Florida will no longer be a market for Farmers Insurance.
Florida coverage is being discontinued by another property insurer.
Farmers Insurance announced Tuesday that it will stop taking on new clients and would not renew its “Farmers-branded” house, auto, and umbrella policies in the Sunshine State, according to an article by Hannah Morse of USA Today
Farmers informed the Florida Office of Insurance Regulation of its plans on Monday; the office is currently reviewing them. If an insurer wants to stop writing business in Florida, they must give the office 90 days’ notice.
The corporation stated in a statement that “this business decision was necessary to successfully manage risk exposure.”
According to Mark Friedlander, a spokesman for the Insurance Information Institute, Floridians are paying an average of $6,000 annually for their house insurance, a 42% increase over the previous year. In contrast, the typical annual premium in the United States is $1,700.
About 100,000 policies, or 30% of the company’s Florida business, will be impacted by the change. The affected policyholders must be informed 120 days in advance that their coverage will not be renewed.
Farmers has left the market since last year, joining Bankers Insurance and Lexington Insurance, an AIG affiliate.
Residents of Florida have limited options and must pay hefty prices as farmers leave.
Tasha Carter, a consumer advocate for Florida insurance, described the Farmers Insurance judgment as “devastating for all Floridians.”
It has a cascading effect on Farmers’ policyholders who may be forced to acquire new insurance during hurricane season and into a homeowners insurance market that is severely constrained in terms of availability and cost, according to Carter.
Mel Montagne, the leader of Fair Insurance Rates in Monroe, a grassroots advocacy group in the Florida Keys, spoke out against the most recent rate increase suggested by Citizens Property Insurance. He predicted that this would lead to higher insurance rates and more homeowners turning to the state-run insurer, he said.
As of the end of May, Citizens has 1.3 million policies, and it is still expanding.
It appears to be the only insurer in the state of Florida, he observed.
Other Farmers brand names’ policies won’t be impacted
Its other brands’ policies, including those sold under the names Bristol West, Foremost Signature, Farmers GroupSelect, Foremost Choice, and Foremost, won’t be impacted.
This is Florida’s property insurance market’s most recent foray into volatility. In the last 18 months, seven Florida property insurers have been deemed insolvent, and another 15 have ceased accepting new business, according to Friedlander.
The original article can be found on USA Today