The Florida insurance market took a hit Tuesday, as Farmers Insurance said it will end residential, auto and umbrella policies in the state, forcing tens of thousands of customers to look elsewhere for coverage.
The company said the move will affect only Farmers-branded policies and will not affect policies sold in the state by subsidiaries Foremost and Bristol West. It indicated the Farmers-branded policies make up about 30% of the policies sold by the affiliated companies in Florida.
“We have advised the Florida Office of Insurance Regulation of our decision to discontinue offering Farmers-branded auto, home and umbrella policies in the state,” Farmers spokesman Trevor Chapman said in a statement. “This business decision was necessary to effectively manage risk exposure. Farmers offers insurance through several different brands, and this decision applies only to policies issued through our exclusive agency distribution channel.”
Farmers will not write new policies or renew existing policies. The nonrenewals will play out over several months.
It was not immediately clear Tuesday how much of an impact the Farmers move will have on Florida’s troubled property-insurance market, where insurers have dropped hundreds of thousands of policies and raised rates during the past two years.
A source told The News Service of Florida that about 100,000 Farmers policies across the residential, auto and umbrella lines of business could be affected, though a breakdown by policy type was not available.
A state report indicated that, as of Dec. 31, Farmers Casualty Insurance Co. had 5,835 residential policies. By comparison, Foremost Insurance Co. and Foremost Property and Casualty Insurance Co. combined for nearly 62,500 residential policies, according to the report.
Bristol West sells auto insurance.
Saying he had heard rumors that Farmers might pull out of Florida, state Chief Financial Officer Jimmy Patronis on Monday blasted the company.
“If that’s true my office is going to explore every avenue possible for holding them accountable,” Patronis said in a Twitter post. “Don’t get to leave after taking policyholder money. Can’t write auto if you’re not doing homeowners either.”
That drew a retort from Rep. Hilary Cassel, D-Dania Beach, an attorney who represents policyholders in lawsuits against insurers.
“The only time your office has held an insurance company accountable is when you’re looking to collect a campaign check,” Cassel tweeted.
Samantha Bequer, a spokeswoman for the Office of Insurance Regulation, said in an email that the agency received a notice Monday from Farmers about exiting the market. The notice was listed as a “trade secret,” so its details were not publicly available Tuesday.
State law requires Farmers to give 90 days’ notice to the office before it can inform customers that policies will not be renewed.
Farmers also is limiting homeowners coverage in California, according to numerous recent media reports.
Jim Saunders and Jim Turner report for the News Service of Florida.
Source By https://www.law.com/dailybusinessreview/2023/07/12/florida-insurance-market-takes-hit-as-farmers-insurance-exits/