AAA will not renew the auto and home insurance policies for some customers in Florida, joining a growing list of insurers exiting the Sunshine State amid a growing risk of natural disasters.
“Unfortunately, Florida’s insurance market has become challenging in recent years,” the company said in a statement emailed to CBS MoneyWatch. “Last year’s catastrophic hurricane season contributed to an unprecedented rise in reinsurance rates, making it more costly for insurance companies to operate.”
AAA declined to say how many customers won’t have their policies renewed, saying only that the change will affect “a small percentage” of policy holders.
The company is the fourth insurer over the last year say it is backing away from insuring Floridians, a sign extreme weather linked to climate change is destabilizing the insurance market. On Tuesday, Farmers Insurance said it will no longer offer coverage in the state, affecting roughly 100,000 customers.
Farmers said the move will affect only company-branded policies, which make up about 30% of its policies sold in the state. –
Already, homeowners in the state pay about three times as much for insurance coverage as the national average, and rates this year are expected to soar about 40%.
Insurance companies are leaving Florida even as lawmakers in December passed legislation aimed at stabilizing the market. Last year, Gov. Ron DeSantis signed a law that, among other things, creates a $1 billion reinsurance fund and puts disincentives in place to prevent frivolous lawsuits. The law takes effect in October. —
Below, video statement from global Reinsurance company MunichRe, 2021.
One thought on “DeSantis Attacks “Woke” Insurance as More Companies Flee Florida”
Perhaps if, as some of us fear, governments will continue to subsidize risk, it might at least be tempered by the increase in construction cost scaring people away from rebuilding their damaged homes in the riskiest areas.
Perhaps if, as some of us fear, governments will continue to subsidize risk, it might at least be tempered by the increase in construction cost scaring people away from rebuilding their damaged homes in the riskiest areas.