For 32 years, Jim Tynan had Allstate homeowners insurance on his 1,200-square-foot condo in Ponte Vedra, Florida.
In January, Jim Tynan’s Allstate subsidiary told him it would drop him. Mr. Tynan called ten different agencies, “and nobody would cover for me,” he said.
Eventually he found someone willing to do it. It cost him 50% more.
Florida has been hit by four major hurricanes in the past four years, sending insurance premiums skyrocketing and prompting some insurers to cut coverage. Residents cleaning up after storms or living near water have another concern: Will they still have insurance?
Tynan said he was not hit directly by a hurricane, but was two miles from the ocean.
“I live in fear of receiving a letter from my new company telling me they will fail me too,” said Mr. Tynan after the last hurricane. “It’s very scary.
Six other homeowners contacted by Reuters in areas including both the Florida coast and the Keys also said they feared back-to-back hurricanes would lead to further price increases and foreclosures. Even worse, they fear losing their insurance altogether.
Allstate said it was working with regulators to protect as many customers as possible. For those it can’t cover, “we work with other insurance companies to offer other coverage options.”
A number of Florida homeowners have been exposed to an uncertain insurance situation. Average homeowner premiums in Florida increased nearly 60% between 2019 and 2023. Some major insurance companies have reduced coverage. The public insurer, Citizens, saw its activity increase.
Analysts and insurance experts predict greater nervousness from insurers in the wake of Hurricane Milton, which made landfall on Florida’s southwest coast just 12 days after Hurricane Helene made landfall on Florida’s northwest coast.
Marc Ragin, associate professor of risk management and insurance at the University of Georgia’s Terry College of Business, said, “It’s certainly going to make insurance companies concerned about continuing to insure in the marketplace.”
The increase in hurricanes could increase reliance on the non-profit insurance company Citizens, supported by the state and considered the insurer of last resort.
Florida Gov. Ron DeSantis has previously raised questions about how the insurer could pay claims in the event of major storms. Michael Peltier, a spokesman for Citizens, said it would still be able to pay because it was structured to first collect surcharges on the insured and then, if necessary, assessments on the uninsured. He said about 80,000 claims have been filed so far as a result of Storm Milton, and the company believes it will be able to settle all of them without having to collect contributions from non-citizen policyholders.
Mr. DeSantis’ office said Wednesday that while citizens will still have the ability to pay claims, “it will come at the expense of all Florida policyholders.”
Citizens had more than 1.2 million policies in force in June, according to data from the Florida Office of Insurance Regulation (FLOIR), compared to about 1.14 million policies at the end of 2022.
“We could see a scenario where Citizens has to back a large number of policies,” said Chai Gohil, a global insurance analyst at investment management firm Neuberger Berman.
INSURANCE TREATMENTS
The storms, which occurred in close succession, reinforced fears of rising prices.
“Hope for a calmer market faded after Helen and Milton,” Ken Gregg, founder and CEO of Orion180, told Reuters in writing. Gregg added that Milton would impact the reinsurance market for the next season “in terms of capacity and price”.
Brian Schneider, senior director of insurance at Fitch Ratings, said reinsurance price increases caused “many primary insurers, particularly on the commercial side, to increase the prices they charge on insurance business. goods”.
Florida’s insurance market consists of a mix of large incumbents, new entrants and citizens.
In addition, a number of insurers, including Orion180 Insurance, are taking over Citizens’ existing policies as part of a “depopulation program” aimed at moving policyholders to private insurers. Michael Peltier, a spokesman for Citizens, said the goal was to reduce the number of policies in force to less than 1 million by the end of 2024.
Despite the violent storms, a number of private insurers said they remained committed to the market.
The largest are State Farm Florida Insurance and Universal Property & Casualty Insurance, according to the Florida Office of Insurance Regulation (FLOIR).
“State Farm plans to maintain its presence in the Florida insurance market,” a company spokesman told Reuters.
Global Property & Casualty Insurance Chief Strategy Officer Arash Soleimani said the company is “strongly committed” to Florida. “Nothing that happened this year exceeded our modeled expectations.
Security First Insurance, a Florida-focused insurer, also said it remains committed to the market.
“Another hurricane like Milton for Security First would be a profit event, not a capital event,” Security First CEO Locke Burt told Reuters.
Among those who have withdrawn, many retain some exposure.
Progressive began reducing its exposure in mid-2022 to focus on less disaster-prone states, although a Progressive spokesman said it continued to write property and casualty insurance contracts in the ‘State’.
In 2023, Farmers Insurance withdrew its own brand coverage in the state. A Farmers spokesman said the company continued to serve customers through its Bristol West and Foremost brands.
Travelers have avoided drawing in Florida because of weather-related risks, Michael Klein, Travelers’ president of personal lines, said during an April earnings conference call. The company did not respond to a request for comment.
“I think if Milton and Helene are back-to-back blows for the state of Florida, the major insurance companies are very well positioned to settle claims,” said Michael Carlson, president and CEO of the Personal Insurance Federation of Florida, which represents the state’s major insurance companies and does not see the big players leaving.
For homeowners, however, the concerns are increasing.
“The reality is we may be forced to leave our home of 35 years,” said Sherri Hansen, who lives in the Florida Keys. “All our eggs are in one basket.
