More homeowners in Florida received some bad news this week, with yet another insurance company pulling out of the state due to too much possible liability. The Miami Herald reports that Farmers Insurance will no longer be offering home, auto, or umbrella policies in the Sunshine State, the fourth carrier to make such a move over the past year. "This business decision was necessary to effectively manage risk exposure," Farmers said in a statement, citing increased risk from hurricanes as part of its reasoning. The company didn't say how many customers would ultimately lose coverage, but it noted that it believes about 30% of its policies in Florida would be affected. A source tells the News Service of Florida, via CBS Miami, that the change may affect 100,000 policyholders.
Two of its subsidiaries, home insurer Foremost and auto insurer Bristol West, will continue to offer insurance policies, the company added. Farmers had already decided last month to stop writing new policies due to "historically high" costs wrought by hurricane damage and rebuilding. The AP notes that Farmers' decision came despite the fact that Gov. Ron DeSantis' administration has been trying to make the state more palatable for insurers—including by setting up barriers for lawsuits against them.
The Herald reports that more than a dozen insurance firms have gone bankrupt in recent years in Florida, which claims some of the highest home insurance premiums in the country. A rep from the Insurance Information Institute says the average premium is already 42% higher this year than it was in 2022. Quartz, meanwhile, notes that Florida isn't alone in the Farmers' exodus: The company has set a cap of 7,000 new policies per month in California, where it cited "record-breaking inflation," "reconstruction costs," and "severe weather events," including wildfires.
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Misery doesn't necessarily love company, though. Florida officials aren't happy with the sudden development, which was kept hush-hush until the last minute. "We are disappointed by the hastiness in this decision and troubled by how this decision may have cascading impacts to policyholders," Florida Insurance Commissioner Michael Yaworsky wrote in a letter, per the Herald. "Any impact [that] impacts policyholders should not be taken lightly." Under Florida law, policyholders are supposed to receive 120 days' notice before their policies vanish. Farmers says if anyone receives such a notice in the coming weeks, they should contact their agent to arrange for new insurance elsewhere. (More home insurance stories.)
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