Recently when my mother received a ridiculous rate increase from her homeowner insurance company, I began researching a new policy for her. Having the knowledge about policies and coverage that I do, I was very specific with her insurance agent on what insurance companies and the types of policies to stay clear from.
When he was providing me a quote from a company I was not familiar with, he stated there were not many options. I was really taken aback by his comment as my mother only had one claim in the 15 years she has owned the home. Upon further research, it turns out the company he provided the quote from is a surplus lines carrier and not an admitted carrier.
What does this mean to you? If you are insured by a surplus line carrier, they do not have the protection of the Florida Insurance Guaranty Act if they were to go insolvent. Also, their policy rates and forms are not approved by any Florida regulatory agency. So, if you have have an insurance claim and you have any issues or complaints with them, you are at the mercy of the insurance company with no back up or help from the State.
When I pushed further for him to find coverage with an admitted carrier, not only did he come up with a quote from a known admitted carrier, but it was a better quote for less money! At that moment, it became very clear that my mother’s insurance agent was not looking out for what was best for her, but instead his own pocket.
There are many insurance agents that protect their client’s interests, but as I stated in my blog last week (The Never Ending Erosion of Coverage – Do You Know What You Are Covered For?) it is important to know what you are and are not insured for in your homeowners or business policy. This is another great example of why it is important to know who insures your property.