The State of Florida is investigating Farmers Insurance for ending its coverage in Florida and allegedly prioritizing “virtue signaling” over the interests of its customers.
“Farmers Insurance is well on its way to becoming the Bud Light of insurance,” said Jimmy Patronis, Florida’s chief financial officer, who announced that his office is launching an investigation into the company.
The announcement followed reports that Farmers Insurance plans to discontinue much of its coverage in Florida, affecting roughly 100,000 policyholders in the state.
Farmers Insurance ceased offering new home, automobile, and umbrella insurance policies this week and said it would not renew existing policies when they expire. The company claimed the decision was made because of the growing costs of natural disasters such as hurricanes, according to The Washington Post.
However, Patronis claimed the insurance provider focused more on “virtue signaling” and “playing politics” than good business, remarking that Farmers Insurance is “bad at helping people … [but] good at virtue signaling.”
“It’s clear that while Farmers [Insurance] 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,” he asserted.
Patronis referenced Farmers Insurance becoming the first American insurance company to sign the United Nations Principles for Sustainable Insurance last year.
“Farmers is committed to operating in a way that positively impacts our customers, our employees and communities by incorporating Environmental, Social and Governance (ESG) considerations into our business,” Farmers Insurance CEO Jeff Dailey said, per a news release.
Patronis said he intends to hold the company “accountable to Florida policy holders.”
“It is our expectation that if [Farmers Insurance] cancels any policies, all prorated amounts must be returned to policyholders and we are currently working with the Florida Association of Insurance Agents to explore methods for a bulk transfer of policies,” he said.
“I have directed my Division of Consumer Services to conduct a deeper dive into Farmers Insurance complaints,” he continued. “If those complaints hit a certain threshold, it will trigger [a] market conduct investigation that could lead to fines being levied against the carrier.”
Patronis claimed Florida’s legislature had done “impactful work to help stabilize the [insurance] market,” and Farmers Insurance’s decision to end coverage throughout the state is “less a representation of the Florida market — and more of bad leadership at the insurer.”
“… [M]y guess is they’re about to get hauled before the Legislature for their actions when the next legislative session begins,” he added.
However, Farmers Insurance has maintained that its decision to cut coverage in Florida was a necessary business move to mitigate risk as Florida often suffers from severe hurricanes.
Furthermore, the company said its subsidiaries — Bristol West and Foremost Signature — will continue to offer policies in the state.
“Such policies will continue to be available to serve the insurance needs of Floridians,” company spokesperson Trevor Chapman said, per CNN. “Affected customers will receive notifications detailing when their coverage will end and will be advised of options for replacement coverage.”
The Dallas Express contacted Farmers Insurance for comment but received no response by press time.