Insurers protecting Florida’s homeowners are going under. And it’s not the state’s infamous storms dragging the firms down — it’s a deluge of lawsuits and fraud, Bloomberg News reported. More companies may follow the two insurers declared insolvent in recent weeks, Tampa, Florida-based Avatar Property & Casualty Insurance Co. and St. Johns Insurance Co., based in Orlando, Florida. And lawmakers failed to pass a bill that could offer a potential remedy before the state’s legislative session wrapped up earlier this month. Insurers, meanwhile, are opting not to renew certain policies, refraining from writing new business and increasing premiums. The pullback offers homeowners few choices: pay up, take the risk of forgoing coverage or throw in their lot with the state’s insurer of last resort, which is already facing an influx of new customers as hurricane season looms. “There are going to be other insolvencies,” said Bruce Lucas, chief executive officer of Tampa-based insurance-technology firm Slide Insurance Holdings Inc. and a veteran of the state’s underwriting industry. “There are just other companies that are too thinly capitalized.” The largest U.S. insurers have spent years shrinking their footprint in Florida to reduce their exposure to violent Atlantic hurricanes. As of the third quarter of last year, companies that primarily write policies in the state control more than three-quarters of the homeowners’ insurance market, according to Kyle Ulrich, president of the Florida Association of Insurance Agents.
