TAMPA, Fla. (WFLA) — For the first time, Governor Ron DeSantis talked about a problem that 8 On Your Side has been warning homeowners about — a possible downgrade for dozens of insurance companies that could put your coverage in jeopardy.
On Wednesday, Gov. DeSantis told Investigator Mahsa Saeidi there are two positive developments.
Saeidi asked Gov. DeSantis about the apparent discrepancy at a press conference in Tampa, during which DeSantis discussed so-called “woke CEO’s”. He said they are using corporations to take away Floridians’ rights.
However, 8 On Your Side wanted to talk to the governor about a huge threat to homeowners: The financial stability of Florida’s insurance companies.
“Are the vast majority of property insurance companies in Florida in financial trouble?” Saeidi said.
“I think you saw the letter he sent to the rating, and if you look 6 months ago to now, those companies by and large are in better shape than they were six months ago, largely because we enacted reforms,” DeSantis said. “They were arguing against the downgrade that has now been punted.”
When the news broke that the ratings agency, Demotech, wanted to downgrade more than 20 property insurance companies, the backlash was swift. Florida’s governor, chief financial officer and insurance commissioner all questioned the credibility and consistency of Demotech’s standards.
State officials argued the insurers should not lose their A-rating because they are financially stable.
Under pressure, Demotech’s president Joe Petrelli delayed downgrades “until further notice”, but the question from homeowners is, are insurance companies in financial trouble? A state report released this month seemed to say “maybe”.
Florida’s Insurance Commissioner, David Altmaier, put 27 insurers on a watch list. Altmaier said the companies are planning to “non-renew more than 10,000 … policies,” or they are “requesting a rate increase that exceeds 15 percent”.
If the downgrades happen, people with a mortgage would have to find new coverage. Gov. DeSantis announced a solution that would allow homeowners to keep their policy, for now.
“We can use Citizens Insurance as kind of the reinsurer of last resort,” DeSantis said, referring to a program state regulators created with Citizens Property Insurance, providing reinsurance to troubled companies.
The takeaway from the governor’s comments is that hundreds of thousands of Floridians won’t be left scrambling to find new coverage this hurricane season. State regulators said this is a temporary fix just for this hurricane season.
What happens next? Industry experts believe the state is working to get mortgage companies to accept downgraded companies.