The letter says the carrier has been placed in receivership. It arrives with a tone of administrative calm entirely disproportionate to what it means for the person holding an open claim.
What FIGA does, and what it does not
The Florida Insurance Guaranty Association is the statutory safety net for the insolvency of authorized Florida property-and-casualty insurers. It has paid billions over the last several years, and it is a genuine protection. It is also a bounded one, and the boundaries are where policyholders get hurt.
- Statutory caps. FIGA's obligation on a covered claim is capped by statute (section 631.57, Florida Statutes, sets the framework, with a higher structure for certain condominium association claims). A loss above the cap is a loss the policyholder eats.
- Deductible. FIGA applies a deductible to covered claims that the original policy did not.
- No surplus lines. This is the one that surprises people, and it is the most consequential fact in this entire article. FIGA does not cover surplus lines policies at all. If your carrier was a surplus lines insurer — increasingly common in Florida property, and often the only option offered in a hard market — its insolvency leaves you with no guaranty-fund protection whatsoever.
- No bad faith, no extra-contractual damages. FIGA succeeds to the policy obligation, not to the failed carrier's misconduct. Claims for bad faith against the insolvent insurer generally do not survive into the guaranty association.
- Timing and process. Receivership imposes claim-filing deadlines and a stay on litigation. Missing a claim-filing deadline in the receivership court is a way to lose everything without ever being heard on the merits.
The question nobody asks
Policyholders in this situation focus, understandably, on FIGA — on what the shortfall is and whether anything can be done about it. The question they almost never ask is the one that matters most: who put me with this carrier, and what did they tell me?
Because an insurer's failure is rarely a surprise to the market. Rating downgrades, adverse reserve development, regulatory consent orders, and withdrawal from lines of business are visible to insurance professionals long before they are visible to the person paying the premium. And Florida law imposes obligations on the professional who made the placement.
- The surplus lines disclosure. Florida requires that a surplus lines insured be told, in the manner the statute prescribes, that the placement is with an unauthorized (non-admitted) insurer and that guaranty-fund protection does not apply. Where that disclosure was not given — or was buried, or was given after the insured had already bound — the insured was deprived of the one piece of information they needed to evaluate the risk they were being handed. That is a placement failure, and it is squarely a negligent procurement claim.
- Placement with a carrier known to be in distress. An agent who moved a client into a carrier the market already understood to be failing, without disclosing what the market understood, has a problem of a different order — and it is a problem the agency's errors-and-omissions carrier will have to answer.
- The coverage that was never there in the first place. Insolvency frequently exposes gaps that predate it: the flood coverage that was never bound, the ordinance-or-law limit that was never adequate, the roof payment schedule that was never explained. The insolvency did not cause those. The placement did.
A practical roadmap for the shortfall
- File in the receivership on time. Whatever else happens, do not lose the claim you have by missing a deadline in the Division of Rehabilitation and Liquidation's process.
- Present the FIGA claim completely. Documented, itemized, with the estimates and the proof of loss. FIGA pays covered claims; it does not construct them for you.
- Determine what you actually had. Pull the policy and the declarations. Was it admitted or surplus lines? A surplus lines placement will typically say so — and if it does not say so anywhere, that absence is itself the finding.
- Pull the placement file. Your application, the quotes, the agent's emails, the disclosure forms, the prior years' policies. The comparison between what you asked for and what you were given is the case.
- Quantify the gap. The difference between what the policy promised and what FIGA (or nothing, in the surplus lines case) will actually deliver is the measure of what the placement cost you — and it is the number the claim against the broker is built around.
- Watch every deadline at once. The receivership clock, the FIGA clock, and the limitations clock on the claim against the agent all run independently, and only one of them is being tracked by anyone other than you.
One further point, and it is a strategic one. Florida's 2022 reforms made suing property carriers meaningfully harder — the one-way attorney fee entitlement is gone and bad-faith presuit requirements have tightened. That change has not made policyholders whole; it has shifted where the recoverable case is. In a growing share of Florida property matters, the claim against the broker is the better claim, and it is the one nobody is looking at.
Talk to Yates Anderson
Placement cases turn on documents that are easy to lose and deadlines that are easy to miss. If you are holding a denial letter, an insolvency notice, or a certificate that turned out to be worthless, request a case evaluation and a Yates Anderson attorney will respond within one business day.
Frequently asked questions
What does FIGA actually pay when a Florida insurer becomes insolvent?
FIGA responds to covered claims of authorized Florida property-and-casualty insurers that are declared insolvent, subject to the statutory caps and deductible in the guaranty-association framework at section 631.57, Florida Statutes, with a distinct structure for certain condominium association claims. It does not pay bad-faith or extra-contractual damages, and it does not respond to surplus lines placements at all.
How do I know if my policy was surplus lines?
The declarations page and the policy jacket typically say so, and a Florida surplus lines placement should carry a statutory disclosure telling you the insurer is not authorized in Florida and that guaranty-fund protection does not apply. Your agent can confirm it in a sentence. If nobody ever told you — and the file contains no disclosure — that absence is not a technicality; it is potentially the heart of a claim against the person who placed the policy.
Can I sue my broker just because my insurer went insolvent?
Not for the insolvency itself — an agent is not a guarantor of a carrier's solvency. The claim arises from the placement conduct: placing you in surplus lines without the required disclosure, moving you to a carrier the market already knew to be in distress without telling you, or failing to obtain coverage you actually asked for. The insolvency is what reveals those failures; it is not, by itself, the wrong.
What deadlines apply after an insolvency?
Three, running at once. The receivership court sets a claim-filing bar date. FIGA has its own claim requirements and timing. And the limitations period on any claim against the agent or agency runs on its own schedule, unaffected by either of the other two. Missing the first can extinguish a claim you already had; ignoring the third can extinguish one you did not know you had.