Federated National Home Insurance Review: Poor Service But Still Above Average Among Florida Insurers

Federated National Home Insurance Review: Poor Service But Still Above Average Among Florida Insurers

Editor's Rating

Affordable rates make this a good option for Florida homeowners, despite negative customer service reviews.

Good for

  • Residents of Florida
  • Insurance shoppers focused on low prices

Bad for

  • Homeowners looking for a wide variety of home coverage options
  • People who want to bundle their insurance policies
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Editor's Rating

Affordable rates make this a good option for Florida homeowners, despite negative customer service reviews.

Good for

  • Residents of Florida
  • Insurance shoppers focused on low prices

Bad for

  • Homeowners looking for a wide variety of home coverage options
  • People who want to bundle their insurance policies
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Federated National is a regional insurance company that offers straightforward, no-frills home insurance at affordable rates to Florida homeowners. The company, also called FedNat, has negatively rated customer service. But it's one of the most popular home insurance companies in Florida, and it outperforms its competition, so it may be among the better options for homeowners insurance in the state.

Contents

Federated National Home Insurance: Our thoughts

When compared to most nationally known insurers, Federated National doesn't look great: The company has some serious customer service issues, and it lacks a lot of coverage options available in most states. However, homeowners in Florida often have a limited set of options for home insurance, so Federated National is nevertheless one of the best options for Floridians looking for home insurance coverage.

Home insurance rates from Federated National were consistently on the more affordable side, though the company was not drastically cheaper than its competitors. The quotes we received were below-average for each of the sample home profiles we collected, for both lower-cost and more elaborate homes.

Additional benefits are fairly limited for Federated National customers; it doesn't offer many perks, discounts or additional coverage options that homeowners can use to protect their homes. It does offer flood insurance and personal liability umbrella coverage, however.

The most troubling aspect of Federated National is its poor customer service reviews. It has an alarmingly high number of complaints registered with the National Association of Insurance Commissioners, suggesting that customers are often unhappy with the service they receive. However, several of its biggest competitors, including Universal Property Insurance and Citizens Property Insurance, have even worse records with the NAIC.

Bottom line

Federated National has low rates for home insurance, though its coverage options and customer service leave a lot to be desired. But Florida homeowners can struggle to get coverage from nationally known providers, and it outperforms its regional competition; as such, it is still one of the best options for Florida homeowners.

Federated National Homeowners Insurance coverages

Federated National offers straightforward HO-3 homeowners insurance coverage to its customers. These standard policies cover the structure of your home for "open perils," which means you'll be reimbursed for damage from any cause, except for some named exclusions. For example, HO-3 policies protect you against fire, lightning, hail and wind damage, but they don't cover you in the case of war, earthquakes or flooding.

A standard homeowners policy also protects your personal property, such as your furniture, clothing, appliances and electronics. However, these items are only covered if damaged by a peril named in your policy.

Federated National doesn't include much in the way of extra benefits or discounts to homeowners buying standard policies. For example, other insurance companies might give you a discount for buying both home and auto insurance together, or allow you to cover your belongings for their full replacement value without considering depreciation; FedNat doesn't offer these perks.

Supplementary coverages available from Federated National

While FedNat's additional coverages are fairly limited, it does offer a few coverage options beyond standard homeowners insurance that allow you to boost how your insurance protects you. Available coverages include:

  • Federally backed flood insurance: This coverage, backed by the federal government, pays for damage to your home from flooding. Note that the rates and requirements for this flood insurance are set by the government and don't differ among insurers.
  • Umbrella liability coverage: Umbrella liability protects you in case someone sues you for medical or other damages, such as if they are injured while on your property.

Online service options

Federated National's website offers about as much functionality as you'd expect from a small regional insurance company, but is not as fully featured as those run by nationally known insurance companies. While insurance shoppers can request insurance quotes online, they'll have to wait for an agent to reach out to find out how much FedNat will charge, as well as actually buy a policy. Existing customers can also pay their bills and file claims online, but the process is not fully automated. Additionally, the only way to cancel an insurance policy with Federated National is in writing; it can't be done on the web or even over the phone, making it unduly difficult to stop service if you're unsatisfied.

Federated National Home Insurance quote comparison

We found Federated National to be a consistently affordable option for Florida homeowners. Its quotes for standard home insurance came in well below average for each of our three sample homes, when compared to three top Florida insurers. Federated National had the cheapest home insurance rates for one of our three properties and was less than 5% more expensive than the most affordable option in the other two.

Federated National Home Insurance Rates vs Competitors

Federated National customer service reviews and ratings

Federated National consistently receives poor customer service reviews. The company has a complaint ratio from the National Association of Insurance Commissioners of 5.28, indicating that it has garnered an extremely high number of complaints relative to other companies its size.

The most common reasons for filed complaints were regarding denied claims, followed by unsatisfactory settlements and delays during the claims process. However, Federated National's three biggest competitors for home insurance in Florida — Universal Property, Citizens Property and Security First — far surpass Federated National's complaint ratio; this suggests that FedNat may in fact be one of the more reliable options for Florida homeowners.

The company has positive ratings for its financial stability, having received an "A" financial rating from financial rating service Demotech. An "A" rating means that Demotech believes Federated National has the ability to withstand a general economic downturn and pay out claims. However, "A" is only the third-best rating Demotech provides, so there is room for improvement.

Maxime Croll

Maxime is a Sr. Director at ValuePenguin focusing on the insurance industry. Previously she was the Director of Product Marketing at CoverWallet, a commercial insurance startup, and helped launch NerdWallet's personal insurance business. Maxime has contributed insurance insights and analysis to Forbes, USA Today, The Hill, and many other publications.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.