Farmers refuse property insurance in Florida despite efforts to stabilize the market
TALLAHASSEE, Florida (FloridaToday.news) — Farmers Insurance became the latest property insurance company to exit Florida on Tuesday, despite repeated efforts by Republican Gov. Ron DeSantis and the Legislature to try to calm a volatile market that is making homeownership less affordable. .
Farmers have told the state that it is ending new policy coverage for cars, houses and umbrellas. The company said in a statement that the decision affects policies issued through its “exclusive agent distribution channel.” It says it won’t affect 70% of current policies in Florida.
Critics of DeSantis, who is seeking the Republican presidential nomination, say he has focused too much on cultural divisions and not enough on making housing and insurance more affordable. The legislature has dealt with this issue each of the past two years, including a special session in December.
The focus was on protecting insurance companies from lawsuits and allocating money for reinsurance to help protect insurers. The Insurance Regulatory Authority sent a letter to farmers in response to notification that it does not plan to issue new policies.
“Florida’s leaders have taken charge by driving historic reforms in Florida’s property insurance market to ensure competitiveness and expand consumer choice,” Insurance Commissioner Michael Jaworski wrote at the company.
However, Jaworski noted that recent changes in the state’s laws did not affect Farmer’s decision.
“We are disappointed with the haste of this decision and are concerned about how this decision could have cascading effects on policyholders,” he wrote.
The farmers’ statement said the decision was based on exposure to risk in the hurricane-prone state and that notices will be sent out to affected policyholders along with recommendations to replace coverage. The company’s website on Tuesday responded to requests for quotes for several Florida zip codes, saying coverage was not available and offering links to other companies and resources.
At the end of 2022, Florida’s average annual property insurance premiums rose to over $4,200, three times the national average. According to the Insurance Information Institute, a research organization funded by the insurance industry, about 12% of homeowners in the state had no property insurance, compared to a national average of 5%. At least six insurance companies went bankrupt in Florida last year.
Florida has struggled to keep the insurance market healthy since 1992, when Hurricane Andrew flattened Homestead, wiped out some insurance companies, and left many remaining companies afraid to write or renew policies in Florida. Vector risks are also rising as climate change increases the strength of hurricanes and the intensity of downpours.
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