Florida has recently become a popular destination for people moving from other states, but as the population has grown, so has the typical cost of homeowners insurance premiums.
Farmers Insurance announced earlier this week that it would stop offering a number of home, auto, and umbrella insurance in the region due to the need to “effectively manage risk exposure.”
Even as politicians pursue dramatic action to stabilize the market, the move is expected to worsen the already turbulent Florida homes insurance market.
The majority of the policies that are currently in effect for clients in the state—including Bristol West, Foremost Signature, Farmers GroupSelect, Foremost Choice, and policies bearing the Foremost brand—are unaffected.
These policies will remain accessible to meet Floridians’ insurance needs. Customers who are impacted will be notified when their coverage expires and informed of their options for replacement coverage, he said.
The cancellation of Farmers Insurance coverage is the most recent hiccup for a volatile market for homes insurance that is unlikely to stabilize anytime soon.
Root Cause Of Florida’s Home Insurance Crisis
The huge increase in home insurance premiums, according to Mark Friedlander, director of corporate relations for the Insurance Information Institute, is unique to the Sunshine State and not brought on by the risk of storms.
Yes, Florida is more vulnerable to hurricanes than any other state, making it a high-risk state as a result. However, no other state is as vulnerable to man-made elements as Florida is.
Friedlander told the Washington Examiner, “Yes, there are fraud issues in other places and there are some legal system issues there, but nothing like Florida.
The crisis is the result of excessive insurance claim litigation in Florida, which has been made possible by long-standing legal frameworks there.
Friedlander claims that seven regional insurers in the Sunshine State have filed for bankruptcy during the past 18 months as a result of the excessive litigation.