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Farmers Florida Exit to Affect 100,000 Policyholders

This week, Farmers Insurance said it will stop offering home, auto and umbrella policies in Florida.
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This week, Farmers Insurance said it will stop offering home, auto and umbrella policies in Florida. The move is estimated to affect around 100,000 insureds.

The decision is the latest in a string of similar high-profile insurance carrier announcements. In the last two months, Nationwide, Allstate and State Farm have all pulled back from property and auto markets. Each company cited catastrophe exposures and inflation for their decision and noted that the withdrawal was necessary to protect the company's financial stability.

In the past 18 months, 15 companies have decided to stop writing new business in Florida. In 2022, the state placed six insurers into receivership because of insolvencies, and in February, St. Petersburg-based United Property & Casualty, which wrote about 135,000 policies in Florida, was forced into insolvency after Hurricane Ian. 

“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," said Trevor Chapman, director of public relations at Farmers, in a statement on Tuesday. “This business decision was necessary to effectively manage risk exposure."

“Affected customers will receive notifications detailing when their coverage will end and will be advised of options for replacement coverage," he said.

However, there will be no impact to customers who use Farmers' owned subsidiaries like Foremost Signature and Bristol West, the company said.

"Farmers offers insurance through several different brands, and this decision only applies to policies issued through our exclusive agency distribution channel," Chapman said. "There is no impact to 70 percent of policies currently in force for customers in the state, including Bristol West, Foremost SignatureSM, Farmers GroupSelectSM, Foremost Choice and Foremost-branded policies. Such policies will continue to be available to serve the insurance needs of Floridians."

Upon hearing the news, Jimmy Patronis, Florida's chief financial officer, reacted angrily and slammed the decision, accusing Farmers of prioritizing profits and politics over policyholders, promising to protect those affected.

“I've always said that when big decisions are made on insurance the policyholder is rarely in the room; unfortunately Farmers proved me right," he said. “I've asked my team to put their heads together in holding Farmers Insurance accountable."

“I want additional scrutiny on this company," Patronis said, affirming his desire to make sure that any refunds are returned to insureds, and, in conjunction with the Florida Association of Insurance Agents, ensure the bulk transfer of policies is handled as seamlessly as possible.

Recently, Farmers also limited new homeowners insurance policies in California, joining other major national companies. The company placed a cap on the number of policies in California effective July 3, citing high costs and wildfire risks.

“With record-breaking inflation, severe weather events, and reconstruction costs continuing to climb, we are focused on serving our customers while effectively managing our business," Farmers said in a statement, adding it will limit the new policies “to a level consistent with the volume we projected to write each month before recent market changes."

Will Jones is IA editor-in-chief. 

Thursday, August 17, 2023
In the News