Following the devastating 2022 hurricane season, AAA is not renewing some insurance policies in Florida.
ORLANDO, Florida (TodayNews) — AAA will not renew a “very small percentage” of homeowner and auto insurance policies in hurricane-hit Florida, joining other insurers in limiting their risks in the Sunshine State, despite lawmakers’ efforts to calm the volatile situation. insurance market, the company said on Tuesday.
The AAA said in a statement that it is not leaving Florida, but last year’s devastating hurricane season led to “unprecedented” increases in reinsurance rates, making it more costly to operate.
Company officials declined to say how many Florida policies would not be renewed, but said they were “higher risk” bundled policies that combine homeowner and auto policies and were signed by Florida’s Auto Club Insurance Company. The AAA spokesman did not elaborate on how the company defines “higher risk” when asked.
“This is a decision we do not take lightly,” AAA said in a statement. “We recognize that this is a difficult time for those affected.”
Affected policyholders have already been notified and can apply for auto insurance from sister carrier Auto Club South Insurance. AAA also said it will continue to write other, new policies for the home and automobiles, despite the decision not to renew some policies.
Insurance issues in Florida leave some homeowners like Lawrence Colin in trouble. His insurance company did not renew the policy of his stucco and brick house with a Spanish tiled roof near downtown Orlando. Because he has 30 days left before his insurance expires, he can’t get another insurance company to make him an offer.
“My home has survived 84 years of hurricane seasons,” Colin, an Orlando mediator and trial attorney, said Tuesday. “It’s just an unbearable situation.”
Florida has struggled to maintain stability in the public insurance market 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.
The AAA decision comes a week after Farmers Insurance said it was ending new auto, home and umbrella insurance in Florida, joining a long list of insurance issues that have recently hit the Sunny State.
At least six insurance companies went bankrupt in Florida last year. 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 the national average of 5%.
The Legislature and Florida Gov. Ron DeSantis have dealt with the 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. Critics of DeSantis, who is running for the 2024 Republican presidential nomination, say he has focused too much on cultural divisions and not enough on making housing and insurance more affordable.
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