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Florida-based HomeWise Policies Purchased by Homeowners Choice Corp.

Florida-based HomeWise Policies Purchased by Homeowners Choice Corp.

Friday’s Post 12/2/11 -    Homeowners Choice Property and Casualty Insurance Co. announced that it has purchased HomeWise Insurance Co.’s entire Homeowners Insurance book of business in the state of Florida. The deal, which was approved byFlorida state regulators, transfers 70,000 homeowner policies to Homeowners Choice Insurance Company. Forty percent of the policies are in Palm Beach, Miami-Dade, and Broward counties. Furthermore, Homeowners Choice will be given $53 million in unearned premiums. Unearned premiums are those homeowners insurance payments which have been made to the insurance company; but the policies have not matured.  This deal has made HomeWise Choice twice as large as it already were, according to its CEO, Paresh Patel. Patel adds that the company would be able to handle this transaction with “minimal disruption” to their operations because this isn’t the company’s first transaction. “Our financial strength enabled us to satisfy the regulators and move quickly to consummate this transaction.”  Before this transaction, the Clearwater, Florida-based Homeowners Choice already gained 59,000 policyholders in Florida, representing $130 million in annual premiums, since it was founded five years ago. Two months ago, the Tampa, Florida-based HomeWise lost its only rating when the firm Demotech withdrew its rating. Hence, HomeWise lost its license to offer homeowners insurance because Florida requires every homeowners insurer to have at least one financial rating to offer its services. During the same time, HomeWise Preferred, a company related to HomeWise, was placed into state receivership when regulator discovered that it didn’t have the capacity to pay claims while in the run-off mode. Homeowners Choice still maintains a regulatory rating giving it the ability to acquire Homewise Insurance Companies Homeowners’ Policies.

-Mike 

Michael E. Dortch
President & Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania 19446
(800) 807-0762 ext. 602