Some AAA clients in Florida will not have their automobile and homeowner’s insurance policies renewed.
AAA declined to specify the number of customers whose policies will not be renewed, stating only that “a small percentage” of policyholders will be affected.
Farmers Insurance recently announced that it will discontinue offer coverage in the state, which will affect approximately 100,000 customers.
Farmers specified that only company-branded policies, which represent approximately thirty percent of the insurance policies sold in the state of California, will be affected.
Last year, Bankers Insurance and Lexington Insurance, subsidiaries of AIG, left Florida, claiming that recent natural calamities have rendered it too expensive to insure residents. Hurricanes Ian and Nicole ravaged Florida in 2022, inflicting billions of dollars in damages and murdering a total of about 150 people.
Before informing policyholders that their policies will not be renewed, companies are required by Florida law to give the Office of Insurance Regulation three months’ notice.
Insurance Companies Are Leaving Florida
With rates anticipated to increase by approximately 40% this year, homeowners in the state already pay about three times as much for insurance protection as the national average.
Despite the December passage of legislation intended to stabilize the market, insurance companies are fleeing Florida.
In 2018, Gov. Ron DeSantis signed a bill that, among other provisions, establishes a $1 billion reinsurance fund and discourages frivolous litigation. In October, the law shall come into effect.
AIG, Allstate, and State Farm have ceased accepting new customers in California, citing rising costs associated with underwriting policies as a result of the state’s wildfires.
According to scientists, climate change has caused the West to become warmer and drier over the past three decades, and will continue to make the weather more extreme and wildfires more destructive.
California has more residences at risk for intense wildfire than any other state, with more than 1.2 million, according to data gathered by the industry-supported Insurance Information Institute.
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Source: CBS