Farmers Insurance is the fourth large insurance company pulling out of Florida. However, there are more than a dozen regional insurance companies, which are the largest providers of home insurance in the state, that have also elected not to renew or write home insurance policies. While Farmers Insurance subsidiaries, including the Foremost insurance companies, Bristol West, and Farmers GroupSelect, will continue to write policies in the state, the move will create havoc for over 100,000 homeowners.
The sudden and unexpected actions of Farmers Insurance are a result of a growing problem in the insurance market in the state. This trend has been going on for decades, with insurance companies increasingly concerned about their risk exposure as large claims due to storm damage, issues with litigation, and a major increase in the population, particularly in coastal areas of Florida.
With the hurricane season in the Sunshine State running from June 1st to November 30th, homeowners are facing the need to find insurance during this peak claim season. The escalating intensity and frequency of these storms, including the record payout of $113 billion for Hurricane Ian in 2022, is often identified as a key factor.
Although storms are an issue for risk, many believe the high rate of homeowner policy litigation is the most damaging to insurance companies. Florida is responsible for 79% of all homeowner insurance legal suits, and under the law, insurance companies were required to pay legal fees for consumers, even if they lost the case. While this law changed, over 300,000 suits were filed prior to the new law, and these cases will take years to process.
The result of the actions of both national and regional insurance companies in canceling or failing to renew homeowners’ policies is significant. This is true for both current homeowners and new home buyers.
Current homeowners are facing the difficulty of searching for competitively priced homeowner insurance policies. Many homeowners have seen their policies increase by as much as 40% in a single year, with those on fixed incomes struggling to stay in their homes and provide required insurance coverage.
The decrease in insurance companies writing policies means less competition in the market. With fewer options to consider, homeowners may only have a handful of options to consider. Even with current wind mitigation and 4-point inspections, homeowners may be paying considerably more than they have in the past.
New home buyers are also facing the same challenges. Older homes without additional protection in place, including hurricane clips and hurricane resistant doors and windows, may not be insurable. The cost of upgrades to the levels required by insurance companies can be cost prohibitive.
Del Toro Insurance offers support for homeowners throughout Hialeah Gardens, Margate, Homestead, Palmetto Bay, Cutler Bay, Hialeah Gardens, North Miami Beach, Coral Gables, Hialeah, Naples, and Miami, FL. Our goal is to find the optimal homeowners insurance to replace policies canceled and provide you with peace of mind that your home is protected.
To talk to an agent about your insurance needs call us today at 305-335-8676 or send us a message online.
There are a number of factors that have made offering homeowners insurance too risky for insurance companies like Farmers. They include higher litigation costs, increased claims, increased multi-billion dollar storms, and an increase in the number of storms that hit the state.
The cancellation of over 100,000 homeowner policies has added to the struggle for homeowners to find affordable insurance coverage. At the same time, more than 14 regional insurance companies have stopped writing policies or are in liquidation due to high payouts over the last few years.
Those seeking residential or commercial property insurance throughout Florida have fewer options in policies, which impacts the ability to find affordable insurance rates. As companies continue to increase the cost of coverage, more homeowners are determining if staying in the state is a possibility.
Contact Del Toro Insurance and talk to an insurance agent. In addition, have a current wind mitigation and 4-point inspection of the home to help reduce the cost of insurance and speed up the process.
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