The insurer announced that it is no longer writing new policies just as the hurricane season started.
The Atlantic Hurricane Season has only just started this month, but along with it has come the announcement that Farmers Insurance Group has decided to stop selling property policies in the state.
The insurer’s existing customers will still be able to keep their coverage, but new policies won’t be sold.
At this time of year, many homeowners are taking the time for a last moment scramble to make sure they have the coverage they need as the risk of severe weather increases. When looking at the storms over the last few years, it has become clear that coverage is not something to be taken lightly.
However, in the Florida market, that is already reaching a crisis point, there is now one less option available to consumers, as Farmers Insurance Group has determined that it is no longer feasible for them to continue selling.
“Over the past 18 months in Florida, we’ve had 15 companies decide to stop writing new business,” said Mark Friedlander of the Insurance Information Institute (III). Friedlander added that Florida property owners have been watching their options crumbling as insurers choose to pause their selling, leave the state altogether, or find themselves in receivership.
Farmers Insurance Group is the next among insurers to find itself on that growing list in Florida.
“With catastrophe costs at historically high levels and reconstruction costs continuing to climb, we implemented a pause on writing new homeowners policies to more effectively manage our risk exposure,” read a statement from the insurer.
At the time of the writing of this article, the option remained on the Farmers Insurance Group website to enter a ZIP and request a quote for Florida, but ZIPs tested by Live Insurance News received only a message reading: “Sorry, we don’t offer insurance in your area.”
“The cost of claims for catastrophes is higher than ever before. And we saw this here in Florida play out last year, with Hurricane Ian, we estimate it to be a $60 billion insured loss event,” explained Friedlander.
Beyond that, III data shows that there has been a 55 percent increase in the cost of home replacement in the last three years – a rate notably higher than inflation.
