Haris Ashley
St. Johns Insurance Company, one of Florida's largest property insurers, has been ordered into liquidation. The company lost its A rating, which could leave its 140,000 Florida customers in limbo, forcing them to find new coverage. The Florida Department of Financial Services has been appointed as the receiver and will take steps to liquidate the company's assets. The liquidation order means that existing claims will be covered by the Florida Insurance Guaranty Association (FIGA), and policyholders will be transitioned to Slide Insurance Company, ensuring continuous coverage.
| Characteristics | Values |
|---|---|
| St. Johns Insurance Company liquidation | Ordered by the Second Judicial Circuit Court in Leon County, Florida, on February 25, 2022 |
| Liquidation receiver | Florida Department of Financial Services |
| Florida Insurance Guaranty Association (FIGA) role | Process and pay outstanding Florida claims for property and casualty policies |
| Maximum FIGA coverage | $300,000 per claim, with an additional $200,000 available for structures and contents on homeowner's claims |
| Deadline for settling claims or filing suits against FIGA | February 25, 2024 |
| St. Johns Insurance's financial troubles | Well-known for at least a year before liquidation |
| Demotech's warning | St. Johns and five other insurers needed to improve financially to maintain their "A" rating |
| St. Johns' announcement | No longer writing homeowners' policies in Florida |
| Slide's role | Agreed to take on many St. Johns policies in Florida, providing continuous coverage from March 1, 2022 |
| St. Johns' customer base | 140,000 customers in Florida |
| Industry context | Skyrocketing rates, fraudulent claims, excessive litigation, and hurricane losses |
| St. Johns' mission | Provide access to a high-quality, financially stable insurer for agents and policyholders |
| Customer reviews | Mixed, with some praising and others criticizing claim handling and rate increases |
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What You'll Learn
St. John's Insurance Company ordered into liquidation
St. Johns Insurance Company, one of the larger property and casualty insurers based in Florida, was ordered into liquidation on February 25, 2022. The company, which was established in Florida in 2003, had been facing financial troubles for at least a year prior to its liquidation. Demotech, one of the two ratings agencies for Florida-based insurers, had warned that St. Johns needed to improve its financial stability to maintain its "A" rating. When the company lost this rating in February 2022, it sparked concerns about its future viability, as most mortgage lenders require homeowners to have insurance from a rated company.
The liquidation of St. Johns Insurance Company was ordered by the Second Judicial Circuit Court in Leon County, Florida, which appointed the Florida Department of Financial Services as the receiver for the company. The department will now take steps to liquidate the company's assets. The Florida Insurance Guaranty Association (FIGA) has been activated to help pay outstanding Florida claims for property and casualty policies, with a maximum coverage of $300,000 per claim. Additionally, an extra $200,000 is available for structures and contents on homeowners' claims.
To ensure continuous coverage for St. Johns' policyholders, the Florida Department of Financial Services has collaborated with Slide Insurance Company, a Tampa-based insurtech company. Slide has agreed to take on many of St. Johns' policies in Florida, and the transition plan ensures that there will be no gaps in coverage for policyholders. The plan, approved by the Receivership Court, stipulates that St. Johns policies will be canceled on March 1, 2022, at 12:01 a.m., and Slide will provide replacement coverage at the same time. Policyholders' coverage and premium policy will remain identical before and after the transition.
The liquidation of St. Johns Insurance Company highlights the challenges faced by Florida's insurance market, which has been described as being in a state of meltdown. Industry experts attribute this situation to various factors, including hurricane losses, fraudulent roof claims, excessive claims litigation, inflationary pressures, and higher reinsurance costs. St. Johns is the fifth Florida P/C insurer to undergo liquidation in the last three years, underscoring the precarious state of the industry.
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The Florida Insurance Guaranty Association to cover existing claims
St. Johns Insurance Company was ordered into liquidation by the Second Judicial Circuit Court in Leon County, Florida, on February 25, 2022. The Florida Insurance Guaranty Association (FIGA) has been activated to help pay outstanding Florida claims for property and casualty policies. FIGA is a nonprofit corporation created by the Florida Legislature in 1970. It is composed of all Florida-licensed direct writers of property or casualty insurance.
FIGA will process and pay covered claims, subject to a maximum cap. The maximum amount FIGA will cover is generally $300,000 per claim, with an additional $200,000 available for structures and contents on homeowners' claims. The deadline for settling a claim or filing a suit against FIGA is February 25, 2024.
The role of guaranty associations is to ease the burden on policyholders and claimants of insolvent insurers by immediately stepping in to assume responsibility for most policy claims following liquidation. They provide prompt payment of covered claims and pay the full value of covered claims up to the limits set by the policy or state law. Guaranty associations exist in Florida for various types of insurance, including property, casualty, life, health, and annuity.
The Florida Workers' Compensation Insurance Guaranty Association (FWCIGA) is another example of a guaranty association in the state. It was created to implement specific Florida Statutes and provide a mechanism for the payment of covered claims, avoiding delays and financial loss to claimants in the event of insurer insolvency.
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Slide to take on many St. John's policies
St. Johns Insurance Company, one of the larger property and casualty insurers based in Florida, has been ordered into liquidation. The company was facing financial troubles and lost its "A" rating, which could leave its 140,000 customers in the lurch. The state's Office of Insurance Regulation has been working to ensure that St. John's customers don't lose coverage.
Slide, an insurtech company based in Tampa, has agreed to take on many of St. Johns' policies in Florida. Policyholders will be transitioned to Slide, with their coverage and premium policy remaining identical before and after the transition. The Florida Department of Financial Services has motioned the court to approve a transition plan that will provide policyholders with continuous coverage. The liquidation order means that the Florida Insurance Guaranty Association (FIGA) will cover existing claims.
St. Johns Insurance customers will now have their policies transitioned to Slide Insurance Company, with the transition plan approved by the Receivership Court. St. Johns policies were cancelled on March 1, 2022, at 12:01 a.m., and Slide provided replacement coverage effective the same day and time. There will be no gaps in coverage, and policyholders' premiums will remain the same.
Any unearned premium due back from St. Johns and payable by the Florida and South Carolina guaranty associations will be sent to Slide and applied to the Slide transition policy. This means that policyholders do not need to submit Proof of Claim forms to have a timely filed unearned premium claim. The Florida Department of Financial Services is the court-appointed receiver for St. Johns Insurance Company, and all of St. John's claim files will be transferred to FIGA.
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St. John's financial troubles
St. Johns Insurance Company, one of the larger property and casualty insurers based in Florida, faced significant financial troubles in 2022. The company, established in Florida in 2003, had a history of financial instability, with ratings agency Demotech warning as early as 2021 that St. Johns needed to improve its financial position to maintain its "A" rating.
The company's financial woes came to a head in February 2022 when Demotech withdrew its "A" rating, citing a lack of adequate reserves. This decision left St. Johns' 140,000 customers in Florida at risk of losing their insurance coverage. The withdrawal of the "A" rating was a critical blow, as most mortgage lenders require homeowners to have insurance from a rated company.
Following the loss of its rating, St. Johns Insurance was ordered into liquidation by the Second Judicial Circuit Court in Leon County, Florida, on February 25, 2022. The Florida Department of Financial Services was appointed as the receiver, tasked with liquidating the company's assets. This marked the fifth time in three years that a Florida P/C insurer had undergone liquidation, underscoring the challenges facing the state's insurance market.
The liquidation process aimed to protect St. Johns' customers by ensuring a seamless transition to a new insurance provider. Slide, an insurtech company based in Tampa, agreed to take on many of St. Johns' policies, providing continuous coverage for policyholders starting on March 1, 2022. This transition plan, approved by the Receivership Court, ensured that policyholders' coverage and premium policies remained unchanged.
The financial troubles of St. Johns Insurance highlight the broader issues within Florida's property insurance market, where skyrocketing rates and a wave of insurer insolvencies have left customers scrambling for coverage. Industry experts attributed the market's woes to various factors, including hurricane losses, fraudulent claims, and excessive litigation.
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St. John's Insurance reviews
St. Johns Insurance Company, headquartered in Orlando, Florida, provides home insurance to homeowners and condominium owners in Florida and South Carolina. The company was established in 2003 and has been facing financial trouble for at least a year.
On February 25, 2022, St. Johns Insurance was ordered into liquidation by the Second Judicial Circuit Court in Leon County, Florida, due to financial instability. As a result, the Florida Insurance Guaranty Association (FIGA) was activated to assist in processing and paying outstanding Florida claims, with a maximum coverage of $300,000 per claim and an additional $200,000 for structures and contents on homeowner's claims.
St. Johns Insurance has received mixed reviews from its customers. Some policyholders have expressed dissatisfaction with the company's claims handling, reporting denied or low-balled claims and difficulty obtaining fair settlements. For instance, a customer from WalletHub complained about their experience with St. Johns Insurance, stating that despite paying premiums for six years and filing two claims, both were denied. Another reviewer shared a similar experience, mentioning that St. Johns refused to cover certain types of damage and provided a final offer that did not align with the extent of the damages.
On the other hand, some customers have praised St. Johns Insurance for their responsive customer service and their efforts to ensure policyholders understand the factors contributing to the cost of their premiums. Clearsurance, a review website, highlights St. Johns Insurance's variety of discounts, which reward policyholders for protecting their homes and adhering to modern Building Code standards.
As of May 19, 2022, St. Johns Insurance lost its "A" rating, which is crucial for homeowners as most mortgage lenders require insurance from a rated company. This development could force St. Johns' 140,000 customers in Florida to seek alternative coverage options. The Florida Office of Insurance Regulation is working to prevent customers from losing coverage, and Tampa-based insurance startup Slide has expressed interest in taking over St. Johns' policies.
While St. Johns Insurance navigates financial challenges and seeks a path forward, policyholders are advised to stay updated through official channels and explore alternative insurance options if necessary.
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Frequently asked questions
Yes, St. Johns Insurance is leaving Florida. The company lost its "A" rating, which could leave homeowners with those policies in limbo.
St. Johns Insurance is leaving Florida because of the state's worsening insurance market, which has been affected by hurricane losses, fraudulent roof claims, excessive claims litigation, and skyrocketing rates.
The liquidation order means that the Florida Insurance Guaranty Association will cover existing claims. Policyholders will be moved to Slide, an insurtech company based in Tampa, starting from March 1, 2022.
The deadline for settling a claim or filing a suit against FIGA is February 25, 2024.
