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Farmers Insurance drops Florida customers
A Florida resident who just renovated her 100-year-old home is worried she will have to move out of Florida.
SANFORD, Fla. - As Farmers Insurance announces intentions to pull out of Florida, a Central Florida policyholder says she may have to move.
"I panicked! In the State of Florida, there are very few insurance companies that will insure a home that's almost 100 years old," said Catherine Schweitzer. "It’s sad, so now we’re going to try and look and see what state we can move to on a fixed income."
"Those folks with older homes are going to have trouble," explained insurance agent John Darr of Darr Schackow Insurance.
Darr Schackow Insurance does not sell Farmers Insurance but Darr believes homes that are 30 years or older could have problems finding a new insurance company.
"It’s gonna make things tighter than they are because there’s one fewer carrier to go buy insurance from," he said.
RELATED: Farmers Insurance pulls the plug on Florida service, leaving tens of thousands without coverage
A spokesperson for Farmers Insurance blamed the move to discontinue automobile, home, and umbrella policies on increasing catastrophic and reconstruction costs. They released this statement saying, in part, "This business decision was necessary to effectively manage risk exposure."
The spokesperson said it will only affect 100,000 policies sold by Farmers Insurance agents, which is around 30% of their book – experts said the other 70% sold by independent companies will not be affected.
"One company called Foremost writes home insurance. Another, Bristol West, writes auto insurance," said Mark Friendlander, with the Insurance Information Institute.
Friendlander said Farmers' agents will most likely transfer accounts to those companies. "Going to make it as seamless as possible and help you move to another company if possible."
Schweitzer said if they do insure her home, the price will most likely escalate, "And we’ll probably have less of an insurance value and much higher cost."
Florida Chief Financial Officer Jimmy Patronis issued an investigation into Farmers Insurance complaints, which could lead to fines. In a statement, the CFO's Office said, in part "It is our expectation, that if Farmers cancels any policies, all prorated amounts must be returned to policyholders, and we are currently working with the Florida Association of Insurance Agents to explore methods for a bulk transfer of policies."
"We have to raise our voices louder, and we have to get our politicians regardless of political party to help," Schweitzer added.
She said this was supposed to be her "forever home."
"We love it, makes us sad, but it’s getting to the point where we can’t afford it," she said.
Under state law, insurers must give policyholders 120 days' notice before dropping their policies.