- AAA Insurance is dropping a small percentage of homeowner insurance policies in Florida due to the need to manage risk and catastrophe exposure.
- The decision is a result of active hurricane seasons in recent years and inflationary rises in operational expenditures, making it challenging for AAA to conduct business in the same capacity.
- AAA’s announcement comes just two days after Farmers Insurance pulled out of the Florida market entirely.
AAA Insurance is dropping a “small percentage” of homeowner insurance policies in Florida, citing a need to manage risk and catastrophe exposure.
Though the insurer is committed to remaining in the Florida insurance market, it was unable to specify how many lines of policy would be affected by the decision. AAA further explained that active hurricane seasons in recent years, as well as inflationary rises in operational expenditures, have made it difficult to conduct business in the same capacity as in years past.
“This decision is one we do not take lightly, yet it’s a necessary one to reaffirm our commitment to the state and those we insure,” AAA said in a prepared statement.
Farmers Insurance, one of Florida’s largest remaining insurers, cited identical reasons upon its announced exit from the state insurance market on Tuesday, becoming the fourth company to do so this year.
The insurer informed the state that it was discontinuing home, car, and umbrella coverage in Florida, citing “risk exposure.” The revision impacts approximately 30 percent of the company’s business in Florida — close to 100,000 policies.
A spokesperson for Farmers, Trevor Chapman, told The Capitolist that the decision solely applies to insurance issued through the Farmers distribution channel. The insurer will continue to provide policy coverage via its subsidiaries, which include Bristol West, Foremost Signature, and Farmers GroupSelect. The secondary branches account for almost 70 percent of the parent company’s business transactions in Florida.
“We have advised the Florida Office of Insurance Regulation (OIR) of our decision to discontinue offering Farmers-branded auto, home, and umbrella policies in the state,” said Chapman. “This business decision was necessary to effectively manage risk exposure.”