Crisis continues: AAA Insurance set to drop ‘small percentage’ of Florida homeowners
AAA Insurance will be issuing non-renewals for a select number of homeowners in Florida, the company told News4JAX sister station WKMG on Thursday.
This comes after Farmers Insurance was revealed earlier this week to be pulling out of Florida’s dwindling insurance market.
The state is in the midst of a property insurance crisis as more companies exit the state and the average property insurance rate in the state is more than triple the national average.
In a news release, AAA blamed inflation, excessive litigation and last year’s “catastrophic” hurricane season for what it calls an “unprecedented rise in reinsurance rates, which affects the company’s profitability.
The company said it will continue to write new home and auto policies and plans to help the “small percentage” of people who will not get their policy renewed by helping them find alternate coverage.
Florida legislators tackled the issue of insurance company withdrawals from the state during a special session in 2022. A significant change made during the session was aimed at curbing litigation against insurance companies, which has been cited as driving up insurance costs.
AAA said that measure could help, but it will take some time.
“We are encouraged by the statutory changes that have recently taken effect and believe they will provide positive results. Those improvements will take some time to fully materialize and until they do, AAA, like all other providers in the state, are forced to make tough decisions to manage risk and catastrophe exposure. This includes issuing some non-renewals. The number of non-renewals accounts for a small percentage of our business,” company officials said in a statement.
No specific figures were provided regarding the number of non-renewals to be issued.
State senator Tracie Davis, who represents Jacksonville, urged Gov. Ron DeSantis to return from the presidential campaign trail and call a special session to address the issue.
But DeSantis said he wants Floridians to be patient and not panic. During a recent interview on a conservative talk show, the governor addressed the recently passed legislation related to property insurance relief:
RELATED: Florida’s insurance crisis: DeSantis says ‘knock on wood’ during hurricane season
“I think what’s going to happen is because we did those reforms, it now is more economical for companies to come in,” DeSantis said. “I think they’re going to wait through this hurricane season and then I think they’re going to be willing to deploy more capital to Florida.”
In the meantime, though, U.S. Senator and former Florida governor Rick Scott said prices for insurance in Florida are not sustainable and offered recommendations to solve the crisis:
”You have to crack down on the fraud, and you have to work every day, every year. And you got to drive down the size of Citizens Insurance. And you got to recruit other companies. So how do you do it? You go talk to the insurance companies,” Scott said.
Source: WJXT News4JAX
