Farmers Insurance pulls out of Florida, affecting 100,000 policies
Farmers Insurance said Tuesday that it will no longer offer coverage in Florida, ending home, auto and others policies in the state in a move that will affect tens of thousands of residents.
Farmers becomes the fourth major insurer to pull out of Florida in the past year, as the state's insurance market looks increasingly precarious amid a growing threat from extreme weather.
"We have advised the Florida Office of Insurance Regulation of our decision to discontinue offering Farmers-branded auto, home and umbrella policies in the state," Farmers spokesman Trevor Chapman said in a statement to CBS Miami. "This business decision was necessary to effectively manage risk exposure."
Under Florida law, companies are required to give three months' notice to the Office of Insurance Regulation before they tell customers their policies won't be renewed.
Samantha Bequer, a spokeswoman for the Office of Insurance Regulation, told CBS Miami that the agency received a notice Monday from Farmers about exiting Florida. The notice was listed as a "trade secret," so its details were not publicly available Tuesday.
Farmers said the move will affect only company-branded policies, which make up about 30% its policies sold in the state. As a result, nearly 100,000 Florida customers would lose their insurance coverage, according to CBS Miami. Policies sold by subsidiaries Foremost and Bristol West will not be affected.
Farmers has also limited new policies in California, which has seen record-breaking wildfires fueled by climate change. Allstate and State Farm have also stopped issuing new policies in the state.
Insurance costs soar with the mercury
The Florida exodus 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 soar about 40%.
Multiple insurers in the state have gone out of business, faced with massive payouts for storms. Meanwhile, warmer air and water are making hurricanes stronger and more damaging.
Florida Chief Financial Officer Jimmy Patronis, who oversees the insurance regulator, tweeted on Monday that if Farmers pulls out, "My office is going to explore every avenue possible for holding them accountable."