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Florida insurance costs set to rise due to failed insurers

March 6, 2022 GMT

FORT LAUDERDALE, Fla. (AP) — Florida homeowners are about to pay more in insurance premiums, and they have failed insurance companies to blame.

The South Florida Sun Sentinel reported Sunday that late last month the Florida Insurance Guaranty Association approved a 1.3% assessment on the premium cost of all policies sold in Florida. That not only includes homeowners insurance but aircraft, crops, flood and malpractice insurance policies.

The Florida Insurance Guaranty Association (FIGA) was created by the state Legislature in 1970 to handle claims of insolvent property and casualty companies. Often-times, when an insurance company fails, another company will take over its policies through the end of their terms. The costs of any claims and litigation filed before the takeover are paid by FIGA.

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If the Florida Office of Insurance Regulation approves the assessment later this month, it will raise $190 million to cover of any claims or litigation for Orlando-based St. Johns Insurance Co., which went into receivership late last month. With more than 204,600 policies statewide as recently as 2019, it was one of the 10 largest insurers in Florida.

Tampa-based Slide Insurance Co. has agreed to take over 147,000 of its policies at the same cost and with the same coverage through the end of those policies’ terms.

It will be the second assessment levied by FIGA in less than six months. In October, FIGA levied a .07% assessment to cover the legacy costs of failed insurers Gulfstream Insurance and American Capital Assurance Corp. Insurers were authorized to collect those assessments for policies newly written or renewed in 2022, according to the Sun Sentinel.