Can smaller insurers tackle big storms? Florida says yes

About 100,000 Florida homeowners are facing the 2008 hurricane season with a different insurer. Many were dropped by larger companies and now have policies with smaller, newer insurance companies with unfamiliar names. But the state insurance-regulation office insists it has imposed such stringent requirements that policyholders are not at a disadvantage if one of the smaller insurance companies holds the policies. Regulators say, in fact, that there’s not much difference between being insured by a large company or a small one. Since 2006, 27 new companies have met the requirements to be licensed in the state, including six since Jan. 1, while an additional 13 either added or were eligible to add property-and-casualty or surplus-lines coverage. The new companies represent nearly $5.3 billion in new capital in the state, according to Office of Insurance Regulation figures. Agents also say new companies’ robust bank accounts are one of the main reasons policyholders shouldn’t worry too much when hurricane season begins June 1.

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