Farmers Insurance Group has announced its plan to exit the Florida market in the US due to the growing risks posed by climate change.
The move is estimated to affect nearly 100,000 policies across various lines of business, including residential, auto and umbrella, reported CBS News Miami.
It has made the company the fourth major insurer to end coverage in Florida in the last year amid the state’s insurance sector reeling under challenging environments following extreme weather events.
According to Farmers, the move will impact only its own plans and will exclude policies offered by its subsidiaries Foremost and Bristol West.
Farmers Insurance-branded policies represent 30% of the policies sold by its affiliates in Florida.
The company has decided not to issue new policies or renew existing policies upon expiration.
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In a statement seen by CBS News Miami, Farmers Insurance spokesman Trevor Chapman said: “We have advised the Florida Office of Insurance Regulation of our decision to discontinue offering Farmers-branded auto, home and umbrella policies in the state.
“This business decision was necessary to effectively manage risk exposure.
“Farmers offers insurance through several different brands, and this decision applies only to policies issued through our exclusive agency distribution channel.”
The exact impact of Farmers Insurance’s withdrawal from Florida is yet to be ascertained
The state’s property insurance market is impacted as many insurers have scrapped hundreds of thousands of policies and increased rates over the last two years.
In a letter to Farmers Insurance, Florida Insurance Commissioner Michael Yaworsky expressed the state’s concerns on the process of communicating the move by the company and was “troubled by how this decision may have cascading impacts to policyholders”, reported the Washington Post.