Farmers Insurance has made the decision to cease offering insurance in Florida. According to CNN, the national insurer will be cancelling 100,000 policies in the state just in time for hurricane season, including both home and automotive policies. This will leave many Florida drivers without auto insurance at a critical time and force them to seek coverage elsewhere.
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The state of Florida requires insurance agencies to notify policyholders 120 days in advance of cancelling their coverage, but the impact on ongoing claims is unclear. Farmers has referred to this decision as a “business decision,” stating that the company is looking to manage its risk exposure in a state prone to hurricanes. Farmers’ smaller insurance subsidiaries, such as Foremost Signature and Bristol West, will continue to provide auto insurance in Florida.
However, it is interesting how this “business decision” did not apply when the company initially decided to accept premiums for policies in Florida. It appears that corporations, if considered people, are able to change their minds or rescind such decisions without regard for the negative impact on thousands of customers who were fulfilling their end of the agreement.
Farmers is not the only major insurer withdrawing from Florida, nor is it the only insurer trying to decrease its presence in the state. As reported by CNN, several major insurance companies have voluntarily pulled out of Florida following the devastating storms of last year. Hurricane Ian caused $114 billion in damage, making it the costliest storm in the state’s history, according to CNN and the National Oceanic and Atmospheric Administration.
In the 18 months since Hurricane Ian hit Florida, 15 companies have declined to insure homes in the state, and four insurance carriers have completely exited. While this “business decision” is understandable, it serves as a reminder that insurance companies, whether home or auto, will always prioritize their profits over their risks when it comes to insuring large areas and states. According to NOAA, the upcoming hurricane season is predicted to be “normal,” with a 30% chance of it being above normal and a 30% chance of fewer hurricanes. Therefore, it is possible that those left without car insurance may not actually need it, but it is always better to err on the side of caution.
