The homeowners in Florida have received unfortunate news as another insurance company has decided to withdraw from the state due to potential liabilities. According to the Miami Herald, Farmers Insurance will no longer offer home, auto, or umbrella policies in the Sunshine State, making it the fourth company to make such a move in the past year. Farmers stated that this decision was necessary to effectively manage their risk exposure, citing the increased risk from hurricanes as one of the reasons. While no specific number was mentioned, Farmers estimated that around 30% of its policies in Florida would be affected, potentially impacting approximately 100,000 policyholders.
Despite this development, two of Farmers’ subsidiaries, Foremost and Bristol West, will continue to offer insurance policies. Farmers had already decided last month to stop writing new policies due to the high costs associated with hurricane damage and rebuilding. Interestingly, this decision was made despite the efforts of Gov. Ron DeSantis’ administration to make the state more appealing to insurers, including implementing measures to limit lawsuits against them.
The Miami Herald reports that Florida has seen over a dozen insurance companies go bankrupt in recent years, contributing to the state’s already high home insurance premiums. According to a representative from the Insurance Information Institute, the average premium in Florida is already 42% higher this year compared to 2022. Additionally, Farmers Insurance is not only leaving Florida but also placing restrictions in California due to “record-breaking inflation,” “reconstruction costs,” and “severe weather events” such as wildfires.
However, Florida officials are not pleased with this sudden development, which was kept under wraps until the last minute. Florida Insurance Commissioner Michael Yaworsky expressed disappointment and concern, stating that the decision could have cascading impacts on policyholders. Under Florida law, policyholders should receive 120 days’ notice before their policies are terminated. Farmers Insurance advises those affected to contact their agent to arrange for new insurance elsewhere. (Read more home insurance stories.)
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