Farmers Insurance recently announced a temporary halt in the sales of new homeowners policies in Florida as the hurricane season commences. The decision was prompted by escalating costs, as stated by Luis Sahagun, the communications director for the insurer. The company aims to manage its risk exposure more effectively by implementing this measure. According to data from the Florida Office of Insurance Regulation, Farmers Insurance had approximately 2,800 homeowners policies active in the state by the end of 2022.

Florida continues to grapple with the aftermath of Hurricane Ian, which struck the region in September of last year. Karen Clark & Co., a risk modeling firm, estimates that a significant portion of the $63 billion in privately insured losses resulting from Ian occurred in Florida. It should be noted that this estimate includes numerous litigated claims, predating certain legislative reforms enacted in 2022 and 2023.

The impact of Ian serves as a reminder that even a single storm can cause extensive damage. The National Oceanic and Atmospheric Administration’s Climate Prediction Center predicts a range of 12 to 17 named storms during this year’s hurricane season, which began on June 1. Among these, 5 to 9 storms may intensify into hurricanes, with 1 to 4 potentially becoming major hurricanes. NOAA expresses 70% confidence in these projections.

Citizens Property Insurance Corp., the state-backed insurer of last resort for property owners, faces different circumstances as it lacks the option to halt new business. Consequently, the corporation is pursuing an average rate increase of 12.5% to manage its operations effectively.