Farmers Insurance exits Florida while Citizens Insurance adds 5,500 policies

Flooded campers are seen at the Peace River Campground in the aftermath of Hurricane Ian in Arcadia, FL (DeSoto County), Monday, Oct. 3, 2022. (AP Photo/Gerald Herbert)

By Jim Saunders and Jim Turner ©2023 The News Service of Florida

TALLAHASSEE — The Florida insurance market took a hit Tuesday, as Farmers Insurance said it will end residential, auto and umbrella policies in the state, forcing tens of thousands of customers to look elsewhere for coverage.

The company said the move will affect only Farmers-branded policies and will not affect policies sold in the state by subsidiaries Foremost and Bristol West. It indicated the Farmers-branded policies make up about 30 percent of the policies sold by the affiliated companies in Florida.

“We have advised the Florida Office of Insurance Regulation of our decision to discontinue offering Farmers-branded auto, home and umbrella policies in the state,” Farmers spokesman Trevor Chapman said in a prepared statement. “This business decision was necessary to effectively manage risk exposure. Farmers offers insurance through several different brands, and this decision applies only to policies issued through our exclusive agency distribution channel.”

Farmers will not write new policies or renew existing policies. The non-renewals will play out over several months.

It was not immediately clear Tuesday how much of an impact the Farmers move will have on Florida’s troubled property-insurance market, where insurers have dropped hundreds of thousands of policies and raised rates during the past two years.

A source told The News Service of Florida that about 100,000 Farmers policies across the residential, auto and umbrella lines of business could be affected, though a breakdown by policy type was not available.

A state report indicated that, as of Dec. 31, Farmers Casualty Insurance Co. had 5,835 residential policies. By comparison, Foremost Insurance Co. and Foremost Property and Casualty Insurance Co. combined for nearly 62,500 residential policies, according to the report.

Bristol West sells auto insurance.

Saying he had heard rumors that Farmers might pull out of Florida, state Chief Financial Officer Jimmy Patronis on Monday blasted the company.

“If that’s true my office is going to explore every avenue possible for holding them accountable,” Patronis said in a Twitter post. “Don’t get to leave after taking policyholder money. Can’t write auto if you’re not doing homeowners either.”

That drew a retort from Rep. Hilary Cassel, D-Dania Beach, an attorney who represents policyholders in lawsuits against insurers.

“The only time your office has held an insurance company accountable is when you’re looking to collect a campaign check,” Cassel tweeted.

Samantha Bequer, a spokeswoman for the Office of Insurance Regulation, said in an email that the agency received a notice Monday from Farmers about exiting the market. The notice was listed as a “trade secret,” so its details were not publicly available Tuesday.

State law requires Farmers to give 90 days’ notice to the office before it can inform customers that policies will not be renewed.

Farmers also is limiting homeowners coverage in California, according to numerous recent media reports.

Citizens adds 5,500 policies

Meanwhile, The state-backed Citizens Property Insurance Corp. added more than 5,500 policies last week, continuing three years of rapid growth.

Citizens totaled 1,322,696 policies as of Friday, up from 1,317,175 policies a week earlier, according to data posted on its website.

As an illustration of the growth, Citizens had 474,630 policies on June 30, 2020; 638,263 policies on June 30, 2021; and 931,357 policies on June 30, 2022.

Citizens, which was created as an insurer of last resort, has become the largest property insurer in the state as private companies like Farmers have dropped customers and raised rates because of financial problems.

Florida House Democratic Leader Fentrice Driskell responds

In an email statement on Wednesday, Florida House Democratic Leader Fentrice Driskell (D-Tampa) wrote:

“Farmers Insurance leaving the state is a clear indication that nothing the Florida Republicans have done has solved the insurance crisis facing us. Instead of providing real relief and a strong market, insurance companies got $3 billion of our tax dollars as reinsurance aid, and a new law making it harder to hold them accountable in court. 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.

“Floridians have been telling us this is one of their main concerns for a while now, and they need solutions, not culture war distractions Florida Republicans continue to prioritize. Florida House Democrats proposed House Bill 1477 just this past Legislative Session because it contained commonsense solutions that benefits homeowners while stabilizing the insurance market. We believe every Floridian deserves the freedom to be healthy, prosperous, and safe, and we will continue to fight for legislation that does just that.”

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