Evolve Insurance Agency has learned that Demotech, Inc., a well-known financial rating company, has withdrew their ratings of yet another homeowners insurance company in Florida. Lighthouse Insurance Company had their Demotech-issued financial rating withdrawn on Tuesday, March 29th, 2022.
RELATED: Insurtech Slide Insurance Company picking up policies from insolvent St. Johns
Demotech, Inc. is a well-known company in the financial industry who is responsible for reviewing the accounting records, underwriting principles, and overall profitability trajectory of insurance companies to determine if they meet the standards needed to qualify for a ‘rating’ by their executive team. This rating, which is usually given as a letter followed by an adjective (i.e. “A, Exceptional”), is used to describe the company in a favorable or unfavorable way, and is viewed by many as a sign the insurance company is financially solvent and has a path towards continued growth and profitability. Some institutions, like mortgage brokers and lenders, use this rating to determine if the company meets the underwriting criteria to be a qualified insurer of a borrower’s home. When an insurance company is downgraded, or even worse has their rating withdrawn entirely, it can be a sign of a company in financial distress – and potentially a sign that their ability to remain solvent is questionable. In extreme circumstances, having a rating withdrawn can also mean that the insurance carriers insurance policies are no longer acceptable to mortgage brokers, lenders, and other underwriters when it comes to a borrower maintaining insurance coverage on their home.
RELATED: Florida homeowners insurance crisis may not be addressed until November, DeSantis says
This news comes only weeks after 2 other Florida based homeowners insurance companies had their ratings withdrawn by Demotech. St. Johns Insurance Company and Avatar Property and Casualty Insurance Company both lost their Demotech rating in February, only later to be declared insolvent, and finally ordered to be liquidated by the Florida Department of Financial Services by the middle of March. Lighthouse Insurance Company may very well end up facing the same fate.
Given the current market conditions, this news comes as no surprise to Evolve Insurance Agency who’s ready to take action to keep you and your assets covered. If you are insured with either of these two insurance companies, or are experiencing other insurance related issues, the time to act is RIGHT NOW. Don’t wait until it’s too late - request a quote today by visiting our quote request page in the upper right-hand corner of this page or give our office a call at 941-244-2760. We’ll go to work right away on getting your coverage secured with a reputable insurer.
David Kronk Jr.,
Owner, Evolve Insurance Agency