Company to downgrade 10-15 Florida insurers because of AOB claims losses
An Ohio insurance-rating company has warned that recent court rulings and skyrocketing losses from water-damage claims have created an “uncertain operating environment” for Florida’s property insurers and that it will downgrade the financial stability of 10 to 15 Florida-based companies, potentially threatening the solvency of thousands of homeowners policies.
Demotech, Inc., a company which rates the financial strength of 400 companies nationwide including 57 in Florida, said Tuesday that the company is likely to reduce the financial stability rating of the Florida-based companies from A to B, below the level needed for federally backed mortgages, beginning in March.
The decision could put the mortgages of thousands of homeowners in jeopardy because mortgages backed by Fannie Mae and Freddie Mac require property insurance to be A-rated or the policies could be in default. Story here.