[ad_1]
Another property insurer is dropping coverage in Florida.
Farmers Insurance will stop writing new business and not renew its existing “Farmers-branded” automobile, home and umbrella policies in the Sunshine State, the company said Tuesday.
On Monday, Farmers sent notice of its plans to the Florida Office of Insurance Regulation, which is reviewing it. Insurers must give the office 90 days’ notice if they want to discontinue writing business in Florida.
“This business decision was necessary to effectively manage risk exposure,” the company said in a statement.
Floridians on average are paying about $6,000 for their yearly home insurance premium, an increase of 42% compared with last year, said Mark Friedlander, spokesperson for the Insurance Information Institute. By comparison, the average annual premium in the U.S. costs $1,700.
The move will impact 30% of the company’s business in Florida, or roughly 100,000 policies. Policyholders affected by the decision are required to be given 120 days’ notice that their coverage will not be renewed.
Farmers joined Bankers Insurance, Centauri Insurance and Lexington Insurance, a subsidiary of AIG, in withdrawing from the market since last year, he added.
Farmers pulling out of Florida leaves residents few options, high costs
Florida Insurance Consumer Advocate Tasha Carter called the decision from Farmers Insurance “devastating for all Floridians.”
“It creates a ripple effect – it directly impacts Farmers’ current policyholders who will be thrust into a position of having to find new insurance potentially during hurricane season and into a homeowners insurance market that is significantly limited in availability and affordability,” Carter said.
Mel Montagne, president of Fair Insurance Rates in Monroe, a grassroots activist group in the Florida Keyes, who spoke out against the most recent rate increase proposed by Citizens Property Insurance, said he anticipates that this will result in increased insurance rates and more homeowners relying on the state-run insurer.
Citizens continues to grow, with 1.3 million policies as of the end of May.
“It’s becoming the only insurer in the state of Florida, it seems,” he said.
More:‘I almost had a heart attack’: Florida homeowners rattled by property insurance costs
Policies under other Farmers brand names won’t be affected
Policies under its other brands such as Bristol West, Foremost Signature, Farmers GroupSelect, Foremost Choice and Foremost-branded policies will not be affected.
This marks the latest stumble into instability for Florida’s property insurance market. Seven Florida property insurers were declared insolvent in the past 18 months, and another 15 have stopped writing new business in the same time period, Friedlander said.
Farmers makes Florida second state it leaves, joining California
Florida is not the only state the insurance agency has exited the market. In May the company stopped accepting applications for business and personal lines and casualty insurance in California.
At the time, the company cited wildfire risks and construction costs as reasons for exiting the state and said in a news release it was, “necessary to take these actions now to improve the company’s financial strength.”
State lawmakers react
In a letter a Farmers executive Tuesday, Florida Insurance Commissioner Michael Yaworsky expressed that he would have preferred to speak with the company prior to being given notice, and that his office was “disappointed by the hastiness in this decision and troubled by how this decision may have cascading impacts to policyholders.”
The decision to pull business from Florida was “made independently” of a number of legislative changes made to address the insurance market, Yaworsky wrote, and was “part of a broader series of actions Farmers is making across the country and not solely focused on Florida.”
The letter also notes that Farmers committed to transferring affected policyholders to other insurance companies. Anyone who receives a nonrenewal notice from Farmers should contact their agent as soon as possible to seek other coverage.
State lawmakers attempted to address the property insurance crisis with two special sessions last year and the most recent regular session. This included stopping one-way attorney fees and prohibiting third parties such as roofers or contractors from being paid directly by insurance companies.
More:Citizens wants its rates to go up by double digits. Will insurance regulators agree?
State CFO Patronis calls out Farmers on Twitter
A day before the Farmers announcement was made public, Florida Chief Financial Officer Jimmy Patronis tweeted that he heard rumors about Farmers leaving Florida and that the Department of Financial Services “is going to explore every avenue possible for holding them accountable.”
“Don’t get to leave after taking policyholder money. Can’t write auto if you’re not doing homeowners either. Zero communication!” Patronis wrote.
The Palm Beach Post reached out to the department on Tuesday for further comment and whether the policies under other Farmers brands would be looked into. A spokesperson did not respond and instead directed a reporter to the Office of Insurance Regulation.
Contributed: James Powel
Hannah Morse covers consumer issues for The Palm Beach Post. Drop a line at hmorse@pbpost.com, call 561-820-4833 or follow her on Twitter @mannahhorse.
[ad_2]
Source link
