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While less than 1% of cases end up in trial, the percentage of insurance claims that went into litigation rose 47% over a four-year period.

The ratings issue has come at a turbulent time in Florida's property-insurance market, as carriers have shed policies and sought large rate increases because of financial losses.

"If there's a direct-hit Category 5 storm that hits Miami, you're going to see 20 insurance companies go bankrupt and are not going to be able to pay claims. It's become a big problem," said South Florida insurance broker Joseph Gendelman.

The company received notice from Demotech of its intention to withdraw the insurer's financial stability rating.

The filing listed a series of issues, including saying that the insurer's "assets if made immediately available are insufficient to pay all of its liabilities."

United Property & Casualty Insurance Co. was one of three insurers downgraded by the Demotech ratings agency amid widespread financial troubles in the state's property-insurance market.

The move will give insurers facing rating downgrades the ability to meet exceptions offered by federal lenders.