WEST PALM BEACH, Fla. — The announcement by Farmers Insurance that it intends to withdraw from the Florida market has raised questions about what's ahead for policyholders.
"All current customers of Farmers are safe," Mark Friedlander, of the Insurance Information Institute, said. "They are protected for hurricane season."
The reason, he said, is that state regulations require waiting periods before policyholders are told.
"It will be 90 days before they take any action if the plan is approved," he said. "Then they begin the process of non-renewing policies, and that can take over a year to implement because it's based on your individual expiration date."
A spokesman for Farmers said the decision was made to "effectively manage risk exposure."
Weather News
Extreme weather raises need for flood insurance
Tasha Carter, the state's insurance consumer advocate, called the decision "devastating for all Floridians."
Farmers said its other subsidiaries will continue to offer insurance in Florida, representing about 70% of its business in the state.
But for many policyholders, the only option may be to turn to state-run Citizens, which is already growing by about 30,000 new policies a month.
"We've had a precarious Florida property insurance market for many years," Friedlander said. "It's still very volatile in the marketplace. Consumers are having a hard time, No. 1, finding coverage and, No. 2, finding affordable coverage."