After announcing it would halt sales of new homeowners policies in Florida, Farmers Insurance said the decision would only impact 30 percent of coverage currently in force for Floridians.
“Farmers offers insurance through several different brands, and this decision applies only to policies issued through our exclusive agency distribution channel,” said Farmers Spokesperson Trevor Chapman.
As previously reported in the Florida Record, Farmers blamed historically high catastrophe costs and rising reconstruction costs on their decision to withdraw from Florida as hurricane season looms.
“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,” Chapman told the Florida Record. “This business decision was necessary to effectively manage risk exposure.”
Farmers will continue to write business in the state through their subsidiary companies and independent agents as opposed to captive agents.
Captive agents are Farmers-branded agents who exclusively just write Farmer's policies.
“There is no impact to 70 percent of policies currently in force for customers in the state, including Bristol West®, Foremost SignatureSM, Farmers GroupSelectSM, Foremost Choice® and Foremost®-branded policies,” Chapman said in an emailed statement. “Such policies will continue to be available to serve the insurance needs of Floridians.”
Floridians pay $6,000 a year on average for home insurance compared to the U.S. average of $1,700, which is 3.5 half times as much, according to Insurance Information Institute data.
Year over year, Florida homeowners are paying 40% more on coverage in 2023 than a year ago.
“Affected customers will receive notifications detailing when their coverage will end and will be advised of options for replacement coverage,” Chapman added.
Farmers is under 2% of the insurance market share compared to the top three insurers in Florida, according to Mark Friedlander, III's director of corporate communications.
At year-end of 2022, Citizens had 15.6% of market share, South Florida’s Universal Property and Casualty Corporation had 10%, and State Farm had 6.7%.
“It’s a mixed bag, but overall conditions are, still in our determination, very volatile,” Friedlander told the Florida Record. “We've talked to insurance agents across the state who tell us it's the worst market they've seen in decades. These are agents on the ground representing consumers and selling insurance policies every day. This is their job and when insurance agents tell us this is the worst market they've seen in decades, we don't question that.”
The Florida Office of Insurance Regulation did not respond to requests for comment.