How to research a new insurance company

State Farm's announcement that they are leaving the Florida home insurance market has, understandably, generated widespread confusion among its customers. One piece of advice that's regularly given out to people shopping for new insurance is to check the rating of insurance companies with A.M. Best to determine their financial stability. But in Florida, as with many things, the rules about ratings are a bit different.

Very few national insurance carriers write homeowners insurance in Florida any longer, and those that do have formed "Florida-only" subsidiaries to transact the business. A.M. Best favor carriers who are regionally or nationally diversified, and their ratings for Florida-only carriers tend to be lower.

We recommend our customers look at the ratings of Demotech, which primarily measures a company’s ability to remain solvent and pay claims in a crisis, which is what most Floridians are concerned with.

"In 2004, four hurricanes and one tropical storm struck Florida," Demotech president Joseph Petrelli said. "There were nearly 100 newer, regional insurers and only one failed. The Florida Office of Insurance Regulation and Demotech are doing a fine job."

The best advice we can give State Farm customers is to find an independent agency, like Sun Insurance, who represents multiple home and auto carriers and can shop for coverage on their behalf. We carefully choose a product and carrier based on our customer's needs and should those needs change, we have plenty of other options to offer them. If a carrier leaves Florida, or develops financial problems, raises rates drastically, or falls down in providing good service, we can easily re-write the policy with another carrier.

It's important to check the rating of any insurance carrier you do business with but maybe even more important to find an agent you can trust.

--
Sun Insurance Services, Inc. is a family-owned and operated insurance agency located in Orlando, Florida. We write with twenty of Florida's most prestigious insurance carriers and offer our clients a broad range of choice and customization for their insurance needs. Find us on the Web at www.suninsuranceservices.com.