ORLANDO, Fla.– Farmers Insurance announced this week it would no longer offer home, auto or umbrella insurance plans in Florida, citing the weather risk in the Sunshine State for hurricanes.
It’s a decision that will Farmers’ decision will impact about 100,000 policies, according to FOX Business.
“Farmers offers insurance through several different brands, and this decision only applies to policies issued through our exclusive agency distribution channel,” company spokesperson Trevor Chapman told FOX Business in a statement. “There is no impact to 70 percent of policies currently in force for customers in the state, including Bristol West, Foremost SignatureSM, Farmers GroupSelectSM, Foremost Choice and Foremost-branded policies. Such policies will continue to be available to serve the insurance needs of Floridians.”
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A spokesperson said policyholders will be notified of a timeline when they will lose coverage.
The company said the decision to pull coverage in Florida was “necessary to effectively manage risk exposure.”
Hurricane Ian created an estimated $110 billion in damages last year in Southwest Florida, becoming the costliest hurricane in Florida’s history.
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Farmers Insurance also announced plans to pull coverage from California due to the wildfire risk.
With increasing extreme weather events, homeowners are facing new challenges in getting insurance coverage with rising costs.
Flood insurance is not part of a basic homeowners’ insurance policy. Only about 5 to 15% of homeowners have flood insurance. Renters and homeowners aren’t required to have flood insurance unless they live in a flood zone prone to flooding.
However, people who do not live in flood zones have faced devastating flooding in recent years. Most recently, torrential rain led to devastating flooding in Vermont.
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This year there have been 1,986 reports of flash flooding in the U.S. compared to an average of 1,776 reports for this point in the year.
An average flood insurance policy costs about $500 to $600 a year and a majority of flood policies in the U.S. are issued through FEMA’s National Flood Insurance Program.
A flood insurance policy takes 30 days for coverage to begin and policies need to be updated every year.