Homewise Insurance company, based out of Tampa, lost its financial health rating last week. Demotech, the only rating agency that rated the company, dropped the rating last Thursday. Most homeowners here in Florida are required to have property insurance from a rated company. The banks that carry the mortgage want to ensure the financial strength of any insurer who covers the home. This means that most all Homewise insureds will be required to find new insurance immediately or some lenders could “force-place” coverage. Force placed coverage is when your lender finds coverage for you and then send you the bill, which typically costs a lot more than standard policies. Rules vary from lender to lender, but most banks will give customers time to find a new insurer, said Anthony DiMarco, an executive vice president for the Florida Bankers Association. Homewise Insurance currently has more than 75,000 policies in the state. Demotech President Joseph Petrelli said some parts of HomeWise’s financial results “are stable” but it didn’t meet the financial benchmarks that it set for itself as of the end of June. “Even though their most recent financial statement looks good, they no longer meet each and every of our numerous requirements necessary to earn” a rating of “A” or better, Petrelli wrote.
The rumor has been floating around for a long time that Homewise Preferred Insurance was taking on water quickly and most thought the company would not make it past June. I guess not paying insurance claims helped the company stay alive for several more months but the latest rumbling is that Homewise has already declared bankruptcy just this week and that it has simply not gone public yet. Still, in the legal world, Homewise continues to fight tooth and nail against every claim brought by its insureds and is paying nothing. Going down swinging I guess.