Risky Business: The Dangers of Surplus Lines Insurance Coverage

A surplus lines insurer is an unauthorized insurer made eligible by the Office of Insurance Regulation (OIR) to underwrite property and casualty insurance policies. Before approval, a Surplus Lines insurer files an application with the OIR providing detailed information about the company’s organizational structure and financial background. Any person insured under a Surplus Line insurance policy foregoes the Florida Insurance Guaranty Act (FIGA) protections after a licensed insurer in the State of Florida that becomes insolvent.

The lower price often (Falsely) entices potential homeowner’s insurance buyers into believing they are getting more bang for their buck!

Though, this is not the only risk you take when engaging with a Surplus Lines insurer in the State of Florida. Surplus Line insurance companies began underwriting policies with limited to no coverage at a fraction of the price. The lower price often entices potential homeowner’s insurance buyers into believing they are getting more bang for their buck. This narrative strays far away from reality. The results are exclusions as seen here taken directly from a homeowner’s insurance policy.

Initially, a homeowner may completely glaze over the fine print but on closer inspection, the truth rears its dreadful head. To educate our readers, the most common cause of property damage in Florida is wind damage to residential and commercial properties. The wind damage creates cracks, joint fractures, and often imperceptible openings in the envelope of your home. These rather minor issues become major problems as water slowly seeps behind your walls for months and homeowners are unaware until the wall begins to bubble or stain. The clause, such as the one above, are created to limit coverage for damages that may occur from the exact scenario previously described. If your damage fails to fall within the very exact parameters of “an opening in the roof or a wall that is clearly visible and is at least four (4) square inches in area” then your claim is barred as an exclusion under your policy.

This narrative strays far away from reality.

Or worse your water damage could be completely excluded under the policy. For this reason, it is critical that you have an experienced attorney who is well versed in policy interpretations on your side.

Before you agree to sign your policy, have an attorney at Windy Law / Larry Moskowitz, PA review your policy and put your best interests first!

To learn more about what the property damage law experts at Windy Law can do for you - call 844-849-0760 or email us at info@WindyLaw.com.
All consultations are free of charge: No recovery - No fee!