According to a Tampa Bay Times report from last year, insurance company bankruptcies have cost the state of Florida over $400 million so far. And now you can add $36 million more to the mix. Sunshine State Insurance has gone belly up and left $36 million in unpaid claims, which means that the state is left to clean up the mess.
That also means that homeowners will most likely eventually have to pay up themselves as insurance bills will probably go up to cover the cost. This actually happens fairly frequently in the state of Florida. Sunshine State Insurance is the seventh smaller insurance company that is no longer in business. And it is costing the residents of Florida a lot of money. Sunshine State was one of the smaller companies that the state once recommended as an alternative to Citizens.
You could make a pretty strong argument that many of these losses could have been avoided if your leaders in Tallahassee weren't so A) reckless in shedding Citizens policies and B) lax in monitoring these pop-up companies. (Romano, 2014). Here’s the problem: these business went out of business when there were no hurricanes in Florida.
They didn’t have enough reserves to pay their claims, and this is when no major catastrophes were happening, so claims were minimal comparatively speaking. And they didn’t have the reserves because they were shifting money to the “parent” companies and then bailing before the next catastrophe (read: hurricane) hits.
The bigger problem? There are about 50 insurers in the state of Florida currently. Out of those, Weiss Ratings has deemed 40 percent of them to be in danger of closing their doors. That’s not very comforting for the residents of Florida.
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Tampa Bay Times
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