies, causing some to consider cancelling policies.

The moratorium applies to all types of insurance, including auto, home, and life insurance. This is a temporary measure intended to provide relief to those who are struggling to pay their premiums.

Insurance companies are still allowed to cancel policies for other reasons, such as non-payment of premiums after the moratorium ends.

Florida has specific laws governing insurance cancellations, which you should know about if you're considering purchasing a policy or already have one.

In Florida, an insurance company can cancel a property insurance policy within the first 90 days of the policy, as long as they provide a 20-day written notice to the policyholder.

This 90-day mark is a critical period, during which the insurer can still complete the underwriting process and decide not to cover the property.

After the 90-day mark, insurers can only rescind a property insurance policy for a few specific reasons, as outlined in Florida Statute § 627.4133.

Insurance cancellation moratoriums are typically implemented 24 to 48 hours prior to an anticipated event like a hurricane and remain in effect until the danger is over.

A moratorium could even persist after an event such as an earthquake due to the threat of subsequent aftershocks. The precise length of a moratorium is determined by the insurance company's evaluation of the risk and the repercussions of the calamity.

The government decides the timeframe of state-initiated moratoriums, considering factors such as the number of people impacted by the disaster, emergency assistance available, and communication systems active.

A moratorium imposed by insurance regulators, like the one in California during the pandemic, can last for over two years.

House Bill 989 has made some significant changes to the way insurance companies and professionals operate. Eligible surplus lines insurance companies are now required to respond to consumer complaints within 14 days, or face an administrative penalty of up to $5,000 per violation.

This new requirement is a major step forward in protecting consumers. The Department of Financial Services can now take action against companies that fail to respond to complaints.

Licensed adjusters are also affected by House Bill 989. They must now identify themselves in any advertisement, solicitation, or written document based on the adjuster appointment type held.

This means that consumers can now easily identify who they are dealing with and what their qualifications are. It's a big change from the previous system, where consumers had to dig around to find this information.

Here are the specific requirements for licensed adjusters:

House Bill 1503 made some significant changes to Citizens Property Insurance Corporation. One of the key changes allows surplus lines insurance companies to take out policies from Citizens for non-primary residences or homestead properties.

To qualify, the take-out insurance company must meet certain financial requirements, including a financial strength rating of A- or higher. The Office of Insurance Regulation must also approve the take-out plan, including its rates.

Surplus lines insurance companies that meet these requirements can now take out policies from Citizens for non-primary residences or homestead properties. This change became effective on May 13, 2024, when Governor DeSantis signed the bill.

Citizens policyholders who must purchase flood insurance are no longer required to buy coverage for personal contents. They only need to buy dwelling coverage to meet the Citizens flood insurance requirement.

House Bill 1185 was introduced in response to the increasing number of insurance cancellations due to the pandemic.

The bill aimed to provide relief to individuals and businesses who were struggling to pay their premiums.

It proposed a moratorium on insurance cancellations for a period of six months.

This would give policyholders time to get back on their feet and catch up on payments.

During this time, insurance companies would not be able to cancel policies due to non-payment.

The moratorium would also apply to new insurance policies, preventing companies from refusing to issue coverage to those who were struggling financially.

The bill was designed to support small businesses and individuals who were disproportionately affected by the pandemic.

It was a crucial step in protecting the livelihoods of those who were struggling to make ends meet.

By providing a temporary reprieve from insurance cancellations, the bill aimed to help people stay afloat during a difficult time.

The proposed moratorium would have been a significant help to many who were facing financial hardship.

The 90-Day Property Insurance Cancellation period is a crucial time frame that every property owner should be aware of. This period typically lasts for 90 days after purchasing an insurance policy.

During this time, the insurance company can cancel the policy if they determine not to underwrite the property. If they decide to cancel, they must send a written notice 20 days in advance.

The insurance company may cancel the policy for various reasons, but after the 90-day mark, their options are limited. They can only cancel the policy for specific reasons outlined in Florida Statute § 627.4133.

These reasons include a material misstatement, nonpayment of a premium, failure to comply with the underwriting requirements, a substantial change in risk, or if the cancellation applies to an entire class of insured persons.

If an insurer plans to cancel a policy for any of these reasons, they must provide written notice at least 45 days before the cancellation.

Here are the specific reasons for property insurance rescission after the 90-day mark:

A moratorium in home insurance is a temporary halt on issuing and modifying policies due to an impending natural disaster. This can be enacted by insurance companies or government officials to ensure they can pay out potential losses for existing policies.

Insurance companies can independently decide when to enact a moratorium, often just before major hurricanes. For example, many property insurance carriers issue an insurance moratorium on new policies in Florida just before major hurricanes.

The primary purpose of a moratorium is to protect insurance companies from financial loss during a disaster. This is why it's essential to review your homeowners policy once a year to ensure its coverage types and limits still meet your financial needs.

A moratorium can be in effect for several days or even weeks, depending on the severity of the disaster and the insurance company's evaluation of the risk. This can be frustrating for homeowners who need to purchase or modify their policies, but it's crucial for the insurance company's financial stability.

Here are some key facts about moratoriums in home insurance:

If you're unable to obtain insurance before a moratorium or find that you don't have enough coverage, a licensed insurance broker may be a beneficial resource. They may be aware of companies that are still accepting new policies and could help with researching your options.

In May 2022, the Florida Legislature held a Special Session to address property insurance, passing two bills that Governor DeSantis signed into law on May 26, 2022.

The two bills, Senate Bill 2D and Senate Bill 4D, included changes that affect property insurance policyholders.

These changes went into effect immediately after the governor's signature.

The Florida Legislature's swift action aimed to address the state's property insurance crisis.

Senate Bill 2D and Senate Bill 4D brought about significant changes to property insurance policies in Florida.

Governor DeSantis signed both bills on the same day, May 26, 2022, marking the end of the Special Legislative Session.

If your insurance policy has been unfairly rescinded, a Florida insurance lawyer can represent you in seeking to get the policy reinstated, or to recover any damages you may have suffered, including denied claims.

Michael B. Germain has experience representing consumers against insurance companies in Florida, particularly in Hillsborough County.

You can contact Germain Law Group, P.A. today at (813) 835-8888 or submit an online form to schedule a confidential review of your case.

Germain Law Group, P.A. zealously advocates for clients throughout Florida, including Hillsborough, Pasco, Pinellas, Polk, Hernando, and Citrus Counties.

Flood insurance is not included in a standard homeowners insurance policy, but it may be offered by your carrier as a standalone policy.

Flood insurance through private insurance companies may be subject to a moratorium, but it's essential to note that this is not applicable to flood insurance purchased through the National Flood Insurance Program (NFIP).

NFIP coverage typically has a 30-day waiting period from the date of policy initiation before coverage begins, which means you won't have immediate protection against flood damage.

There are some exceptions to the waiting period for flood insurance coverage, such as closing on a home purchase.

The Florida Legislature convened for a Special Session in December 2022 to address property insurance and other topics. They passed Senate Bill 2A, which made sweeping changes to the property insurance claims process, reinsurance, and regulation of insurance companies.

Senate Bill 2A was passed during this Special Session. The bill made significant changes to the property insurance claims process.

The Special Session in December 2022 had a specific focus on property insurance. The Legislature aimed to address the challenges facing the industry.

The changes made by Senate Bill 2A went into effect immediately. The bill's provisions were designed to improve the property insurance claims process and reduce costs for policyholders.

To review the bill in its entirety, you can visit the Florida Senate's website at https://www.flsenate.gov/Session/Bill/2022A/2A/BillText/er/PDF.

In Florida, an insurance company has a specific timeline to cancel a property insurance policy. For the first 90 days, an insurance company can cancel a policy if it determines not to underwrite the property.

If the insurer decides to cancel the policy during the 90 days, it must send a written notice 20 days in advance of the cancellation to inform the policyholder.

After the 90-day mark, the reasons for cancellation are limited. The law states that an insurer may only cancel a policy for specific reasons, including a material misstatement, nonpayment of a premium, or a substantial change in risk.

These reasons are outlined in Florida Statute § 627.4133, and if an insurer plans to cancel a policy for any of these reasons, it must provide written notice at least 45 days before the cancellation.

Here are the specific reasons for cancellation after the 90-day mark:

Florida's insurance crisis is deepening, with some homeowners facing cancellation of their policies.

Mobile home insurer AMIE is canceling its policies across the state due to growing reinsurance costs. The company informed policyholders and agents in March that it would cancel over 1,100 policies within 45 days.

The cancellations are part of AMIE's plan to withdraw from the mobile homeowners market in Florida prior to the 2024 hurricane season. This decision is likely to exacerbate problems faced by mobile homeowners in Florida.

Experts expect the 2024 hurricane season to be particularly busy and potentially devastating for the state. AMIE's reinsurance costs have become bigger than its written premiums on mobile homes in the state.

The average annual rate for mobile home insurance in Florida is around $1,210, with American Traditions being the cheapest option. However, many homeowners may struggle to find coverage, especially if they own an older property.

Between 15 and 20 percent of homeowners in Florida are uninsured, the highest percentage in the nation. This number is likely to increase as some homeowners may choose to go without insurance completely.

Florida's insurance cancellation moratorium is a complex topic, but I'm here to break it down for you.

The length of a moratorium in insurance will depend on each company, but it usually starts a few days before a natural disaster is expected to impact an area and ends once the disaster has passed. Your insurance agent may be able to advise you on these dates and any updates from the company due to a change in the storm pattern.

In most scenarios, an insurance company can start and end a moratorium on homeowners insurance policies without guidance from the government, especially in response to natural disasters.

A state government can impose a different type of moratorium on insurance companies to prevent insurance companies from canceling or not renewing policies during and after a natural disaster. One example is the California fire insurance moratorium, which issues a one-year moratorium on nonrenewals for property policies in specific ZIP codes.

Renters insurance can be put under a moratorium, just like any other type of property insurance. A licensed insurance agent or representative of the insurance company you're interested in may have more information.

Here's a quick rundown of the types of moratoriums that may be imposed: