Federated National Insurance Reviews: Financial Stability Ratings & Complaint Record

This review analyzes the recent home insurance complaint record (2010, 2011, 2012, & 2013) for Federated National Insurance Company, the fifth largest seller of new home insurance policies in Florida, and discusses its financial strength ratings. Many insurance customers make the mistake of failing to check the complaint record of their insurance company. For auto & home insurance, people should avoid companies with a recent histories of higher than average number of complaints filed with a state’s regulatory authority, if possible. Most complaints are often about the denial, delay, or insufficient payment of a claim. This review rates the home insurance complaint history for the last four years (data for 2014 is not available yet) for Federated National Insurance Company, to let you know if Federated National is performing worse-than-average, average, or better-than-average, for homeowners insurance complaints, compared to the industry average. Another concern, particularly for people residing in hurricane or disaster-prone states, is the financial strength of their home insurance companies, to be able to promptly & fully pay the claims of all its customers. This review will explore how Federated National Insurance Company is rated for financial strength, stability, and claims-paying ability. The last part of this review will discuss how Federated National Insurance Company’s complaint record compares to other major Florida home insurance companies.

Federated National Insurance Company Complaints & Ratings Review

This Federated National Insurance Company review is divided into four sections, consisting of: 1. a brief company overview, 2. its financial stability ratings, 3. its home insurance customer complaint ratings, and 4. information about competing home insurance companies, and how their complaint records compare to Federated National Insurance Company.

1. Federated National Insurance Company Overview

Federated National Insurance Company established in 1992, underwrites homeowners’ multi-peril, condominium, renters, high value home coverage, federal flood, personal auto and various other lines of insurance in Florida. Federated National also offers Commercial General Liability insurance for many types of businesses in a few other states. You can request an insurance price quote online, or find a local independent insurance agent representing Federated National, through the Federated National Insurance Company Website.

2. Demotech, Inc. Financial Stability Rating & Weiss Financial Strength Rating for Federated National Insurance Company

Federated National Insurance Company had its A (Exceptional) Demotech financial stability rating affirmed on 11/22/2014. A is the third highest Demotech rating. AM Best, the best-known insurance company rating agency, does not rate Federated National Insurance Company. AM Best does not rate many of the regional Florida home insurance companies. The lack of an AM Best rating is neither good or bad. Insurance companies pay AM Best to rate them, and many smaller, regional, or specialty insurance companies do not seek to be rated by AM Best, choosing Demotech, Inc., instead.

You may remember from the 2007-2008 financial crisis, there was a great deal of default on “AAA” rated mortgage debt, rated by companies, like Moody’s and Standard & Poor, paid by the companies they rate to rate them, resulting in concerns of biased judgment. AM Best & Demotech, Inc. also are paid by the companies they rate, to rate them. This may be why there are so many AM Best & Demotech rating grades using superlatives, like “Excellent,” “Superior,” or “Unsurpassed.” For example, Federated National has only the third highest Demotech rating, but that rating is labeled “Exceptional.”

Using the ratings of the rigorously conservative rating company, Weiss Ratings, may be more objective, because Weiss is not paid by the companies it rates. I encourage all my readers to sign up and use the information at the Weiss Ratings Website. It’s a great source for objective information about banks, credit unions, investments, and insurance companies. There is a lot of useful free information, if you decide you don’t need unlimited access to all its reports.

As of 2/2/2014, the original date of this review, Weiss rates Federated National Insurance Company as “C-” (fair) for financial strength. This is a far cry from Demotech’s “Exceptional” rating. But in Florida, it’s hard to find an home insurance company with strong financial stability. Even the Florida subsidiary of State Farm (the largest home & auto insurer in the USA by far), State Farm Florida Insurance Company, is rated “C-” (fair) by Weiss, recently upgraded from “D+”. When choosing a Florida home insurance company, there may be little difference in the financial strength of the insurance companies available to you.

3. Federated National Insurance Company Home Insurance Complaint Statistics & Ratings

The complaint statistics used in this Federated National Insurance review are the number of upheld complaints filed against Federated National Insurance Company with a state’s insurance regulatory authority, adjusted for the company’s market share, as determined by the National Association of Insurance Commissioners (NAIC). Complaint ratios lower than “1” have less complaints than average, and complaint ratios over “1” have more complaints than average. The lower the complaint ratio, the less complaints against the company. The higher the complaint ratio, the more complaints against the company. For example, an home insurance complaint ratio of 1.00 would be exactly equal to the industry average. A complaint ratio of 1.75 means 75% more complaints than the industry average. An home insurance complaint ratio of .50 means half (50%) the number of complaints as the industry average.

I devised a simple rating system, based on the NAIC complaint ratios, to help you decide if Federated National Insurance Company is best for you. By choosing a company with a better-than-average complaint history, or at least avoiding companies with consistent, worse-than-average complaint records, you decrease the likelihood you will have a negative experience, when you need your home insurance company.

Here’s how I establish my home insurance complaint ratings:

B = Better than average. Insurance companies with complaint ratios less than 75% of the average insurance company.

C = Average. Insurance companies with complaint ratios from 75% to 125% of the average insurance company.

W = Worse than average. Insurance companies with complaint ratios more than 125% of the average insurance company.

Federated National Insurance Company Home Insurance Complaint Statistics & Ratings

B = Better than Average C = Average W = Worse than Average

2013 Home Insurance Complaint Ratio = B (.30)

2013 US home insurance premium = $221,405,762

2012 Home Insurance Complaint Ratio = W (1.33)

2012 US home insurance premium = $103,400,759

2011 Home Insurance Complaint Ratio = C (1.22)

2011 US home insurance premium = $79,947,781

2010 Home Insurance Complaint Ratio = No data

2010 US home insurance premium = No data

Federated National Insurance Company had a higher than average number of home insurance complaints in 2011 & 2012, but improved greatly in 2013, with its number of home insurance complaints at only 30% of the average for all home insurance companies nationally. The Florida home insurance market share for Federated National Insurance Company has more than doubled from 2012 to 2013, which may be a strong signal Federated National Insurance Company has competitive home insurance rates.

4. Federated National Insurance Company’s Home Insurance Complaint Record Compared to Other Major Florida Home Insurers.

The complaint statistics in section three of this review show how the home insurance complaint record for Federated National Insurance Company compares to other home insurance companies nationally. This is useful, because the average number of complaints for the Florida home insurance market is likely to be higher than the national average, at least in some years, since most complaints are claims related, and Florida is prone to a large number of home insurance claims due to hurricanes, than the nation as a whole. If a Florida home insurance company has a better than average complaint record when compared nationally, it has a good complaint record overall, not just a good complaint record compared to other Florida home insurance companies.

However, if you live in Florida, you also want to compare Federated National Insurance Company to other Florida home insurance companies. I’ve recently written comprehensive reviews of the companies in the Florida home insurance market, comparing the Florida home insurance complaint records of the major Florida home insurance companies (including Federated National Insurance Company), using the latest data from the Florida Office of Insurance Regulation, from 2009 to 2013 (2014 data should be available later in 2015). Read my reviews of the 2009-2013 complaint record for the 25 largest home insurance companies in Florida, and for the 25 companies selling the most new home insurance policies in Florida, so you can compare the Florida home insurance complaint record of Federated National Insurance Company, with all the other major home insurance companies in Florida.

I’m writing individual reviews, like this one for Federated National Insurance Company, for each of the 25 largest home insurance companies in Florida, as well as each of the 25 companies selling the most new home insurance policies. Bookmark or favorite this page or my site, to check out my future reviews.

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Thanks for reading this review about Federated National Insurance Company home insurance complaints & its financial strength ratings. You can find other reviews of leading auto, home, & life insurance companies on my website & blog. What do you think of Federated National Insurance Company? Did you find this review useful? Comment on my facebook page. If you have questions, you can reach me at help@smartshopyourcarinsurance.com. Follow me on Twitter for important insurance consumer news & new blog entries at CarInsWatch.