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Fair Value Measurement
 9 Months Ended
Sep. 30, 2023
Fair Value Disclosures [Abstract]  
Fair Value Measurement
4. Fair Value Measurement
When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions, and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
•Level 1 — Quoted prices in active markets for identical assets or liabilities that are publicly accessible at the measurement date.
•Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
•Level 3 — Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.
The following table summarizes the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis (in millions):
September 30, 2023
Level 1Level 2Level 3Total
Financial assets:
Cash, cash equivalents, and restricted cash$269.4 $— $— $269.4 
Fixed maturities available-for-sale:
U.S. government and agencies22.1 — — 22.1 
States and other territories— 9.5 — 9.5 
Corporate securities— 69.4 — 69.4 
Foreign securities— 0.9 — 0.9 
Residential mortgage-backed securities— 18.9 — 18.9 
Commercial mortgage-backed securities— 7.0 — 7.0 
Asset backed securities— 13.7 — 13.7 
Total fixed maturities available-for-sale22.1 119.4 — 141.5 
Short-term investments
U.S. government and agencies123.3 — — 123.3 
Commercial paper— 47.6 — 47.6 
Corporate securities— 17.6 — 17.6 
Total short-term investments123.3 65.2 — 188.5 
Total financial assets$414.8 $184.6 $— $599.4 
Financial liabilities:
Contingent consideration liability$— $— $13.5 $13.5 
Public warrants0.1 — — 0.1 
Private placement warrants— 0.1 — 0.1 
Total financial liabilities$0.1 $0.1 $13.5 $13.7 
December 31, 2022
Level 1Level 2Level 3Total
Financial assets:
Cash, cash equivalents, and restricted cash$244.5 $— $— $244.5 
Fixed maturities available-for-sale:
U.S. government and agencies21.1 — — 21.1 
States and other territories— 8.3 — 8.3 
Corporate securities— 52.5 — 52.5 
Foreign securities— 0.8 — 0.8 
Residential mortgage-backed securities— 18.9 — 18.9 
Commercial mortgage-backed securities— 5.8 — 5.8 
Asset backed securities— 13.7 — 13.7 
Total fixed maturities available-for-sale21.1 100.0 — 121.1 
Short-term investments
U.S. government and agencies128.9 — — 128.9 
Commercial paper— 146.5 — 146.5 
Corporate securities— 49.4 — 49.4 
Total short-term investments128.9 195.9 — 324.8 
Total financial assets$394.5 $295.9 $— $690.4 
Financial liabilities:
Contingent consideration liability$— $— $11.9 $11.9 
Public warrants0.2 — — 0.2 
Private placement warrants— 0.1 — 0.1 
Total financial liabilities$0.2 $0.1 $11.9 $12.2 
The Company’s policy is to recognize transfers into and transfers out of fair value hierarchy levels at the end of each reporting period. There were no transfers between levels in the fair value hierarchy during the nine months ended September 30, 2023.
Contingent Consideration
The contingent consideration, relating to the Company’s 2019 acquisition of North American Advantage Insurance Services, LLC, is re-valued to fair value at the end of each reporting period using the present value of future payments based on an estimate of revenue and customer renewals. North American Advantage Insurance Services, LLC’s ultimate parent company was Lennar Corporation, a related party of the Company. There is no limit to the maximum potential contingent consideration as the consideration is based on acquired customer retention. The table below presents the changes in the contingent consideration liability valued using Level 3 inputs (in millions):

20232022
Balance as of January 1,$11.9 $11.6 
Payments of contingent consideration(2.9)(2.4)
Changes in fair value4.5 2.6 
Balance as of September 30,$13.5 $11.8