AAA follows Farmers in limiting coverage in Florida, citing natural disaster threat
AAA will not renew home and car insurance for some of its policyholders in Florida, citing increased natural disaster risk that it says makes the policies not worth providing.
“Unfortunately, Florida’s insurance market has become challenging in recent years,” the company said in a statement, reviewed by CBS.
“Last year’s catastrophic hurricane season contributed to an unprecedented rise in reinsurance rates, making it more costly for insurance companies to operate.”
AAA said the change would only impact a “small percentage” of its customers.
“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,” it said.
The Hill has reached out to AAA for further comment.
Farmers Insurance made a similar announcement on Tuesday, saying it will stop offering auto, home and umbrella insurance in Florida entirely.
Hurricane season and other severe weather events mean that Florida already has some of the highest home insurance rates outside of tornado alley, according to finance tracker Bankrate.
The Sunshine State is expected to be one of the ones most impacted by climate change, through both an increase in storm severity and by rising sea levels. Florida land is about 100 feet above sea level on average, one of the lowest in the country.
Farmers will also reduce its home insurance coverage in California, again citing increased potentials for damage from earthquakes and wildfires. In May, State Farm insurance also announced it would leave California’s home insurance market.
Source: The Hill
