NU Online News Service, June 28, 3:45 p.m. EDT
Florida residents have more carriers to choose from when shopping for homeowners insurance compared to other hurricane-prone states, but the financial strength of new entrants there is "questionable," according to Weiss Ratings.
Weiss reviewed homeowners insurance carriers in Texas, South Carolina, Louisiana, North Carolina and Florida and found that homeowners in most of those states have few choices when it comes to purchasing coverage. Weiss said just eight property and casualty insurers in each state besides Florida control anywhere from 58.5 percent to 77.2 percent of the market share.
But in Florida, Weiss said residents have more carriers to choose from, with eight companies controlling just 38.4 percent of the market share, Weiss said.
"But while the risk has now been spread among more players, the financial strength of the new entrants is questionable," said Melissa Gannon, vice president of Weiss Ratings.
For example, Florida insurers Royal Palm Insurance Company and Edison Insurance Company, which opened for business in 2006, are both rated E-plus, or very weak, according to Weiss.
Weiss said that, in Texas, eight carriers controlled 77.2 percent of the homeowners' insurance market at the end of 2009. In South Carolina, eight carriers held 68.2 percent of the market; in Louisiana, 63.3 percent; and in North Carolina, 61.1 percent.
In 2002, the figures were 78.3 percent for Texas, 66 percent for South Carolina, 62 percent for Louisiana, and 58.5 percent for North Carolina.
Weiss noted that the five strongest U.S. property and casualty insurers with $10 billion or more in assets are State Farm Mutual Automobile Insurance, Allstate Insurance, Federal Insurance, Hartford Fire Insurance and Travelers Indemnity.
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