Farmers Insurance pulls out of Florida, affecting 100,000 policyholders

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This is the fourth insurance company to fully pull out of Florida in the last year, this one affecting around a 100,000 customers, all in a market already affected by sky high insurance rates -- the highest in the nation. Bankers Insurance, Centauri Insurance and Lexington Insurance, a subsidiary of AIG, have already ceased operations in Florida.

Why is this happening? While the pullout is being treated as a "trade secret" and no details are being released yet, the company put out a statement that it was to limit "risk exposure". What this means is that that are trying to protect their profits. They can no longer justify operating in Florida when they pay out more money than they take in. And since they are not a socialist government, nor are they the Red Cross and are in it to make money, they are ending operations.

What happens when the fifth company pulls out? The tenth? The final one? How will people in Florida and the surrounding states be able to insure their homes and other property, particularly considering the ever increasing rates and the intensity of hurricanes and floods?

Farmers Insurance will stop offering its policies in Florida, including home, auto and umbrella policies, in a change that will force thousands of people to change their insurance provider.

The company said in a statement that its decision to get out of Florida was a business decision necessary to manage its risk exposure in the hurricane-prone state. Farmers serves 100,000 customers in Florida but said there will be no impact to customers who use Farmers’ owned subsidiaries like Foremost Signature and Bristol West.

“Over the past 18 months in Florida, 15 home insurers have placed moratoriums on writing new business, four carriers have announced plans to voluntarily withdraw from the market and seven companies have been declared insolvent,” Mark Friedlander, a spokesperson for Insurance Information Institute, told CNN. “Currently, there are 18 Florida residential insurers on the state regulator’s watch list due to concerns over their financial health.”

In addition to extreme weather, Florida insurers point to a legal system it says promoted litigation abuse and excess claims.

Another interesting thing to watch will be how the government responds to this. Will the governor increase spending to fortify infrastructure, the roads and the bridges, flood prevention etc., or will he try to strong arm these companies, take them to court and force them to do business in his state?

Insurance is just theft anyway however this feels like a tactic to make all insurance mandatory in Florida to provide us with "cheaper prices" with "competition"?

a reply to: Mahogany

If the carrier can't make an underwriting profit/are sustaining loss ratios that are too high, they can't continue to operate or provide coverage to policyholders unless they are heavily subsidized.

Florida is also the most litigious state when it comes to frivolous suits that cost a lot to settle, even when it's a black & white situation and coverage doesn't need to be provided the carrier needs to spend money on legal fees which is another big reason carriers are leaving the state.

I work in property & casualty insurance & deal with Florida and these carriers on a regular basis... that's my inside scoop for what it's worth.

Same thing is happening in California with a few major insurance agencies not offering new coverage. They say it is due to the rising cost and frequency of climate change spurred natural disasters like wildfires and epic rain

a reply to: Mahogany

There are lots of billboards all over the country telling people how easy it is to sue someone else if you just call a specific attorney. Car insurance will be leaving certain states also. They can't just leave a particular section of a state or they will be called discriminatory.... it's all or nothing

a reply to: Gothar

Allstate & State Farm will no longer provide property coverage in CA, carriers still there will be raising their rates to offset increasing claims costs & loss exposures

originally posted by: FishsticksAndKetchup
Insurance is just theft anyway however this feels like a tactic to make all insurance mandatory in Florida to provide us with "cheaper prices" with "competition"?

OK. If insurance is "theft," how about we get rid of it altogether? And if you incur a loss yourself, or cause a loss to someone else, you pay the full amount. If your house gets destroyed in a storm, rebuild it yourself from your own funds. Don't wimp out and ask for "help." If you run into someone and are liable for their injuries, or even death, you pay. If that's more than your net worth, well, turn it over and never have any "net worth" in the future. You might get lucky and nothing happens to you,

but you better cross your fingers.

Don't wimp out and ask for "help." If you run into someone and are liable for their injuries, or even death, you pay. If that's more than your net worth, well, turn it over and never have any "net worth" in the future. You might get lucky and nothing happens to you,

a reply to: schuyler


The money you save on insurance will be eaten up by your attorneys when the lawsuits start rollin in.

But when you own nothing and are eating bugs, it's all good!

I am retired from the insurance industry and I can tell you exactly why insurance companies are pulling out of Florida. It's because the state has created one piece of legislation after another requiring insurers to pay for damages that have always been considered "uninsurable risks". Every policy has "exclusions" listed and typically, those are uninsurable risks.

An example would be a homeowner who buys a home in a historic flood plane; the cost is simply too devastating, to the insurers bottom line, so floods are excluded. In recent years, Floridaians have been crying foul and demanding that their insurers pay for things such as floods. Without thinking things through logically, and in typical reactionary fashion, the Florida legislators pandered to their base and this is the result.

The insurance industry initially raised their rates to offset the additional costs associated with their newly legislated financial obligations; but a declining customer base (those who could no longer afford insurance) made that unfeasible as well. So the insurance companies options are to either pay out more in damages than they bring in through premiums or cancel policies and pull out of the state.

This isn't unique to Florida, many insurers have pulled out of California due to the regularity of costly,widespread wildfires; though Farmers isn't one of them; as they are based out of Cali.

As they say...

Lloyds of London will be there, insuring anything and everything just like old times

This is happening in the mountains of Colorado. Many companies won't insure the mountain homes. Too much fire risk.

a reply to: Mahogany

There are some places that shouldn’t have houses. Florida might be one of those places. I’m not talking old Florida, I’m talking new Florida with houses right up to the water. When the hurricanes hit, and they will, there will be expensive damage. Same goes for California, and high fire risk places. Let the homeowner deal with it. Either they will need to buy the house whole, or they shouldn’t move there. All the rest of us shouldn’t have to supplement these risky locations.

That being said insurance is a scam, how did we allow it to get to this point?

a reply to: Mahogany

Look and see if they have term and whole life insurance policies as well. The legislative sh!t has not hit the fan yet, but if they have life policies, they are paying out 140% or more of what they were paying out last year. This isn't about property damage payouts, as hurricanes and floods have DECREASED in Florida. This is about the effects of the mRNA jab and it is being used as a political weaponized excuse to attack Florida to hurt deSantis.

I had whole life insurance with Manulife, a huge insurance company up here in Canada. They told me it would take less than 10 days to close my account, pay out dividends and the last month's payment. It took them 7 weeks to cancel my insurance, pay out the dividends and the last month refund. I asked one of their supervisors what the hell was going on? He told me that there have been so many deaths and insurance claim payouts that they have months of backlog. They have even moved their call centre to the Philippines, which is stupid as all hell, in an effort to put people off and save money.

Take it whatever way you want, but it appears that insurance companies are failing, because of the huge 40%+ increases in excess deaths due to the covid mRNA clot shots and it's going to get worse.

Cheers - Dave

Florida weather is the embodiment of Einsteins definition of insanity.

Looks like insurance companies finally get it and realize insuring ticking time bombs that DO and WILL go off is bad for their bottom line.

I can't believe it's taken this long.

Farmers serves 100,000 customers in Florida but said there will be no impact to customers who use Farmers’ owned subsidiaries like Foremost Signature and Bristol West.

“Such policies will continue to be available to serve the insurance needs of Floridians,” Farmers Insurance spokesperson Trevor Chapman said in a statement."

National insurers don’t have a major presence in Florida, including Farmers, which has barely a 2% share of the state’s insurance market.

“Over the past 18 months in Florida, 15 home insurers have placed moratoriums on writing new business, four carriers have announced plans to voluntarily withdraw from the market and seven companies have been declared insolvent,” Mark Friedlander, a spokesperson for Insurance Information Institute, told CNN. “Currently, there are 18 Florida residential insurers on the state regulator’s watch list due to concerns over their financial health.”

[edition.cnn.com...]

It doesn't look like the insurance business is profitable enough in hurricane-prone Florida.

a reply to: WeDemBoyz

That makes sense. I figuared it was specific towards legislation. Florida may have to change its laws if they don't want to avoid more insurance companys fleeing.

In my line of work, it always tends to be Florida that has some specific state law that makes things hard. Like requiring a jurat form for a notary. And just other little stuff like that. Not sure if that is related, but it gives me the impression that Florida is a legal pain in the arse to deal with.