Farmers Insurance announced Wednesday that it will stop offering its policies in Florida, including home, auto and umbrella policies. The move will force thousands of people to change their insurance provider.
Farmers serves 100,000 customers in Florida but said in a statement that leaving the state was a business decision necessary to manage its risk exposure in the hurricane-prone region.
Farmers said there will be no impact to customers who use Farmers’ owned subsidiaries like Foremost Signature and Bristol West.
“Such policies will continue to be available to serve the insurance needs of Floridians,” Farmers Insurance spokesperson Trevor Chapman said in a statement, according to CNN. “Affected customers will receive notifications detailing when their coverage will end and will be advised of options for replacement coverage.”
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National insurers don’t have a major presence in Florida, including Farmers, which has barely a 2% share of the state’s insurance market.
“Over the past 18 months in Florida, 15 home insurers have placed moratoriums on writing new business, four carriers have announced plans to voluntarily withdraw from the market and seven companies have been declared insolvent,” said Mark Friedlander, a spokesperson for Insurance Information Institute.
In addition to extreme weather, CNN noted, Florida insurers point to a legal system it says promoted litigation abuse and excess claims.
“This is a man-made crisis,” Friedlander previously told the news network.
