The company is the fourth insurance firm to pull out of the Florida market in the past year, leaving homeowners scrambling for solutions in the state with the highest property insurance premiums in the United States.
Farmers Insurance has joined a growing number of insurance companies fleeing Florida, a decision that is expected to affect 100,000 homeowners across a state threatened by intensifying storms every year during the Atlantic Hurricane Season.
The company announced this week that it would stop taking on new customers in Florida and will not renew its existing “Farmers-branded” car, home and umbrella policies in the state. On Monday, Farmers informed the Florida Office of Insurance Regulation of its plans. Under Florida law, insurers must give the office 90 days’ notice if they plan to stop offering services in Florida.
The decision was driven by business costs impacted by hurricane rebuilding and recovery, the company said in a statement. Farmers said that policies sold by subsidiaries Foremost and Bristol West will not be affected.
Farmers is now fourth insurance firm to pull out of the Florida market in the past year, suggesting efforts from Gov. Ron DeSantis and the legislature to stabilize the insurance markets have failed. The company follows Bankers Insurance, Centauri Insurance and Lexington Insurance, a subsidiary of AIG, in withdrawing from the market.
How Ron DeSantis Sold Out Florida Homeowners
The growing exodus of insurers from Florida comes as the cost of home insurance premiums for customers has also skyrocketed. Homeowners are now paying about $6,000 per year on average for their home insurance premiums.
Makr Friedlander, spokesperson for the Insurance Information Institute, told USA Today that this represents a massive 42% increase over last year. By comparison, the average annual premium nationwide costs only $1,700.
“My insurance bill came this month, and I couldn’t believe it,” Cynthia Vera-Tudela, a Peruvian freelance worker who owns a home in Miami, told Floricua. “It was more than double what I paid last year. How can they expect us to afford this?”
A report published in May by Hedge Clippers, a campaign organized by the Center for Popular Democracy, highlights how DeSantis not only failed to address the crisis, but made it worse.
“DeSantis is not only failing to hold the insurance industry accountable,” reads the report, titled How Ron DeSantis Sold Out Florida Homeowners. “Critically, he is failing to bring down rates for Florida homeowners.”
The analysis highlights DeSantis’ close ties to the insurance industry and argues that his industry donors have gotten their money’s worth, thanks to his administration’s policies.
During a special legislative session in May 2022, lawmakers approved a $2 billion taxpayer-funded reinsurance fund as a way to protect insurance companies from bankruptcy in the event of a cataclysmic event. Usually, insurance companies purchase reinsurance coverage on the open market; but DeSantis decided to use tax dollars to provide access to a state-subsidized insurance fund.
This was supposed to help lower insurance costs for consumers, yet costs for policyholders rose after the passage of the taxpayer-funded subsidy, and it doesn’t appear to have even helped keep companies in the state, as Farmers was among the companies that participated in that program.
The report also points out that DeSantis’ Office of Insurance Regulation has approved price increases at greater rates and for higher overall increases than the prior administration and that the governor has signed legislation to shield insurers from lawsuits.
According to the analysis, at the same time that DeSantis has overseen these “giveaways” to the insurance industry, his committee and the Friends of Ron DeSantis PAC raked in $3.9 million from the industry since the PAC’s formation in 2018. This included more than $150,000 in one day from dozens of State Farm agents.
Additionally, insurance industry donors of $5,000 or more contributed $9.9 million to “Friends of Ron DeSantis” and the Republican Party of Florida since January 1st, 2019, an analysis by Florida Watch found.
RELATED: GOP Leaders Push DeSantis’ Banking Bill Targeting Banks That Care About Worker Pay and Climate Change
Ignoring the Real Problem
In addition to his questionable policy choices surrounding the home insurance crisis, DeSantis has also notably refused to say the words “climate change,” says Maria Revelles, director of Chispa, an environmental movement that reflects the values of Latinos and other communities of color.
The governor’s refusal to acknowledge that the crisis is being caused by the uptick of extreme weather events related due to climate change has hampered the state’s ability to prepare for a crisis that has long been foreseen.
“For more than 20 years, Florida has been in denial and doing the bare minimum or nothing to take care of our environment,” Revelles told Floricua.
A Perfect Storm
Rather than ignore the science of climate change and give insurance companies billions in taxpayer dollars, DeSantis could have taken another path to alleviate the high cost of insurance for Floridians. When insurers threatened to pull out of the state and massively hike rates following Hurricane Andrew, then-Governor Lawton Chiles devised a solution that included a freeze on rate increases, the report notes.
Instead, by enforcing policies that benefit multi-million-dollar insurance companies, and his refusal to address climate change, Ron DeSantis has created a perfect storm that is impacting hardworking Floridians.
Even some Republicans are directing their anger at DeSantis and other state officials. Far-right activist Laura Loomer tweeted at the state’s Chief Financial Officer Jimmy Patronis, a Republican: “What are you and your boss [DeSantis] doing about it, since he’s never here anymore and he’s running for President?”
Sadly, for Floridians the answer is clear.
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