Understanding the Reasons Behind Farmer’s Insurance Leaving the Florida Market

Homeowners throughout Florida are struggling with the reality that insurance costs have as much as tripled over the last few years. In addition, insurance companies are now canceling policies and pulling out of the state, leading to a loss of options for homeowners.
Helping homeowners in Hialeah Gardens, Margate, Homestead, Palmetto Bay, Cutler Bay, Hialeah Gardens, North Miami Beach, Coral Gables, Hialeah, Naples, and Miami, FL, to understand their insurance options is our specialization at Del Toro Insurance. We can help you to find insurance companies if you were left with a cancellation due to Farmers Insurance leaving Florida.

The Decrease in Insurance Providers

Fewer insurance companies to shop is a major blow to homeowners in the Sunshine State. Farmers is the fourth major insurance company to leave Florida. The other three major insurance providers out of the state include Lexington Insurance, which is a part of AIG, Bankers Insurance, and Centauri Insurance. Farmers Insurance reports they will not renew policies for 100,000 homeowners, and no new policies will be written in the state. However, subsidiaries of Farmers, namely Bristol West, Farmers GroupSelect, and Foremost Signature, will continue to provide insurance in the area.

In addition to these larger insurance providers, fourteen additional insurance companies are in liquidation. This creates a decrease in the number of options for homeowners to consider. Those insurance companies still operating in the state are increasing their rates, leading to challenges for homeowners to find affordable coverage.

Farmers Insurance, like the other insurance companies leaving Florida, has very specific reasons for their decision. These reasons all come down to the large payouts over the last few years combined with the increased cost of litigation in the state.

Storm Damage and Intensity

Florida is particularly vulnerable to flooding damage from hurricanes due to its elevation. With the large coastal area and the major cities and population areas on these coasts, the risk of high insurance payouts during storms is a driving factor.

The change in the weather is linked to climate change. Water levels are rising, which adds to the risk of flooding. United Property and Casualty, an insurance company currently in liquidation, reported that of the 292 hurricanes that occurred in the USA between 1851 and 2018, 120 impacted Florida, with thirty-seven identified as Category 3 or higher storms.

Last year, Hurricane Ian resulted in $114 billion in damage adjusted for inflation. This is the third most costly storm ever recorded in the United States.

Increased Lawsuit Numbers

Despite some positive changes for insurance companies around what is seen as insurance litigation abuse, the number of cases filed is also a significant factor in the decision to pull out of the state.

While laws were passed in January of 2023 to limit these types of legal actions, approximately 300,000 cases were filed prior to the law going into effect, leaving insurance companies fighting these cases for potentially years into the future. The number of cases dramatically impacts the smaller companies, but it also has an impact on national insurance companies like Farmers Insurance.

If you need homeowners’ coverage, contact our team at Del Toro Insurance. We are available online or give us a call at (305) 335-8676 to speak to an insurance agent today.

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