A number of insurance providers have left Florida over the last year, apparently driven away thanks to extreme weather and a challenging legal landscape.

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Amid a growing insurance crisis for the Sunshine State, industry giant Farmers Insurance Group announced this week that it will no longer issue new policies in Florida, nor will it renew existing policies.

Farmers confirmed the move in a statement to Inman Wednesday, with spokesperson Trevor Chapman saying the company will stop offering home, auto and umbrella policies in the state. The decision “was necessary to effectively manage risk exposure,” Chapman continued.

While the statement did not mention how many people might lose coverage, the Orlando Sentinel reported that about 100,000 policyholders in Florida will now have to provide new insurance providers.

Farmers operates multiple subsidiaries in Florida as well, but those companies will continue to provide coverage in the state, Chapman said.

The move is just the latest instance of an insurance company pulling out of Florida. Others include United Property Casualty and Insurance Co., which quit the state last August on the eve of hurricane season, as well as Bankers Insurance, Centauri Insurance and Lexington Insurance.

Mark Friedlander, a spokesperson for Insurance Information Institute, told CNN Wednesday that “15 home insurers have placed moratoriums on writing new business, four carriers have announced plans to voluntarily withdraw from the market and seven companies have been declared insolvent.”

Mark Friedlander

Friedlander described the situation as a “man-made crisis,” pointing to Florida’s legal system as one reason companies are leaving the state. Florida insurance companies also have to deal with extreme weather, such as hurricanes, which routinely devastate the region’s housing stock and force providers to make big payouts.

Florida is not the only state dealing with a shrinking insurance market; earlier this year State Farm exited California, citing inflation, construction costs and intensifying wildfire seasons. But Florida’s situation is particularly sweeping, with one local agent in the city of Coconut Creek saying last summer that the state’s insurance landscape was in a state of “collapse.”

According to the Sentinel, lawmakers have attempted multiple reforms to Florida’s insurance landscape in recent years. Those reforms have included company bailouts and legal reforms. However, since Gov. Ron DeSantis took office in 2019, average annual rates have risen to nearly three times the U.S. average, the Sentinel reported.

Jimmy Patronis

If and how Florida can stem the tide of insurance companies leaving the state remains to be seen. However, Florida Chief Financial Officer Jimmy Patronis has indicated he plans to hold the company “accountable.” In a statement Tuesday, Patronis said that means he wants “additional scrutiny” and a “deeper dive” into complaints against Farmers.

He also suggested the company could face fines and is “on its way to becoming the Bud Light of insurance” — an apparent reference to the beer brand’s financial struggles after a brief partnership with a transgender influencer.

“After everything the Florida Legislature has done to assist insurance companies from slowing the bleed, and then to have Farmers communicate their intentions in such a ham-handed manner,” Patronis also said in the statement, “company leadership needs to get ready, because my guess is they’re about to get hauled before the Legislature to answer for their actions when the next legislative session begins.

“The more we learn about Farmers Insurance the more it’s clear its leadership doesn’t know what they’re doing.”

Email Jim Dalrymple II

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