TALLAHASSEE, Fla. – Oct. 21, 2016 – The Florida Insurance Guaranty Association (FIGA) protects homeowners if their property insurer suddenly goes under. Funded by all insurance companies in the state, FIGA does not necessarily have to pay the same level of benefits stated in the homeowner's now-defunct policy.

"When obtaining an insurance policy, the policyholder obtains no vested right to a future government bailout if the insurer becomes insolvent," Supreme Court Justice Charles Canady wrote on behalf of a unanimous court.

The Florida Legislature created FIGA as a homeowner protection that pays at least a portion of any insurance claim after a property insurer goes broke, the court said, calling it "a limited statutory safety net for the insured."

The decision in Fuente vs. Florida Insurance Guaranty Association made it clear, however, that benefits paid by FIGA are determined by the Florida Legislature.

In the case, a Tampa homeowner with HomeWise Preferred Insurance Co. held a homeowners policy that included sinkhole insurance. In 2011, HomeWise was declared insolvent two months after Fuente submitted a sinkhole claim that had not yet been settled. While the Florida Legislature had approved a more restrictive state law in 2011, Fuente argued that it shouldn't apply in this case because it would make the law retroactive.

But the Supreme Court disagreed, reversing an earlier Leon County ruling that awarded Fuente $130,000.

Source: Florida Politics, Michael Moline, Oct. 20, 2016

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