Florida’s uphill battle with insurance deepened Tuesday with the exit of another large firm — Farmers Insurance.
Farmers’ decision to leave the state of Florida immediately triggered a round of political squabbling. The state’s chief financial officer accused the company of “playing politics” and threatened some sort of unspecified retaliation while Florida Democrats called a press conference to blame Republicans for pushing a “$3 billion handout” to select insurers instead of demanding accountability measures for the industry.
Farmers is far from the first insurer to leave the state, but the blowback appeared more political than any other in recent memory — possibly because opponents of presidential hopeful Gov Ron DeSantis (from both the left and right) see it as a point of weakness.
Michael Caputo, a former official in President Donald Trump’s administration, said Tuesday that issues like hurricane insurance are fundamental, kitchen table concerns that impact votes.
“Florida is a must-win battleground for the GOP nomination — will hurricane insurance decide it?” he tweeted. “Wedge issues like this win campaigns.”
At the center of the argument are the hundreds of thousands of Floridians who’ve lost coverage in the past few years as seven insurers went belly up, 15 stopped writing new business and four — Farmers being the latest — abandoned the state altogether. Another 18 insurers are on a state watch list over financial concerns.
And anyone that still has insurance is paying more than anyone in the nation, at triple the national average.
“People are hurting. They are feeling the financial burden and crunch of this property insurance crisis,” said Florida House Democratic Leader Fentrice Driskell in a press conference on Wednesday. “It is the No. 1 issue that people want to talk about right now.”
Farmers announced its decision to leave Florida on Tuesday, leaving about 100,000 policyholders scrambling to find someone else to cover them. That’s likely to raise demand for state-run Citizens Insurance, the insurer of last resort. Citizens, Florida’s largest insurer, is growing at a record clip, with nearly 1.4 million customers so far, at a pace that could put the company at 2 million policies by year’s end. The swelling number of policies also put Citizens on the hook for expensive disasters that private companies have decided aren’t worth the risk.
Florida has dedicated two special sessions and multiple bills in the last few regular sessions toward solving the state’s insurance crisis, largely by targeting what insurers regularly say is the main issue — a huge number of fraudulent lawsuits.
But after rewriting the rules to make it harder and more expensive to sue insurers, premiums are still on the rise. Although a July report from Florida’s Office of Insurance Regulation found that, for the first time in several years, the home insurance industry posted a net income gain.
Republicans blame ‘wokeness’
Republicans rushed to blame the insurer’s decision to leave on anything but the state’s turbulent market, despite years of reform efforts that have not succeeded.
In a letter to Farmers on Tuesday, the Office of Insurance Regulation wrote, “We understand that this decision was made independently of these reforms going into effect as part of a broader series of actions Farmers is making across the country and not solely focused on Florida.”
The state’s chief financial officer, Jimmy Patronis, went further, accusing the company of leaving Florida because its business was too focused on “sustainable insurance” and aligning investments with its social values, like avoiding investing in polluters or companies that sexually or racially discriminate against employees, a process known as environmental, social and governance investing that has become a recent political target for Republicans.
“The more we learn about Farmers Insurance the more it’s clear its leadership doesn’t know what they’re doing. While they’re bad at helping people, they’re good at virtue signaling,” Patronis wrote in a statement Tuesday. “It’s clear that while Farmers was making plans to exit a significant number of policies out of Florida, they were playing politics, and weren’t focused on running a successful company.
“I sincerely believe that with today’s actions, Farmers Insurance is well on its way to becoming the Bud Light of insurance,” he wrote, a nod to the recent controversy when Bud Light hired a trans woman to run a single TikTok ad for the beverage, triggering a conservative backlash and boycott against the company over its support of the LGBTQ community.
Patronis also announced his plan to look into the company’s complaints, which could trigger a market investigation and — potentially — fines and fees.
“The Legislature did impactful work to help stabilize the market, and Farmers Insurance actions are less a representation of the Florida market – and more of bad leadership at the insurer,” he wrote.
Farmers didn’t immediately respond to a request for comment about Patronis’ comment.
Democrats blame $3 billion ‘handout’
Democrats, on the other hand, were quick to point the finger directly at the Republican party, which has been in power for nearly two decades in Florida and shunned most Democrat-suggested policy fixes for the insurance crisis.
“We see Republicans trying to mince words… but they need to own this failure,” Driskell told the press. “This is a crisis they created.”
She called the recent Republican-led insurance reforms a giveaway to insurance companies of everything on their wish list, along with a “$3 billion handout” that helped insurance companies’ bottom lines but has yet to relieve pressure for policyholders.
Rep. Anna Eskamani, D-Orlando, said rising insurance costs are the most common issue her constituents bring her way, even Republican voters in her district have expressed frustration at the still skyrocketing costs.
“We have Floridians who’ve never filed a claim and always paid their premiums on time, but they’re being dropped,” she said. “Floridians cannot afford Florida.”
At the press conference, Eskamani also called the CFO’s tweets and statement about Farmers “embarrassing.”
“I would argue that threatening an insurance company is not a good way to attract more insurance companies to Florida, which is what we need right now,” she said.
Patronis’ comments also drew the ire of Rep. Hillary Cassel, D-Dania Beach, who spent most of her career as an attorney representing policyholders against insurance companies. She questioned Patronis’ decision to suddenly look into a company’s complaints only after they left, and not preemptively.
“Why are you waiting for them to leave? Now you’re threatening them with levies and fines because you could not solve the problem,” she said.
“Now we’re seeing them blame this on ESG, they’re trying to blame this on wokeness. If that’s really the truth … why are you waiting until now to investigate that when you have the ability to look into these companies and determine if they’re solvent in the time of Florida’s greatest need?”