Security First, Amelia Underwriters Offering New Products in Warming Florida Market

Two Florida-based insurance companies are expanding their product lines, another sign that insurers are making more – if limited – moves into a warming market in the state.

Amelia Underwriters, a wholesale and surplus lines broker based in Fernandina Beach, is now offering a broader range of lines of business through the Florida Association of Insurance Agents’ Independent Marketing Solutions. Amelia, which offers commercial property, general liability, trucking, homeowners and canine liability coverage, also recently began writing artisan contractors’ general liability in Florida through Cimarron Insurance, the company and FAIA said in recent postings.

Meanwhile, Security First Insurance Co., headquartered in Ormond Beach, announced it will offer an HO-5 turnkey program through homebuilders, to be managed by Embark MGA, a managing general agency. The product, which Embark called an “embedded” program, can be included in the final cost at closing for new-home buyers.

An HO-5 can often provide a higher limit on indemnity, more comprehensive coverage on a property and its contents, and replacement value on a home and its belongings. Such a policy often comes with higher premiums, though, explained Scott Johnson, a Florida insurance consultant and educator. But with the lower risk that comes with new homes with new roofs, the premiums on the policies could actually be 20% to 30% lower than those for a comparable HO-3 policy, said Security First President Melissa Burt DeVriese.

New homes built to new building codes make it easier to predict risk, she noted.

“New homes haven’t had any losses, and a lot of new homes have a higher replacement cost,” she said.

Security First has not put a target on the number of policies it expects to sell under the program.

“This is another way to get our policies in the hands of consumers,” she said. “This is a convenience to the consumer, but the consumer still has every option to go through an agent” and secure their own property insurance.

The carrier in October filed for approval with the Florida Office of Insurance Regulation. But when the office did not move swiftly to review, Security First withdrew the filing in mid-December. The OIR staff may be short-handed following the unexpected death of longtime actuary Robert Lee in early December, delaying rate filing reviews, DeVriese said.

The company will refile soon as a use-and-file, allowing it to take effect before regulatory approval, she said.

The October filing shows a wide range of rates for a house with a $150,000 replacement value. But DeVriese said that actual quotes on three homes give a better idea of the premiums:

• A masonry home in Winter Garden (Orange county) with a shingle roof and a coverage A of $355,000 would have an annual premium of $1,151;
• A frame home in Port St. Lucie (Saint Lucie County) with a shingle roof and coverage A of $350,000 would be about $3,868;
• A masonry home in Nokomis (Sarasota County) with a tile roof and coverage A of $350,000 would be $2,128.

A few other carriers, including American Integrity, Tower Hill Insurance, Chubb and others, have offered similar HO-5 programs in recent years. For Security First, the move can be seen as another adjustment in an evolving Florida market: The carrier announced in May that it would reduce HO-3 rates by an average of 5.2%, thanks in part to legislative reforms in 2022 that are credited with significantly reducing claims lawsuits and litigation expenses for property insurers.

In the last few years, Security First, like several Florida property insurers, has shed policies, going from about 166,000 policies in force in 2022 to about 135,000 this year, according to OIR quarterly reports. That approach could change, if only slightly, with the new HO-5 program: Despite news articles and studies suggesting that Florida’s housing market is facing major headwinds from higher costs, including insurance rates and a construction labor shortage if immigrant construction workers are deported, DeVriese said the market is still seeing plenty of new homes built, statewide. She pointed to a Florida Economic Estimating Conference in July that predicted more than 111,000 private housing starts in 2025.

That report, by the Florida Office of Economic and Demographic Research, however, suggests that the pace of home building in 2025 will be slower than this year’s pace and significantly less than the peak of 141,000 home starts in 2022. Over the next decade, home building rates will see almost no growth, the conference noted.

Security First’s HO-5 new-home program will offer “open peril” policies, with a broader range of coverage than standard HO-3 policies, including coverage of personal belongings and incidents, such as service line and equipment breakdowns, the carrier said in a statement. The policies will cover some roofs that have solar panels. Pulte Homes, a major U.S. builder, is one home-construction firm that has shown an interest in the program, DeVriese said.

Security First also plans to streamline the claims-handling process by keeping it all in-house, not with a third-party claims management firm, DeVriese said.

Embark MGA is based in Sandy Springs, Georgia. Bill Caldwell is CEO.

This article was updated Monday, Dec. 30 with new information about premiums on homes covered by the Security First HO-5 program.