In early June, Farmers Insurance Group announced it would cease issuing new homeowners policies in Florida for the foreseeable future. A Farmer’s spokesperson explained the decision, stating, “[w]ith catastrophe costs at historically high levels and reconstruction costs continuing to climb, we implemented a pause on writing new homeowners policies to more effectively manage our risk exposure.”1 The announcement comes on the heels of an influx of insurance claims following Hurricane Ian’s widespread devastation to the state.

While this blog has covered the rather extensive issues policyholder advocates have had with Farmers (here, here, here, here, here, and here, to name a few), the move may have some concerning implications. Economics 101 tells us that, by limiting the options available to policyholders, competition in the Florida insurance market decreases, which may drive already increasing costs of coverage higher. With fewer carriers to choose from, property owners may face challenges in securing coverage at affordable rates or finding policies that meet their specific needs. Further, while existing policyholders may not immediately be affected by Farmers’ decision, this development may lead to increased scrutiny from insurers when it comes time for policy renewals. As insurance companies reassess their risk exposure, their underwriting practices may become more stringent. This could result in policyholders facing stricter requirements, higher premiums, or non-renewal of their existing policies.

Of course, there’s also the potential that Farmers policyholders may experience an increase in claim denials. With the company aiming to manage its risk exposure and cut losses, it’s possible its claims-handling process will get a facelift – does McKinsey and Co. ring a bell? – aimed at saving money. Unfortunately, as we’ve seen before, when insurance companies are looking to save, they tend to do so at the expense of the policyholder.  

On the other hand, it’s not all bad. Farmers’ decision can be seen as the responsible approach to avoid overextending their financial capabilities, thereby protecting the policyholders they already have. Additionally, Farmers’ withdrawal from the market opens up opportunities for other insurance companies to step into the gaps Farmers is leaving. This creates space for new and existing insurers who are better equipped to handle the challenges of the region’s unique risks. The shift in the market landscape leaves room for insurers who don’t place profits over policyholders (and some do exist!) to do the right thing.

Perhaps most importantly, Farmers just said what every insurance company is thinking: the increasing frequency and severity of catastrophic events paired with the steady increase of material and labor costs is cutting into the industry’s profits. The incentive for insurance companies to delay and deny claims has never been higher. Policyholders in Florida and around the country should be aware of this potential risk and be prepared to navigate the claims process diligently. And, as always, should an unjust delay or denial happen to you or someone you are representing, the attorneys at Merlin Law Group are always here to help.

1 Kane, Libby, and Sarah Silbert. Where to Get New Home Insurance in Florida Now That Farmers Doesn’t Offer It. 14 June 2023,. Available online at