Florida homeowners insurance policyholders being forced to make upgrades

Homeowners in Florida are doing everything they can to keep their home insurance policies.

In the last year, five insurance companies have left Florida, leaving thousands looking for coverage. The state is watching 27 more companie to see if they will be able to provide if a disaster hits.

“Because so many companies are in this precarious financial position, they are being much more careful about the risk they write,” said Mark Friedlander of the Insurance Information Institute in Florida. “As a result, they are taking a closer look at homes in their portfolio.”

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Some providers, like Frontline Insurance, have sent letters to homeowners requiring upgrades to home mechanics.

One NBC2 viewer shared their letter from Frontline requiring a new water heater be installed, or risk their policy being dropped.

“The thought of them dictating to me what I have to do in order to maintain my policy became disturbing and really made me think about where this can go,” said the homeowner, who did not want to be named for fear their coverage would be canceled.

The Gateway homeowner told NBC2 that he had recently replaced his 16-year-old water heater.

“I’ve had homeowners policies for the last 35 years, and I’ve never had a company essentially demand that I have to replace my hot water heater,” he said.

His biggest concern is if an insurance company could require a replacement like a water heater, what is stopping them from forcing bigger upgrades?

“I think that is what we are seeing now is certainly the Fort Myers area and many other parts of the state,” said Friedlander.

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Friedlander explained that between insurance companies failing in Florida and recently passed state legislation, insurance companies are holding more policies, enabling them to be picky.

“As Florida’s home insurance market remains unstable, we expect insurers to increase their scrutiny of properties when it comes to underwriting risk,” Friedlander explained.

The Florida Office of Insurance Regulation told NBC2 that insurance companies are allowed to require the upgrades of homeowners to keep risk lower.

The agency issued a statement saying:

Insurers can evaluate the age of water heaters and other characteristics of a home to require updates.”

Underwriting guidelines vary between insurers, but underwriting guidelines are typically used when an insurer is determining whether or not to offer a renewal policy. The insurer may consider the age of the home, roof, plumbing, electrical wiring, or the heat and air. If an insurer refuses to insure an applicant or if it decides to non-renew or cancel an existing homeowners policy, it must provide advance notice to the insured and provide the specific reason for their decision. However, there are some non-renewal limitations outlined in Florida Statues. A list of non-renewal limitations and additional information regarding non-renewal limitations is available on DFS’s Homeowners Insurance Overview page here.

Friedlander said homeowners need to be prepared for this to happen more frequently in the future.

“Homeowners should be prepared that their insurance company will take a closer look at their property than they may have ever done… than they ever have in the past,” he said.

“I just see that as very disturbing, Anti-American. Any number of things when insurers have that kind of power and authority” said the Gateway homeowner.

NBC2 reached out to Frontline Insurance for comment but did not get a reply by the time this article was posted.

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