Farmers will no longer offer coverage in Florida, ending auto, home, and other policies in the state, with the decision set to impact an estimated 100,000 policyholders.
The organisation notified the Florida Office of Insurance Regulation (OIR) of its decision. Insurers must give the office 90 days’ notice if they want to discontinue writing business in Florida.
Farmers will stop offering ‘Farmers-branded’ auto, home, and umbrella policies in the state as of July 11, 2023, and to implement a process to stop renewals of existing ‘Farmers-branded’ policies.
According to the announcement, the move will affect only company-branded policies, which make up about 30% of its policies sold in the state. Policies sold by subsidiaries Foremost and Bristol West will not be affected.
A Farmers spokesman said: “This decision came after several months of rigorous work and analysis to try to find alternative solutions to manage risk in Florida.
“Ultimately, we were faced with making the difficult decision to withdraw our Farmers-branded products from the state.”
Adding: “We recognize this transition won’t be easy, and we’re committed to supporting agency owners as they look for their next opportunities.”
Farmers has become the fourth major insurer to pull out of Florida in the past year, joining Centauri Insurance and Lexington Insurance, a subsidiary of AIG.
The Sunshine State is not the only state the insurance agency has exited the market. In May the company stopped accepting applications for business and personal lines and casualty insurance in California.
Farmers’ decision apparently caught top state regulators off guard who complained about the insurer’s actions.
In a letter to a Farmers executive on Tuesday, Florida Insurance Commissioner Michael Yaworsky expressed his disappointment regarding how this decision was communicated.
“While the office recognizes companies need to make operational changes to books of business, [the Office of Insurance Regulation] always appreciates the opportunity to discuss these complex issues prior to receiving notifications of this nature, ” he said.
Yaworsky added: “We are disappointed by the hastiness in this decision and troubled by how this decision may have cascading impacts to policyholders.”
