Possible Demotech downgrades spark effort to bolster Florida insurance

Florida insurance regulators are taking an “unprecedented” and “extraordinary” step to try and prevent tens of thousands of homeowners from being forced to look for new property insurance coverage if rating agency Demotech follows through on plans to downgrade many Florida carriers.

The Florida Office of Insurance Regulation announced a plan Wednesday to provide companies that are downgraded with reinsurance coverage through state-run Citizens Property Insurance.

The dramatic decision to assume financial responsibility for a raft of struggling insurers underscores the dire circumstances Florida is facing as a large portion of its homeowners insurance market teeters on the brink of collapse.

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