Home insurance companies are requiring homeowners to make upgrades or risk getting dropped


Homeowners in Florida are doing everything they can to keep their home insurance policies.

In the last year, five insurance companies have left Florida leaving thousands looking for coverage, and the state is watching 27 more companies will be able to provide if a disaster hits.

“So because so many companities are in this precarious financial position they are being much more careful about the risk they write,” said Mark Friedlander with the Insurance Informtaion Institute in Florida. “And as a result they are. taking a closer look at homes in their portfolio.”

Some providers, like Frontline Insurance, have sent letters to homeowners requiring upgrades to home mechanics.

One NBC 2 viewer shared their letter from Frontline requiring a new water heater be installed or risk their policy dropped.

“The thought of them dictating to me what i have to do in order to maintain my policy, became disturbing and really made me think about where this can go,” said the homeowner who did not want to be named for fear their coverage would be canceled.

The Gateway homeowner told NBC 2 that he had already recently replaced his 16-year-old water heater.

“I’ve had homeowners policies for the last 35 years and I’ve never had a company essentially demand that I have to replace my hot water heater,” he said.

His biggest concern is if an insurance company could require a replacement like a water heater, what is stopping them from forcing bigger upgrades.

“I think that is what we are seeing now in certainly the fort myers area and many other parts of the state,” said Friedlander.

Friedlander explained that between insurance companies failing in Florida and recently passed state legislation, insurance companies are holding onto more policies, forcing them to knit-pick.

“As Florida’s home insurance market remains unstable we expect insurers to increase their scrutiny of properties when it comes to underwriting risk,” Friedlander explained.

The Florida office of Insurance Regulation told NBC 2 that insurance companies are allowed to require the upgrades of homeowners to keep risk lower.

Continuing in a statement:

“Insurers can evaluate the age of water heaters and other characteristics of a home to require updates.”

Underwriting guidelines vary between insurers, but underwriting guidelines are typically what is used when an insurer is determining whether or not to offer a renewal policy.

The insurer may consider the age of the home, roof, plumbing, electrical wiring or the heat and air. If an insurer refuses to insure an applicant or if it decides to non-renew or cancel an existing homeowners policy, it must provide advance notice to the insured and provide the specific reason for their decision.

However, there are some non-renewal limitations outlined in Florida Statues.

A list of non-renewal limitations and additional information regarding non-renewal limitations is available on DFS’s Homeowners Insurance Overview page here.

Friedlander said homeowners need to be prepared for this to happen more frequently in the future.

“So homeowners should be prepared that their insurance comapny will take a closer look at their property than they may have every done so than they ever have in the past,” he said.

“I just see that as very disturbing, Anti-American. Any number of things when insurers have that kind of power and authority,” said the Gateway homeowner.

NBC 2 reached out to Frontline Insurance for comment but did not get a reply by the time this article was posted.

Tags: Florida home insurancehomeowners


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