Losing your coverage? Here's what to do about it

Fri May 15 2020

A mobile home on a lake

Capitol Preferred Insurance, a Florida-based insurer, will cancel 23,800 policies because of its precarious financial condition. Florida insurance regulators found the company lost $48.6 million between 2017 and 2019, losses they called “unsustainable.”

The Florida Office of Insurance Regulation approved the move to cancel these policies in order to protect homeowners.

The news comes days before the start of the Atlantic hurricane season on June 1, and may be a shock to many homeowners.

What to do If your policy is being cancelled

If your homeowners insurance in Florida is getting cancelled, we suggest two things:

  1. Don’t panic (you’re gonna be ok!)
  2. Get a new policy immediately (we can help with that!)

We can help you get a new policy – and save money in the process.

We’re standing by to quote your home or condo.
Call us at 855-664-4800, or get a quote online today.

Find out if you’re one of the impacted policyholders

All of the 23,800 cancelled policies are underwritten by Capitol Preferred. Of those the affected policies:

  • Around 19,000 are homeowner (HO3) policies
  • Around 4,500 are condo unit (HO6) policies

If your policy is one of them, you will soon receive a cancellation notice 45 days before the cancellation date.

Many of these cancelled policies were recently subjected to a 33.5 percent rate increase.

Get covered before hurricane season

It’s important that every affected homeowner gets a new policy in place before June 1, 2020, the start of hurricane season. You don’t want your home left to chance when a major storm strikes.

Time is of the essence here because when storms approach the Florida coast, many insurance companies (Kin included) will put a moratorium on selling policies until it passes.

If you wait too long to get a new policy and a moratorium goes into effect, you risk having a lapse in coverage, which can leave you exposed to losses and increase your rates.

Find a financially strong insurance company

Getting a policy cancelled can be stressful. And while all the factors that go into a mass cancellation are hard to predict, there are a few ways homeowners can make informed choices when shopping for a new provider.

Here are some ways you can make sure your home is insured by a company you can trust.

1. Learn about the company’s financial ratings

We know that an insurance company’s ability to pay claims is incredibly important, especially when you live in Florida and are subject to hurricanes, floods, and the whims of Mother Nature.

A insurer’s financial strength rating demonstrates its financial outlook and its ability to pay for claims after a widespread disaster. Of the independent rating companies that assess an insurance company’s financial strength, the most popular ratings are issued by:

  • A.M. Best
  • Demotech, Inc.

It’s good practice to only buy coverage from an insurance carrier with a solid financial rating. For reference, our financial stability rating is A, Exceptional, from Demotech.

Capitol Preferred Insurance, and some other Florida carriers, have faced pressure to maintain their financial stability ratings. Though Demotech Inc. affirmed Capitol Preferred's A rating earlier this year, it’s unclear how recent events will impact that rating in the future.

2. Look for a company that’s transparent about its financial health

Unfortunately, insurance isn’t really known for its openness and accessibility. Most homeowners aren’t even sure what their policy covers.

We don’t think it should work that way. Though the industry is complex and bound by laws and regulations, we believe you should know exactly who you’re trusting with your home. That’s why we keep our customers updated on our financial health.

We’re proud to have built a reliable insurance company, and we want you to know we’re looking out for you.

3. Learn (Just a little) about reinsurance

We don’t expect you to be insurance nerds like us. But if an insurance company has a strong reinsurance program, it means your insurance has insurance.

Put another way, no matter the catastrophe or amount of claims, a solid reinsurance program is further proof that a company can pay your claims.

For example, Kin is backed by A-rated and fully collateralized reinsurers. That means we have additional capital to draw from if we ever need to. Our reinsurance program is so stable that, statistically speaking, we would only ever expect to see an event exceed our program once in every 135 years. If that did happen, we still have millions in our own reserve to pay claims.

4. Read the customer reviews

No one wants to trust their home to an insurance company that treats them like a line item. One way to make sure you’re choosing an insurer worthy of your trust?

Read their customer reviews. They’re telling.

They can offer insight into how much money customers saved, how fast they got insured, and how well the company handled claims.

We’re proud to say our customers are incredibly satisfied with our service and how much we’ve helped them save over the years.

Experience it for yourself. Call us at 855-664-4800 or get a quote online to shore up your coverage before hurricane season starts.


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