What Happens if My Home Insurance Company Goes Bankrupt?
In January of 2026, Law 360 reported on an interesting case involving a Florida property insurance appeal. This appeal revolved around wind damage and an insurer that ultimately went insolvent, and it raises an important question: What happens if your insurance company goes bankrupt? How do you cover the repairs to your property after a storm or flood?
How Likely Is a Florida Property Insurance Company to Go Bankrupt?
If you’re new to Florida or homeownership in general, you might assume that this is an unlikely scenario. After all, property insurance companies are supposed to be stable, reliable, and flush with cash… right?
The reality is that home insurance companies have a long track record of becoming insolvent in Florida. As Claims Journal notes, a staggering seven property insurance companies went bankrupt between 2021 and 2022. These numbers only accelerated since 2022, with dozens of other companies going under.
The arrival of a major storm does not necessarily mean immediate bankruptcy for these companies. Instead, many insurers suffer a slow death, only going bankrupt years after suffering untenable losses and processing (or failing to process) many claims.
In other words, unless you’re with the insurer of last resort (which is backed by the state), there’s always a possibility that your home insurer could go bankrupt. This means you need to be prepared for what might happen if your insurer goes under.
Understanding the Florida Insurance Guaranty Association
If your insurer goes bankrupt and you need to file a claim, you will likely turn to something called the Florida Insurance Guaranty Association (FIGA). Created decades ago by the Florida government, this organization serves as a financial safeguard against insurance insolvency. If your insurer goes bankrupt, FIGA should cover your losses.
If you find yourself in this situation, you’ll need to submit a “Proof of Loss” form to the Department of Financial Services. Next, you’ll need to communicate with FIGA to determine your coverage. FIGA only covers a maximum of a few hundred thousand dollars, so it may be enough if your losses are worth millions.
In this situation, it makes sense to contact a property insurance lawyer to assess your full range of options. It may be possible to pursue additional compensation beyond the limit covered by FIGA. If your losses are below the FIGA limit, you should be able to cover your repairs and damages.
Contact Our Fort Lauderdale Property Insurance Lawyers Today
At Fuxa & Tyler, our legal team is made up of a diverse combination of attorneys who are well-positioned to protect the legal rights and financial interests of policyholders. If your property insurance claim was denied, we can help. For a free consultation, please call us today at (954) 990-5251. With an office in Sunrise, we represent policyholders in Broward County and throughout the state of Florida.
Sources:
law360.com/mealeys/mealeys-insurance-insolvency/articles/2434679/panel-affirms-ruling-denying-motion-to-enforce-settlement-in-wind-damage-dispute
claimsjournal.com/news/national/2024/04/24/323210.htm
myfloridacfo.com/division/receiver/guide-to-the-receivership-process/floridainsuranceguarantyassociations