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Not Just in Florida: Insurance Companies Scale Back Across the U.S.

Real Estate Agent with Re/Max Town & Country Realty BK560717

Homeowners in the riskier sectors of the United States are losing their insurance coverage. However, this threat is not limited to natural disasters. Because of inflation, the cost of repairs has been rising at a greater rate than premiums.

Insurance firms around the United States are minimising their exposure to homeowners' property insurance in regions prone to natural disasters such as flooding, storms, and wildfires.

State Farm and Allstate recently withdrew from California's homeowner's insurance market. At the same time, AIG announced that it would lower coverage for wealthy homeowners in ZIP Codes with a high risk of floods or wildfires. Both events co-occurred.

The declaration made by AIG follows prior actions taken to decrease new exposure in California. Certain homeowners in Florida may also be affected by the news.

The strain on the nation's insurance markets is not the result of a single factor. Some individuals point to the effect of climate change, others point to the role of regulation, and others point to the influence of growing reconstruction costs as the culprit.

Insurers in California say that regulatory price constraints made it more difficult for them to recuperate an inflation-driven spike in the costs of rebuilding, which occurred in conjunction with escalating wildfire losses.

The American Property Casualty Insurance Association reports that the amount paid out in claims for homeowners' insurance in California climbed by around 33 percent between 2019 and 2022, even though premiums rose by just about the same amount.

According to insurance brokers, the number of coverage alternatives available to homeowners has decreased as more insurers have exited risky areas.

In a move that received relatively little attention, Farmers Group decided early this year to cease selling new homeowners insurance plans in the hurricane-prone state of Florida. According to a spokeswoman for the company, farmers will be able to control risk exposure due to this change more effectively. "With catastrophe costs at historically high levels and reconstruction costs continuing to climb."


About Realtor Scott Garrison:

Bringing over 36+ years of experience as a local Orlando Realtor, Top Central Florida Realtor SCOTT GARRISON at ReMax Town & Country Real State has helped perhaps more Orlando-Area families and investors buy and sell Central Florida Residential Real Estate than any other of the #19,000+ Orlando Realtors currently working in the Central Florida area! 


Living in Oviedo and with RE/MAX Real Estate offices in both WINTER SPRINGS, Florida and WINTER PARK, FL, Top Realtor SCOTT GARRISON actively serves your best Residential Real Estate needs virtually anywhere you’d want to be in Central Florida… including Orange, Seminole, Volusia, Osceola, Brevard, and Lake Counties. Scott has lived here in the Central Florida local Orlando-Area for nearly all of his life, attending the local Winter Park High School and graduating with several degrees from the nearby University of Central Florida. 


As a Top Seminole & Orange County Real Estate Agent, Realtor Scott Garrison also has extensive experience in Residential Sales and Purchases, Vacant Land and in helping clients with Foreclosures and Short Sales!  He owns multiple Rental Property right here in the area, and over the years, has done many “flips” by buying “ugly houses” and making them Pretty for a new buyer, so he also understands the Real Estate Investor mindset!  Call Scott today to find out why “This Realtor WORKS!”

Comments (1)

Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Scott. The more we develop the more the risk of loss. And with the recent storms and disasters the reinsurance companies have been hit hard. So to return to profitability there premiums have gone through the roof and financially unfeasible for the named insured. It is becoming a real issue everywhere. Enjoy your day.

Sep 13, 2023 04:28 AM