As Florida rates rise, a new property insurer emerges

Hurricane Ian couldn’t stop Florida from having a strong month of revenues.

Florida’s downtrodden property insurance market is getting some good news as state regulators approved a new carrier, Tailrow Insurance Company, to do business in the state.

Tailrow is owned by HCI Group, the parent company of Homeowners Choice. HCI will hold all 2.5 million shares of common stock, valued at $1 per share, according to a consent order filed by the Office of Insurance Regulation (OIR).

Since the start of 2022, the Sunshine State has seen seven insurers go under. The devastation caused by Hurricane Ian and Hurricane Nicole has prompted more skyrocketing rates and nonrenewal notices for homeowners.

Lawmakers have responded with $3 billion in taxpayer-backed reinsurance funds and and effort to sweep away state laws insurers say created incentives for trial lawyers and contractors to file frivolous lawsuits that generated billions in losses.

The aim of those measures, signed by Gov. Ron DeSantis, was to spur more activity in a market that private companies have shied away from in the face of massive losses.

Tailrow’s approval by the OIR earlier this month is the first such move since DeSantis signed HB 837, which limited attorney’s fees and made it harder to bring bad faith claims against insurers, in March. DeSantis previously signed SB 2A following a Special Session in December, which eliminated one-way attorney’s fees and the assignment of benefits in property insurance claims.

“OIR’s greatest priority is to promote a stable and competitive insurance market for consumers. Today’s announcement is great news for Florida policyholders who will benefit from having additional options when shopping for homeowners’ insurance,” Insurance Commissioner Michael Yaworsky said in a released statement.

“As we begin to see the impacts from recently passed legislation, OIR will continue to use all available resources to attract more insurance-related companies, jobs, and capital to the Florida insurance market.”

The news comes on the heels of several companies seeking large statewide average rate hikes for typical homeowners’ coverage, including one that sought a 61.5% hike. Citizens Property Insurance, the state-run company that is Florida’s largest insurer with 1.1 million policies, is asking OIR for a 14.2% statewide average rate increase.

In recent weeks lawmakers have advanced bills (SB 7052, HB 7065) aimed at imposing “accountability” on insurers by increasing fines for improperly managing claims and requiring insurers to give OIR their claims handling handbooks to ensure compliance.