Southern Fidelity Replacement Policy

Was your insurance policy with Southern Fidelity, Lighthouse, Avatar Property & Casualty, or St. Johns recently canceled?

Floridian homeowners are in a state of crisis. Home insurance costs are skyrocketing and availability is plummeting. In 2021, some homeowners saw a renewal increase of 50% or more. Now, homeowners are facing an even bigger crisis: non-renewed or canceled homeowners’ policies. Property owners of single-family homes, condos and renters will soon be looking for homeowners’ insurance as more insurance carriers leave the state.

According to a  South Florida Sun Sentinel report, thousands of cancelations are in progress or to come:

• Southern Fidelity will be canceling nearly 70,000 residential policies 
• FedNat Insurance Co. will be canceling over 68,000 residential policies
• Monarch will be canceling over 8,000 residential’s policies
• Maison will be canceling over 3,000 residential’s policies

If you find yourself in this situation, don’t panic – we have been in the personal insurance business for over 50 years and are readily available to ensure you have the coverage you need in a timely matter. Our Florida team of experts can quickly create a replacement policy for you and your personal lines of insurance needs.

Why was my property and casualty insurance canceled?

On June 3, 2022, Demotech withdrew its financial stability rating assigned to the Southern Fidelity Insurance company after failing to secure reinsurance for the 2022 hurricane season. Shortly thereafter, Southern Fidelity entered into receivership and is to be liquidated. It is the fourth insurer that was declared insolvent since February, leaving thousands of previously insured customers without a policy.

How does this impact homeowners?

This situation puts homeowners in a tough position. Not only will it be harder to find homeowners insurance – it will cost more. To layer on the challenges, some available insurers will only cover homes valued up to $700,000 and replacement costs have gone up 16%. If your home has appreciated in value, even if you have coverage, it’s time to relook at your policies to ensure you have the right level of coverage for your property.

For those trying to purchase a property, this could make the closing process even more complicated.

What is a receivership?

A receivership is a process that is put in place to protect a company. A period of receivership may be thought of as a means of protecting a company in financial trouble. During this time, A “receiver,” or trustee, steps in to manage the entire company, its assets, and all financial and operating decisions.