Gov. Ron DeSantis’ office confirmed that State Farm Insurance plans to continue its presence in the Florida insurance marketplace after Farmers Insurance declared plans to leave the state.
Source: Florida Voice | Published on July 18, 2023
Gov. Ron DeSantis’ office confirmed that State Farm Insurance plans to continue its presence in the Florida insurance marketplace after Farmers Insurance declared plans to leave the state.
State Farm spokesperson Roszell Gadson told NewsNation in a statement that the company plans to commit to “responsible growth” to “deliver promises” to customers.
We are encouraged by the recent insurance reforms and efforts to curb legal system abuse and we will continue to work constructively with the Florida Legislature and the Office of Insurance Regulation to improve the marketplace on behalf of our Florida customers,” Gadson said.
Farmers Insurance reportedly announcedthis week its plans to pull out of certain home policies in Florida, citing “concerns of extreme weather and hurricanes as a major risk in the property insurance market.”
Last week, the insurance company informedthe state that they would be “pulling several home, auto, and umbrella policies out of Florida.” The move is expected to impact 100,000 policy holders.
DeSantis was asked about what is being done to address the unstable insurance market in Florida during an interview onThe Howie Carr ShowWednesday.
The governor said the insurance crisis had been a decade-long issues before he was governor, highlighting how previous storms caused companies to leave the market.
Housing insurance carriers leaving the market have led to skyrocketing prices, which lawmakers have passed legislation in an attempt to address during regular and special sessions within about a year.
The state legislature has attempted tocombatthe rising premiums and costs by implementing insurer-friendly policies that are meant to incentivize companies to stay and do business with Florida residents.Part of the legislationincluded eliminating one-way attorney fees in an effort to get rid of those “frivolous” lawsuits.
“What’s going to happen is because we did those reforms, it now is more economical for companies to come in,” DeSantis said. “I think they’re going to wait through this hurricane season and then I think they’re going to be willing to deploy more capital to Florida.”
The governor noted that Florida has a “challenging market” following borderline category 5 Hurricane Ian in 2022 being one of the “costliest storms in recent history.”
“I think we’ve had problems with our legal infrastructure that we have addressed,” he said. “We did a big reform with that and the My Safe Florida Home Program, so knock on wood we won’t have a big storm this summer. Then I think you’re going to start to see companies see an advantage.”
Following Farmers Insurance’s announcement, Florida House Democrat Leader Fentrice Driskell, D-Tampa, said it shows Republicans’ efforts have not solved the insurance crisis.
“Instead of providing real relief and a strong market,insurancecompanies got $3 billion of our tax dollars as reinsurance aid, and a new law making it harder to hold them accountable in court,” Driskell said. “Policy holders will now scramble to find a company that will cover them, and I doubt many families will end up paying less than before. Despite the promises, we’re moving in the wrong direction.”
However, House Speaker Paul Renner, R-Palm Coast,said the company’s decision to pull out was not based on the impacts of recent reforms to stabilize the state’s insurance market, “but the company’s financials.”
Renner said while the reforms will “take time to take effect,” he believes they “put the right systems in place to strengthen our insurance market and provide Floridians with the access to coverage and peace of mind they need for their property.”
FAQs
State Farm Insurance said this week that it is sticking with Florida and sees more opportunity there, thanks to the state's recent reforms for the industry, issuing a statement on the matter days after competitor Farmers Insurance became the latest insurer to reduce coverage in the state.
Why did State Farm pull out of Florida? ›
In a statement shared earlier this week with NewsNation partner The Hill, Farmers confirmed it planned to end coverage in the Sunshine State, saying, “This business decision was necessary to effectively manage risk exposure.” The insurer will also curtail new homeowners' insurance policies in California, due to “record ...
Why is farmers insurance pulling out of Florida? ›
Farmers Insurance announced in July the company will be withdrawing from the Florida insurance market due to the level of insurance risk posed in the state. Farmers said only Farmers-branded insurance products are being ended in Florida, which account for roughly 100,000 auto, home and umbrella policies.
Why are insurance companies pulling out of the state of Florida? ›
In simple terms, insurance companies are leaving Florida because it's best for their bottom line. When an insurance company is paying out more in claims than it's taking in, they run the risk of not being able to pay out any claims at all.
Is Farm Bureau pulling out of Florida? ›
Florida Farm Bureau Insurance, a 50-year-old organization, recently sent a five-point action plan to its agents across the state, saying the company would stop writing new homeowners and dwelling-fire policies starting Feb. 1.
Why is State Farm getting out of the banking business? ›
As to why: "State Farm is focused on serving more customers in more ways and sometimes that means doing things differently than we have in the past. State Farm has made the decision to offer customers banking products and services through alliances rather than State Farm Bank," said Roszell Gadson.
What states is State Farm pulling out of? ›
Starting in July 2024, State Farm will stop insuring more than 30,000 residential homes in California, and starting in August, will discontinue coverage on 42,000 commercial apartment properties.
Are insurance companies in Florida going out of business? ›
(Bloomberg) -- Seven property insurers in Florida went bankrupt in 2021 and 2022. The bankruptcies left thousands of homeowners scrambling to get new coverage, which often came with a big increase in cost. Worse, many had outstanding claims for hurricane damage that had not been addressed.
What is going on with the insurance industry in Florida? ›
As of last week, Citizens had nearly 1.19 million policies. State officials this spring have touted improvements in the market. As an example, the Florida Office of Insurance Regulation this month said at least eight carriers had filed for rate decreases in 2024, while 10 had filed to keep rates flat.
Is Farmers Insurance in financial trouble? ›
We now believe Farmers' capital adequacy to remain comfortably at '99.50%' stress level, which is further supported by the expected improvement in the underwriting performance, risk exposure reduction in certain catastrophe prone states, and higher investment income.
Newsweek: "Florida Could Soon Become Uninsurable—and Other States Will Likely Follow" RFF Fellow Penny Liao is quoted several times in an article about the increasing risks of insuring properties that often face the brunt of climate-related disasters.
What insurance companies are backing out of Florida? ›
Three major companies have voluntarily withdrawn from the state since last year: Farmers Insurance, Bankers Insurance and Lexington Insurance, a subsidiary of AIG.
Is USAA leaving Florida? ›
USAA will continue to provide auto insurance, life insurance, banking, and investment products to its members in Florida, as long as the state permits it to do so.
Will State Farm pull out of Florida? ›
State Farm Insurance said this week that it is sticking with Florida and sees more opportunity there, thanks to the state's recent reforms for the industry, issuing a statement on the matter days after competitor Farmers Insurance became the latest insurer to reduce coverage in the state.
Why are farmers leaving Florida? ›
The company said in a statement that its decision to get out of Florida was a business decision necessary to manage its risk exposure in the hurricane-prone state.
Who has the cheapest homeowners insurance in Florida? ›
Cheapest home insurance companies in Florida
Tower Hill is the cheapest homeowners insurance company in Florida, offering an average rate of $2,443 a year. Not only is Tower Hill's average rate the lowest in the state by far, but it's more than 40% cheaper than the state's average price for home insurance.
Is State Farm good insurance in Florida? ›
In business since 1922, State Farm is the largest U.S. auto insurance company, with a 16.84% market share in 2022, according to the National Association of Insurance Commissioners (NAIC). It consistently earns high ratings for its financial strength — A++ overall from AM Best (an A- in its Florida branch).
What insurance companies have left Florida? ›
Farmers Insurance is now among Bankers Insurance, Centauri Insurance and Lexington Insurance, a subsidiary of AIG, in withdrawing from the Florida market since last year. The Florida Department of Financial Services website lists 14 companies that are currently in liquidation in the receivership process.
Is Progressive pulling out of Florida? ›
Last fall Progressive confirmed to ABC Action News that they will not renew policies in Florida beginning in May of 2024 to "rebalance our exposure" they told us in a statement.
Is State Farm writing homeowners insurance in FL? ›
Other national carriers, such as Allstate, Nationwide and State Farm, write policies in Florida through another resource, according to John Espenschied, owner of Insurance Brokers Group.
