Jim Tynan had a 32-year homeownership policy with Allstate on his 1,200-square-foot condo in Ponte Vedra, Florida.
In January, Tynan's Allstate subsidiary notified him that it was terminating him. Tynan called 10 different agencies, but “none of them covered me,” he said.
Former owner of dog found chained to a pole just before Hurricane Milton arrested, DA says 'to face the music'
Finally, he found something that would make it happen. It cost more than 50%.
Florida has been hit by four major hurricanes in the past four years, causing insurance premiums to soar and some insurance companies to withdraw coverage. There's another worry for residents cleaning up after the storm or living near water. Is there still insurance?
Tynan said his home was not directly hit by the hurricane, but he is three miles from the ocean.
“I'm living in fear that I'm going to get a letter from my new company saying they're going to lay me off too,” Tynan said after the recent hurricane. “It's very scary.”
Six other homeowners contacted by Reuters in the Florida region, which includes coastal areas and the Keys, also said they feared further price hikes and exclusions in the wake of back-to-back hurricanes. Worse, they feared the possibility of losing their insurance altogether.
Drone footage of a destroyed beach house after Hurricane Milton made landfall in Manasota Key, Florida, USA on October 11, 2024. (Reuters/Ricardo Arduengo/File Photo)
Allstate said it is working with regulators to protect as many customers as possible. For those that are not covered, “we work with other carriers to provide alternative coverage services.”
Many homeowners in Florida face difficulties securing insurance. Average homeowners insurance premiums in Florida rose nearly 60% between 2019 and 2023. Some major insurance companies have reduced coverage. Meanwhile, the state's insurance company, Citizens, is taking on more business.
Analysts and insurance experts expect insurers to become even more nervous after Hurricane Milton made landfall on Florida's southwest coast just 12 days after Hurricane Helen made landfall on the state's northwest coast. I am doing it.
“This…certainly makes insurance companies concerned about continuing to insure the market,” said Mark Ragin, associate professor of risk management and insurance at the University of Georgia's Terry College of Business. said.
More hurricanes could increase reliance on Citizens, a state-backed nonprofit insurer considered the insurer of last resort.
Florida Gov. Ron DeSantis has in the past questioned how insurance companies would be able to pay out claims in the event of a major storm. Civic spokesman Michael Pelletier said the system allows policyholders to pay the surcharge first and then, if necessary, assess non-policyholders as well, so they can pay at any time. said. He said the agency has received about 80,000 claims related to Milton and expects to be able to pay them all without imposing assessments on non-citizen policyholders.
DeSantis' office said Wednesday that citizens always have the ability to pay claims, but “this will be a burden for all Florida policyholders.”
According to data from the Florida Office of Insurance Regulation (FLOIR), as of June, people held more than 1.2 million insurance policies, up from about 1.14 million at the end of 2022.
“There could be a scenario where people have to buy more insurance again,” said Chai Gohil, global insurance analyst at investment management firm Neuberger Berman.
insurance worries
A series of rainstorms has heightened concerns about price hikes.
“I think any hope that the market will soften after Herren and Milton is gone,” Ken Gregg, founder and CEO of Orion 180, told Reuters in a written statement. Gregg added that Milton will influence the reinsurance market next season “in terms of capacity and pricing.”
Brian Schneider, senior director of insurance at Fitch Ratings, said price hikes by reinsurers have “forced many primary insurers, particularly commercial insurers, to increase the prices they charge for their real estate business. “There is,” he said.
Florida's insurance market is comprised of a combination of large established players, new entrants, and citizens.
In addition, many insurance companies, including Orion 180 Insurance, are taking over existing insurance from citizens in “depopulation programs” to shift policyholders to private insurance companies. Civic spokesman Michael Pelletier said the company aims to reduce its number of policies in force to less than 1 million by the end of 2024.
Despite the major storm, many private insurers said they remained committed to the market.
The largest include State Farm Florida Insurance and Universal Casualty Insurance, according to the Florida Office of Insurance Regulation (FLOIR).
“State Farm intends to maintain a presence in the Florida insurance market,” a company spokesperson told Reuters.
Arash Soleimani, Universal General Insurance's chief strategy officer, said the company is “resolutely committed” to Florida. “Nothing that happened this year was outside the expectations that we modeled.”
Security First Insurance, a Florida-focused insurer, also said it would continue to serve the market.
“If we had another hurricane like Milton for Security First, it would be an earnings event rather than a capital event,” CEO Rock Burt told Reuters.
Of the companies that have withdrawn, many have maintained some level of exposure.
Progressive began reducing its exposure in mid-2022 to focus on states with a low risk of catastrophe, but a Progressive spokesperson said its real estate operations in the state continue to generate revenue. Ta.
In 2023, Farmers Insurance ended private label coverage in the state. A Farmers spokesperson said the company will continue to serve customers through its Bristol West and Foremost brands.
Michael Klein, president of Personal Insurance Travelers, said on an April earnings call that Travelers is avoiding underwriting in Florida because of weather risks there. The company did not respond to requests for comment.
“Milton and Helen are back-to-back fist pumps for the state of Florida, but I think the big insurance companies are in a great position to pay claims,” said President and CEO of the Florida Personal Insurance Federation. (CEO) Michael Carlson said. It is a major insurance company in the state, and it is unlikely that any major company will leave.
CLICK HERE TO GET THE FOX NEWS APP
But for homeowners, it's worrying.
“The reality is we could be forced to leave our home of 35 years,” said Sherry Hansen, who lives in the Florida Keys. “All our eggs are in this one basket.”
