Claims from insolvent insurance companies triggers an ’emergency assessment fee’

This month, the State of Florida issued an order placing a new fee attached to residents' home insurance policies. What is being called an "emergency assessment," will help the state pay off claims of insolvent companies.

According to the FIGA Board of Directors, the action is necessary to secure funds for the payment of covered claims relating to the liquidation of United Property & Casualty Insurance Company.

The Office of Insurance Regulation (OIR) will levy a 1 percent emergency assessment on all covered lines of business. Member insurers will collect, then remit, assessments to FIGA on a quarterly basis and FIGA members will be able to recoup the 1 percent emergency assessment from their policyholders over the Assessment Year starting October 1, 2023 through September 30, 2024 and continuing until further notice.

If a homeowner's insurance policy is $5,000 a year, a 1% assessment would cost an extra $50 a year. The fee comes as many insurance industry experts say that more rate hikes are expected in June.

The emergency assessment does not apply to vehicle insurance policies.

To read the OIR's Order to levy 2023 FIGA Emergency Assessment, click here.