Over 2,900 properties will be losing coverage across the state.
Farmers Insurance has announced that it will be allowing the policies for over 2,900 properties between Baldwin and Mobile counties in Alabama to expire, as they are considered to be rentals.
The insurer also announced that there would be statewide increases to its rates.
Some areas in Alabama will be experiencing increases to their Farmers Insurance rates that are as high as 35 percent. Equally, some policyholders will find that their own premiums will be falling.
All told, there will be about 60,000 Farmers Insurance customers that will see some kind of change.
This, according to Luis Sahagun, a spokesperson for Farmers Insurance. He said that most of the people affected by the changes will be facing increases. This does, however, depend on the type of policy they hold. Sahagun explained that the reason for these changes is that the insurer is attempting to “address the continued volatility and severity of homeowners insurance claims in Alabama.”
A spokesperson for the Alabama Department of Insurance, Ragan Ingram, said that the state feels confident that the insurer was able to justify the rate increases that it proposed.
The result, says deputy commissioner of the state insurance department, Charles Angell, is that starting on December 1, 2012, Farmers Insurance will no longer be renewing the wind coverage that it has been providing for 957 policies for landlords. Another 1,980 policies will not be renewed as those properties are seen as rentals at least part of the year.
Currently, Farmers Insurance Exchanges have said that the number of policies about to expire – around 2,900, represents approximately 15 percent of all of the policyholders within that part of the state. The company is a unit of the Zurich Insurance Group out of Switzerland.
Farmers Insurance currently has about 7 percent of the total coverage market in Alabama and has said that the customers who will be impacted by these changes will receive a non-renewal notice regarding their current coverage and will be offered a similar alternative policy that does not include coverage for damage caused by wind.
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