Your Florida Property Insurer Went Insolvent: FIGA Limits, Surplus Lines Gaps, and Your Broker

The Letter No Florida Policyholder Wants

Over the past several years a string of Florida property insurers has been declared insolvent and placed in receivership, throwing hundreds of thousands of policies onto the Florida Insurance Guaranty Association (FIGA). FIGA has paid out billions — but a FIGA claim is not the claim you bought. Caps, deductibles, and exclusions apply, claims move slowly through the receivership process, and one entire category of policyholder gets nothing at all: surplus lines insureds.

What FIGA Actually Covers

• FIGA steps into covered claims of authorized Florida insurers that are declared insolvent, subject to statutory caps under chapter 631, Florida Statutes — including a general per-claim cap and a higher special cap for homeowner damage claims, each with its own deductible mechanics.
• Amounts above the caps become claims against the receivership estate — often paid at pennies on the dollar, years later.
• Surplus lines carriers are not FIGA members. If your policy was placed in the surplus lines market and the carrier fails, there is no guaranty fund behind it. Florida law requires that surplus lines policies carry a conspicuous disclosure of exactly this fact.

The Question Nobody Asks: Who Put You There?

Policyholders treat insolvency like weather — bad luck, nobody's fault. Sometimes that is true. But placement decisions are choices made by your agent or broker, and Florida law attaches duties to those choices:

• Surplus lines without disclosure. If you were moved to a surplus lines carrier without the required disclosures — or without being told you were giving up guaranty-fund protection — the broker may bear responsibility for the difference between what you recovered and what an authorized placement would have paid.
• Placement with visibly distressed carriers. Brokers who kept steering renewals to carriers with public ratings downgrades, regulatory consent orders, or well-known financial distress face negligence claims measured by the shortfall.
• Exclusion-riddled replacements. Post-insolvency, many Floridians were rewritten into policies with roof payment schedules, water sublimits, and cosmetic-damage exclusions that were never explained. The next denial often traces to that unexplained downgrade — a classic negligent procurement fact pattern.

A Practical Roadmap for Shortfall Victims

• File your FIGA claim and receivership proof of claim on time — deadlines in liquidation orders are strict.
• Quantify the gap: what the policy promised, what FIGA paid, what remains unpaid.
• Pull your placement history: who chose this carrier, what alternatives were quoted, what disclosures you signed. Request your file from the agency in writing.
• Have counsel review whether the shortfall is recoverable from the broker, the surplus lines agent, or others in the placement chain.

If an insurer failure left you underpaid — or a surplus lines placement left you with nothing — a free case evaluation can determine whether your broker owes you the difference.