68K Florida home insurance policies canceled

More than 68,000 policies of troubled Sunrise, Fla.based FedNat Insurance Co. and its sister companies Maison and Monarch National will be canceled by the end of June, according to terms of a consent order filed by the Florida Office of Insurance Regulation.

The order follows the downgrade of FedNat’s financial stability rating by ratings firm Demotech a month ago. The cancellations, meant to help FedNat’s parent company, FedNat Holding Company, survive after reporting $103.1 million in reported losses in 2021, will force the displaced policyholders to scramble to secure coverage just as hurricane season begins.

They’ll have to shop for insurance in an unprofitable market that has forced privately owned companies to cancel or non-renew highrisk policies and raise rates for remaining customers. Numerous companies have stopped writing new policies in Florida, sending hundreds of thousands to state-owned Citizens Property Insurance Corp., the so-called insurer of last resort.

Under the plan, FedNat will cancel 56,500 personal residential policies while Monarch will cancel 8,400 policies and Maison will shed 3,300 policies. The 68,200 policyholders will be given 45 days’ notice of the cancellations.

FedNat will transfer the remaining 83,000 of its policies to Monarch. Affected policyholders will include owners of single-family homes, condo owners and renters.