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Hurricane Ian could worsen ongoing homeowners insurance crisis
10 insurance companies have recently failed, including one covering Texas homeowners.
HOUSTON - Hurricane Ian could further devastate the home property insurance industry. In fact, 10 insurance companies have recently failed, including one covering Texas homeowners.
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Devastating hurricanes and storms in recent years in Florida, Louisiana, and Texas have led to hundreds of thousands of property claims, wiping out some insurance companies.
PREVIOUS: How to prepare for a storm, and file insurance claims for damage
30,000 homeowners, mostly along the Gulf coast south of Houston, were suddenly left without insurance September 7th.
In August, a Florida court put their carrier, Weston Property and Casualty Insurance Company, into liquidation.
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Hurricane Ian seen slamming through Sanibel Island
A time-lapsed view of Hurricane Ian making its way through Florida's Sanibel Island (Video courtesy of Storyful)
They're not alone; nine other insurers covering homes in Louisiana and Florida have either failed or are in liquidation, after a string of serious storms led to hundreds of thousands of claims. Add to that inflation and supply shortages that are driving up repair costs.
"Insurance companies need to have a certain amount of money in reserve to be able to pay claims. So Florida, in particular, has been looking at these companies, saying if we were to have a big disaster, these companies wouldn’t have enough money to cover it," explained Richard Johnson with the Insurance Council of Texas.
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The Texas Windstorm Insurance Association has offered the Weston policyholders coverage.
"You would transfer your policy from that company to TWIA, which will cover you, so you don’t go out without insurance," said Johnson.
MORE: Hurricane Ian makes Florida landfall as 'extremely dangerous' Category 4 storm | How you can help victims impacted by Ian and avoid scams
The Insurance Council of Texas says policyholders who prepaid premiums to an insurer that fails may be able to get a refund.
"You can reach out to the Texas Property and Casualty Insurance Guarantee Association. They have a fund set up by the legislature for situations like these," said Johnson.
The situation has left many homeowners scrambling to find coverage, and often paying higher premiums.
So how do you know if an insurance company is financially strong?
One way is to check with AM Best, a credit rating agency for insurance companies. It says that a company with a B+ or higher has a good ability to meet obligations.