AAA will not renew the auto and home insurance policies for some customers in Florida, joining a growing list of insurers exiting the Sunshine State amid a growing risk of natural disasters.
Bankers Insurance and Lexington Insurance, a subsidiary of AIG, left Florida last year, saying recent natural disasters have made it too expensive to insure residents. Hurricanes Ian and Nicole devastated Florida in 2022, causing billions of dollars in damage and killing a total about about 150 people.
Under Florida law, companies are required to give three months' notice to the Office of Insurance Regulation before they tell customers their policies won't be renewed.Already, homeowners in the state pay about three times as much for insurance coverage as the national average, and rates this year are expected to soar about 40%.
Insurance companies are leaving Florida even as lawmakers in December passed legislation aimed at stabilizing the market. Last year, that, among other things, creates a $1 billion reinsurance fund and puts disincentives in place to prevent frivolous lawsuits. The law takes effect in October. AAA said it's encouraged by the new measure, but noted"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."
Insurers are staging a similar exodus in California, where AIG, Allstate and State Farm have stopped taking on new customers, saying that
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