Farmers Insurance pulls out of Florida, drops 100,000 policies

TALLAHASSEE — Farmers Insurance Group announced Tuesday that it would no longer write new policies or renew existing homeowner, auto and umbrella policies, affecting about 100,000 customers, a day after Florida Chief Financial Officer Jimmy Patronis threatened to take action if it did.

“Hearing rumors @WeAreFarmers might pull out of Florida,” Patronis tweeted Monday afternoon. “If that’s true my office is going to explore every avenue possible for holding them accountable. Don’t get to leave after taking policyholder money.”

A spokesman for Patronis declined to explain what action he would take to hold the agency accountable, directing all questions to the Office of Insurance Regulation, which Patronis oversees as CFO.

The state agency on Tuesday received a “market reduction notice from Farmers Insurance Group,” communications director Samantha Bequer said in an email to the Orlando Sentinel. “OIR is reviewing the notice in accordance with applicable Florida Statutes.”

She said she couldn’t provide any further information because the notice was marked as a trade secret, and such information is exempt from Florida public records laws.

“This business decision was necessary to effectively manage risk exposure,” Farmers spokesman Trevor Chapman said.

It affects about 100,000 policyholders under one of the Farmers’ lines. It will have no impact on the other 70% of policies currently in force in Florida covered under its other brands, he said.

“Affected customers will receive notifications detailing when their coverage will end and will be advised of options for replacement coverage,” Chapman said.

Florida law requires an insurer to give the state 90 days’ notice in writing if it plans to stop writing insurance or cancel 10,000 or more homeowner policies within 12 months. The insurer must also provide a reason that is permitted under state law before sending out nonrenewal notices to customers.

The company announced in June it would no longer write new policies in Florida.

It’s the first time Patronis has called out a specific insurance company for leaving the state after 10 others have already departed in the midst of the state’s relentless insurance crisis, which has caused premiums to skyrocket by 100% or more in some cases. Property owners are bracing for a 40% increase this year.

“My first reaction was I almost laughed out loud,” state Rep. Anna Eskamani said upon hearing about Patronis’ tweet. “It is literally your job to create a robust market for consumers. You have insurance regulation under your belt. It is absurd to take to Twitter to punish an insurance company.”

Insurance companies have stopped writing policies, dropped customers and left the state outright after receiving $3 billion in taxpayer-provided reinsurance aid to shore up the market. Reinsurance is a critical part of the insurance market that companies buy to protect them from huge payouts for hurricanes and other catastrophes.

DeSantis also signed a bill taking away homeowners’ rights to recover attorney fees when they prevail, under the premise that the number of lawsuits filed against insurance companies has contributed to the cost of doing business in hurricane-prone Florida.

Each time the Legislature passed a new reform, lawmakers said the changes would take 18-24 months to trickle down to homeowners. But the changes have had zero impact on lowering rates at least so far.

Since DeSantis was first sworn in as governor in 2019, property insurance rates have ballooned to an average of $4,231, nearly triple the national average of $1,544.

A Florida Watch report published in cooperation with the American Federation of Teachers showed that DeSantis collected nearly $4 million in campaign donations from insurance companies. Since he was inaugurated in January 2019, the industry has donated $9.9 million to legislators, the report said.

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Patronis received $2.2 million from insurance companies, the Palm Beach Post reported.

The rate increases coupled with escalating housing prices and rising replacement costs have contributed to a 9% inflation rate in the Miami-Fort Lauderdale-West Palm Beach region, the highest rate in the nation among urban areas with more than 2.5 million people, CNN reported Tuesday. The Tampa Bay area was third in the nation with an inflation rate of 7.3%, CNN said.

The national rate of inflation is 4%.

The Legislature attempted three times, including during two special sessions, to reform the market through a series of financial bailouts, legal reforms and some consumer protection measures that did more to protect the insurance companies than consumers.

Some of that legislation “treated the flu when the patient had stage four cancer,” former Republican State Sen. Jeff Brandes said.

Critics said DeSantis and the Legislature should have fixed the insurance crisis instead of spending time passing anti-woke, anti-LGBTQ legislation.

“We gave insurance companies everything they wanted and they’re still leaving,”  Eskamani said. “It is time to listen to the Democrats whose ideas were either ruled out of order or voted to dismiss. We need to support families that can’t afford to live in Florida.”

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