Farmers Insurance – Courtesy: Shutterstock – Image by Jonathan Weiss
Tens of thousands of Floridians will be impacted by Farmers Insurance’s decision to discontinue offering coverage in the state on Tuesday, ending house, auto, and other insurance.
The state’s insurance market appears to be getting more insecure as a result of a rising threat from extreme weather, as farmers become the fourth big insurer to leave Florida in the past year.
Farmers spokesman Trevor Chapman issued a statement saying, “We have informed the Florida Office of Insurance Regulation of our decision to suspend marketing Farmers-branded car, house, and umbrella policies in the state. “To manage risk exposure effectively, this business decision was required.”
According to Florida law, businesses must notify the Office of Insurance Regulation three months in advance before notifying clients that their policies will not be renewed, according to CBS Miami.
A warning from Farmers about leaving Florida was received by the Office of Insurance Regulation on Monday, according to Samantha Bequer, a spokeswoman for the office, who talked to CBS Miami. The notice’s specifics were not made public on Tuesday because it was classified as a “trade secret.”
Farmers claimed that only company-branded plans, which account for around 30 percent of its policies sold in the state, will be impacted by the change. Bristol West and Foremost subsidiary’s policies will not be impacted.
According to CBS Miami, as a result, nearly 100,000 Florida insurance plans will expire.
In California, which has experienced record-breaking wildfires fuelled by climate change, farmers have also restricted new policies. State Farm and Allstate no longer offer new coverage in the state.
Costs of insurance rise along with the mercury
The Florida migration is the newest indication that the U.S. insurance market is becoming unstable due to climate change, which is being exacerbated by the burning of fossil fuels. Homeowners’ insurance premiums in the state are already around three times higher than the national average, and they are predicted to increase by about 40 percent this year.
Due to significant disaster payouts, some insurers in the state have closed their doors. In the meantime, stronger and more destructive hurricanes are occurring due to warmer air and sea.
Jimmy Patronis, the chief financial officer for Florida and the person in charge of the insurance regulator, tweeted on Monday that his agency would “explore every avenue available for holding them accountable” if Farmers decided to leave.
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Born and raised in South Florida, Krystal is a recent graduate from the University of Miami with professional writing experience at the collegiate and national news outlet levels. She’s a foodie who loves all things travel, the beach, & visiting new places throughout Florida.