17 Florida homeowner insurance companies may lose their A-rating, according to the state.
The reason for that is the state and the company that rates insurance companies are at odds.
WINK News tells how you’ll get caught in the middle if you have a mortgage.
If you have a mortgage, your insurer has to be A-rated.
If the rating drops your mortgage company will make you find new insurance and right now that’s not easy to find.
Demotech rates insurers so you know if they are financially stable to pay out claims. It’s also the only rating agency allowed in Florida.
The state said Demotech’s rating methodology isn’t consistent and blamed the company for helping the crisis get worse.
Mark Friedlander with the Insurance Information Institute said Demotech isn’t the problem.
The state waited too late to try and fix its property insurance issues brought on by rampant fraud and lawsuits.
“Look at the root of the problem. Why didn’t the legislature take strong enough actions to stop this crisis from happening? We knew it couldn’t happen overnight. We understand that. But the market would have reacted much better if steps were taken, that would begin to stabilize the market,” Friedlander said.
WINK News reached out to Demotech and the company’s CEO said he would get back to us next week.
We also reached out to the Florida Office of Insurance Regulation and the Chief Financial Officer but have not heard back yet.