Around the same time that Farmers Insurance announced a significant withdrawal from the Florida and California markets, it also sent thousands of non-renewal notices to homeowners in Georgia. In Georgia, however, the airline appears to have misunderstood the state’s rather unique non-renewal law – and was forced to back down.
Georgia Insurance Commissioner John King issued a bulletin Friday saying farmers had withdrawn non-renewal notices that were sent to homeowners in early July. The non-renewals stated that the farmers would no longer deed the property if the roof of the house was 15 years old or older.
This apparently is not permitted under Georgia Law 33-24-46, which prohibits carriers from changing the underwriting guidelines or eligibility rules for existing policies unless the changes apply to an entire class or territory and were approved by the Commissioner’s Office.
“I don’t know how unique our law is, but I know many states don’t have it,” said Weston Burleson, director of communications and legislative affairs in the commissioner’s office.
Farmers’ actions on new guidelines are not subject to the statute.
The Farmers’ public relations director, Trevor Chapman, shed little light on the issue on Monday.
“We have decided not to move forward with our plan to not renew a limited number of homeowners policies with older roofs,” Chapman said in an email. “We have begun notifying affected customers of this decision.”
The sudden about-face came as a surprise to some in the industry in Florida, where several insurers have not renewed HO policies in recent years due to the age of roofs and a tight market. Others said the legal team at Farmers, one of the country’s largest real estate companies, should have been aware of Georgia’s legal and regulatory restrictions and probably sought approval before gradually reducing its exposure to the state.
“I am extremely disappointed in Farmers’ actions and am currently considering further disciplinary action,” King said in the release.
Actions could include fines or revocation of a farmer’s license to do business in Georgia, King warned.
The letters to at least some farmers’ policyholders in Georgia went out on July 6. King’s office didn’t know exactly how many notices were sent, but Burleson said tens of thousands of homeowners were affected. Within two weeks of the announcements, the office responded.
“This week it was brought to our attention that Farmers Insurance had advised their customers that they would not renew homeowners insurance policies for homes with roofs older than 15 years, in blatant violation of Georgia law,” King said last week in the statement. “My office took immediate action and ordered farmers to reverse course and revoke these planned non-renewals.”
The non-renewals are a sign of the times in the U.S. property insurance industry, which has been hit hard in key markets in recent years: wildfires in California and hurricanes and tort claims in Florida. Farmers filed a notice with Florida regulators on July 10, announcing that it was essentially withdrawing from the state this year, except for policies written by Farmers subsidiaries.
This filing came a month after Farmers announced it would stop writing new policies in Florida. California-based Farmers also announced it would stop writing new homeowners insurance in California, a move that followed similar announcements from State Farm Insurance and Allstate Insurance.
This is the first time Georgia regulators have ordered a property insurer to reverse course on non-renewals, even though the law has been in place for several decades, Burleson said. However, King, who took office in 2019, has expressed outrage at auto insurers that have increased rates without prior approval.
After Allstate raised auto premiums by an average of 40% in 2022, King’s office worked with Georgia lawmakers this year to change the law to increase use-and-file rates. Starting July 1, rate increases can take at least 60 days to take effect, giving the commissioner’s office more time to review filings.
Agriculture in California, Florida, Georgia
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