Farmers Insurance Exits Florida, Affecting 100,000 Policies

Farmers Insurance said Tuesday it will stop offering coverage in Florida, ending home, auto and other policies in the state in a move that will affect tens of thousands of residents.

Farmers becomes the fourth major insurer to exit Florida in the past year as the state’s insurance market looks increasingly precarious amid a growing threat from extreme weather.

“We have notified the Florida Office of Insurance Regulation of our decision to stop offering Farmers brand 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.”

Under Florida law, companies must give three months’ notice to the Office of Insurance Regulation before telling customers their policies will not be renewed. CBS Miami reports

Samantha Bequer, a spokeswoman for the Office of Insurance Regulation, told CBS Miami that the agency received a notice Monday from Farmers about the departure from Florida. The notice was classified as “trade secret,” so its details were not publicly available Tuesday.

Farmers said the move will affect only the company’s brand policies, which account for about 30 percent of its policies sold in the state. Policies sold by the Foremost and Bristol West subsidiaries will not be affected.

As a result, about 100,000 Florida policies will be terminated, it said CBS Miami.

Farmers have done it too new policies limited to California, which has seen record wildfires fueled by climate change. Allstate and State Farm have also stopped issuing new policies in the state.

Insurance costs rise with mercury

The exodus from Florida is the latest sign that climate change, exacerbated by the use of fossil fuels, is destabilizing the U.S. insurance market. Already, homeowners in the state pay about three times as much for insurance coverage as the national average, and rates this year are expected to increase by about 40 percent.

Millions of low-income Floridians are at risk of a major gap in insurance coverage

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Multiple insurers in the state have gone out of business, facing massive storm payouts. Meanwhile, warmer air and water make hurricanes stronger and more damaging.

Florida Chief Financial Officer Jimmy Patronis, who oversees the insurance regulator, tweeted Monday that if Farmers withdraws, “My office will explore every avenue possible to hold them accountable.”