Farmers Insurance, a leading insurance provider, has recently made a significant decision that will impact its customers in Florida. The company has announced the discontinuation of residential, auto, and umbrella policies, leading tens of thousands of policyholders to seek alternative coverage options. It is important for affected customers to understand the details of this decision and explore suitable alternatives.
Farmers Insurance Policies in Florida
Farmers Insurance has clarified that this decision solely affects policies branded under the Farmers name. Policies sold by their subsidiaries, Foremost and Bristol West, will not be affected. The company has emphasized that this change primarily impacts policies issued through its “exclusive agency distribution channel.” Importantly, approximately 70% of current policies in Florida will remain unaffected by this decision.
Scope of the Discontinuation
As a result of this decision, Farmers Insurance will no longer underwrite new policies or renew existing ones in Florida. Trevor Chapman, a spokesperson for Farmers Insurance, confirmed that the discontinuation will affect a total of 100,000 policies, primarily consisting of homeowners insurance. This move comes in the wake of previous reports highlighting Farmers’ decision to cease writing new policies in Florida due to mounting pressure to settle hurricane damage claims.
Industry Response and Market Awareness
Independent insurance agent Tom Cotton, representing Hugh Cotton Insurance in Orlando, expressed his surprise at the extent of this announced reduction. Although he had anticipated Farmers Insurance refraining from writing new policies, the discontinuation has caught him and other industry professionals off guard. Farmers Insurance was well aware of the volatile and storm-prone nature of the Florida market, making this decision unexpected.
Compliance with Florida Law
In accordance with Florida law, insurance carriers are required to provide the state with a minimum notice period of 90 days regarding their intention to not renew policies. Additionally, carriers must furnish policyholders with a minimum notice period of 120 days for the effective date of nonrenewal or cancellation. In the event that policyholders receive a nonrenewal notice from Farmers Insurance Group or any other carrier, it is strongly advised to contact their agent promptly to explore alternative coverage options.
Market Exit Plan and State Approval
Farmers Insurance will be obligated to submit a market exit plan, known as a filing, which must receive approval from the state regulatory authorities. This plan outlines the company’s strategy for discontinuing operations and ceasing the underwriting of policies in Florida. The approval process ensures that Farmers Insurance fulfills its obligations to policyholders during the transition and complies with all regulatory requirements.
Seeking Alternative Coverage
Given the discontinuation of Farmers Insurance policies in Florida, affected policyholders should proactively seek alternative coverage options. Consulting with independent insurance agents who work with multiple carriers can be beneficial, as they can provide guidance in finding suitable policies from other reputable insurance providers. It is crucial for policyholders to review their insurance needs and make informed decisions to secure the protection they require.
In conclusion, Farmers Insurance’s decision to discontinue residential, auto, and umbrella policies in Florida has significant implications for policyholders. By understanding the scope of this change, being aware of legal requirements, and exploring alternative coverage options, customers can navigate this transition effectively. Policyholders are encouraged to seek professional guidance from independent insurance agents and ensure their insurance needs are met through reputable providers.
