Farmers Insurance’s decision to stop writing new policies and not renew existing ones in Florida is adding fuel to the property insurance fire in the state. Though Farmers isn’t a major player in the state’s insurance market, the move could be indicative of more to come. About 100,000 policies in Florida are affected.
Mark Friedlander, director of the Insurance Information Institute said 18 residential insurers are on the state insurance regulators watch list, including two that are under enhanced monitoring. Friedlander declined to name those companies.
To date, 7 insurers have declared insolvency since February 2022. 14 are in liquidation, including United Property & Casualty Insurance Company. St. Petersburg-based United Property & Casualty, which was ordered into receivership this past February, had about 135,000 policies in Florida.
15 insurers have stopped writing new business in Florida since January of last year, Freidlander said. Those insurers, which he also declined to identify, are still operating and 3 companies have announced voluntary withdrawals in Florida since last year: Bankers Insurance Group, surplus lines insurer and AIG subsidiary Lexington Insurance Company, and Farmers.
Insurance companies that are still writing policies are increasing their premiums significantly while providing less coverage.
The citizens of Florida were promised that the new legislation passed this year should push carriers to become more competitive. However, the reality is, Florida consumers will likely see no real change for at least the next two to three years and that time frame will be extended if Florida gets hit by a storm this season.
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