Home / Nationwide Insurance Pulls Out of Florida. Is Anyone Surprised?

Nationwide Insurance Pulls Out of Florida. Is Anyone Surprised?

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The South Florida Sun-Sentinel reports today that Nationwide Insurance Company will no longer offer new homeowner policies to Floridians. Nationwide is the eleventh in a long line of insurance companies that are bailing out on Florida homeowners in the wake of last year's hurricanes.

Company spokesman Joe Case says "Even with rate increases, you have other pieces of the puzzle that are always changing [in the insurance market]. That demands a continuing evaluation of our business strategy."

As a Florida resident, may I say: What a load of crap.

Florida hurricanes are not exactly unheard of events. The Sunshine State has gotten pummeled for longer than scientists have been tracking storms so this "piece of the puzzle" has never "changed". If Nationwide chose to overlook or ignore the potential for repeated hurricane strikes in one season, that is their problem, not ours. Insurance companies have been content to take our money for years and we have been willing to pay for all the extra riders they insist upon: wind, flood, hurricane, etc. Now that Florida presents a risk to their bottom line, these companies are out the door faster than you can say "Category Four."

The departure of these companies from the homeowners market means residents will now be forced into the hands of smaller insurance companies known for their sky-high rates. Many private companies would be unable to absorb the financial impact of a hurricane season similar to last year's so insurance coverage becomes a very shaky situation for everyone concerned. Homeowners pay top dollar for coverage and then lose sleep wondering if they'll be reimbursed in the event of a loss. Small companies take these payments and then lose sleep worrying if they can cover the bills in the event of widespread hurricane damage. Meanwhile, companies like Nationwide simply pick up their toys and go home after years of promising they're "on our side."

To add insult to injury, Case goes on to say that his company will continue to offer automotive coverage because "it's a different kind of risk." It sure is, Mr. Case, if you equate "different" with "minimal." It's a lot more palatable to cover the loss of an $18,000 car than a $200,000 home, isn't it? Situational ethics might be in Nationwide's vocabulary, but it isn't in mine.

Insurance companies have an inherent responsibility to provide a level of comfort to the policyholders whose money they take. To abandon Florida residents simply because they suddenly don't like the playing field is careless and undermines the very business model they hope consumers will buy into. With eleven insurance companies pulling out of Florida in just the past few months, many residents are openly wondering about the value of having insurance in the first place if it won't be there when you need it most.

I have not been personally affected by the insurance companies who are running across the state line with their tails between their legs. Yet. I'm covered by one of the few companies still willing to insure Florida homeowners but I hold my breath every time I walk to the mailbox. I'm sure it's just a matter of time before I get a letter telling me that my insurer is taking a hike too.

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About Lisa

  • alexis smartavenue

    My insurance company has raised it’s rate $368 and put another rider against sink hole loss.$23,000 deductible.How many sink hole occurrences in my part of Florida our county not being anywhere the top.
    Sinkhole Hazards There are two relatively small areas at risk from sinkholes as shown in the maps in Attachment D The County can restrict or regulate development through overlay zones or preservation districts in these high-risk sensitive areas. This is considered a best management practice from Protecting Florida’s Communities
    Attachment D includes maps of potential sinkhole areas in the County. Sinkhole areas are found on the northern county border near I-95 and St. James Drive. These susceptible areas are currently residential. The vacant land adjacent to the existing development in the hazard zone is designated for residential use, as shown in Table 2.5

  • Kevin J. Lawson

    As a Minnesota resident I am tired of subsidizing home owners insurance for high risk states. We are tired of paying your insurance premiums. We build our homes to withstand blizzards. You should build your homes to withstand hurricanes.

  • Lou

    I’m prepared to sue Nationwide for a portion of the premiums we paid. Those premiums are also an investment in their services. Nationwide paid 250.00 as part of a claim in 33 years on our house. Deductable was 500.00. We paid 1100.00 per year average. Sure they can drop us for the same possibilities that have existed for 33 years, just return 80% of the premium. Insurance companies base their service on security. Perhaps I would be wiser to hit a casino in Vegas. We could have put the money in a 401K. Nationwide + Madoff = 0. Nationwide is still using brokers. I wonder what happened to our money. Some fat cats bonus maybe. OH, I’ll be seeing these folks in court. There’s a lawyer out there somewhere cooking up a class action suit.

  • JR


  • Tim Nebelwerfer

    The exodus of Florida homeowners insurance companies has continued since Nationwide Insurance Company of Florida and other large names stopped writing new business.

    The Florida home insurance crisis is alive and well in 2008 and will continue to be with us for some time.

    Here is some help if you lose your Florida homeowners insurance:

    Find, Screen, and Contact Florida Home Insurance Companies

    Don’t put up with outrageous Florida home insurance companies or their high prices!

  • James R Morotti

    I have read a few of the comments on this page, and it seems to me that there is one point they are all missing, and that is that the State and the Insurance Companies are not using and are suppressing the free market. With the mortgage co’s the State and the Insurance co’s having tunnel vision they take freedom of choice away from the individual. It’s a little like saying if I want cable TV, I have to also buy the Spanish channels though I don’t speak Spanish. The mortgage people and the Insurance and the State decide that I must insure for mold even if my personal situation would not warrant this. Mortgage co’s have escrow accounts where small amounts could be put away to cover larger and larger deductions even to the point of self insurance, or paying down principle. Who loses here and who gains. The mortgage people are protected, and have extra funds backing the loan, They could even give the mortgage holder an interest break for holding the funds. It’s the free market Gentleman. Thats the answer. It’s always the answer. Not corp. welfare. The insurance companies gambled and lost, if they can’t handle the heat maybe they should get out of the State. Give individuals this option, and watch these Insurance people squirm. Don’t let Insurance people run our states economy

  • Dan

    The rest of the country needs to wake up. The insurance companies are pulling out of Florida; most non-Florida residents say “so what”. I will reply the same as they no longer write policies for New Orleans (flooding and hurricanes), Mississippi (Hurricanes and flooding), Alabama (Hurricanes and flooding), Texas (same with tornadoes),Washington state (flooding), southern Indiana (tornadoes), Ohio (same), New England Nor’easters and blizzards), Mid West areas where there are many tornadoes, California with Wild fires, Flooding and land slides and Earthquakes, Colorado with the same!! Just about every state has issues with some kind of natural disaster, should we expect and be happy when the companies pull out of them also, will all you people be happy then also?

    Think about it before you reply about the insurance industries having rights to pull out, I don’t disagree but don’t complain when your in our situation down here and you can’t insure your homes.


  • Sadsack Sadlek

    All of the above said and done, I have one last complaint to the Florida Insurance Regulators Board. Nationwide dropped my wind and storm homeowners insurance. I still need fire and theft insurance and want to continue my liability umbrella policy. According to state law I can’t do that without an underlying home owners insurance policy. How do you jerks propose I do that when Insurance companies in the state aren’t writing any new homeowners insurance policies?
    You bad name boys sure have made a mess out of Florida Dream Retirement pie. Maybe you guys in Tallahassee can recomend an insurance co. that will write me a full coverage homeowners policy.

  • WSJ

    ARE HURRICANES UNINSURABLE? Holman Jenkins Jr. The Wall Street Journal. 2006/06/07. Page A15. Recent historical developments such as the increasing number of terrorist attacks have prompted the insurance industry to characterize some risks as uninsurable. Recently Aon’s Paul Bassett said that the global war on terrorism had greatly reduced the risk of a major terrorism operation such as the destruction of the World Trade Center. Hurricanes have become the new uninsurable risk. The Federal Emergency Management Agency (FEMA) estimates that a quarter of the coastal dwellings will be destroyed over the next 50 years. Some are calling for homeowners to fully accept the risk of coastal development, which would require that insurers be allowed to charge premiums to cover risks and that courts uphold insurance contracts. Robert Litan, an economist with the Brookings Institution, says that property owners now expect tax funds to cover major losses. Ed Liddy, the CEO of Allstate, is working to build support for a federal disaster insurance program, a proposal that has recently been endorsed by State Farm and a few other industry members. It is highly unlikely that the debate over such a proposal will be settled before the next elections.

  • Comment sparse on 80 percent State Farm home insurance hike – Factiva (AP) 6/5/06
    June 5, 2006
    Travis Reed
    The Associated Press

    Lynn Martin took a day off work and drove all the way from Punta Gorda on Monday to talk about homeowner’s insurance.

    In just under a decade, the 51-year-old has seen her State Farm premiums rise 300 percent to $1,600 this year, and that’s not even including the 80 percent average rate hikes the company just requested.

    “My income has not increased 300 percent, and please don’t tell me to sell out and move out of state,” Martin said at a public hearing on the request. “We really don’t know how to go live somewhere else.”

    Wearing a T-shirt that said “I survived Hurricane Charley,” Martin was one of just five people who spoke Monday at two hearings to give feedback on the request from Florida’s largest home insurer. State Farm is also seeking an approximately 95 percent increase on mobile home policies, nearly doubling rates for about 30,000 owners.

    Brian Branton, a 40-year-old purchasing agent who made the trek from Palmetto on the Gulf Coast, said he was surprised and disappointed the meetings weren’t better attended. Only a handful of the roughly 300 seats set up in a hotel ballroom near Walt Disney World for the meeting were taken up – most of them by State Farm personnel.

    Branton said the increases would cost him the equivalent of a 13th mortgage payment.

    “That’s my driving money, that’s my spending money, that’s my hit,” he said. “That would take a nice chunk out of my day-to-day bottom line. I’d like the state to review this.”

    The rate increase figures are only averages, and will affect people in coastal areas more heavily. In landlocked Orange and Seminole counties, for example, it is closer to 13 percent, the company said.

    State Farm, which covers about one in five Florida homes, says the increase is largely due to higher costs of reinsurance – coverage bought in case insurers face enormous claims. A smaller portion of the request covers the higher cost of doing business in Florida after two devastating storm seasons and dire predictions of future catastrophe, the company says.

    Other insurers with the same concerns have been requesting large rate increases or refusing to renew Florida policies.

    If approved by state regulators, the State Farm increase would be effective Aug. 15.

    “We want to stay in Florida, we want to write insurance and we want to keep servicing those customers that we currently have with us,” said Debra Johannson, State Farm fire operations manager. “But the only way we can do that is if we can get a rate increase so we can actually pay our reinsurance bills and have the ability to pay those losses as we incur future catastrophic events.”

    Terry Bales, 63, made the hour-and-a-half drive from Palm Bay for the second meeting, which lasted only about half an hour because just two people commented for the record.

    He expressed concern that Florida insurers continued dropping policyholders, further reducing the pool of people to spread risk over.

    “If you keep reducing the number of people that are insured certainly the costs are going to go up. This rate increase doesn’t surprise me,” he said.

    In addition to the homeowner increases, State Farm is canceling about 1,500 policies held by condominium complexes, which cover roofs and other common parts of buildings but not individual units. Further, the company is dropping wind coverage for about 39,000 customers in certain coastal parts of the state, but will continue to cover other damages.

    Robert Wunderlich, a 63-year-old retired field engineer who lives in Winter Park, said he’s paid State Farm about $200,000 over 30 years of home ownership and never made a claim. He said he wants the company to carefully consider how much it changes his bill.

    “I’m asking State Farm to hold the line,” he said. “If indeed increases continue to happen, I will … have to reconsider what coverage I maintain, but I will also have to reconsider what company I maintain that coverage with.”

    As for my personal comments, even an 80% increase may not be profitable with the expected level of hurricane activity predicted for this season.

  • Randy Jackson

    Companies are in business to make money. If insuring homes in hurricane prone areas is not a money making venture for them, I would fully expect them to pull out. Companies have a duty to their customers to contain costs. To stay and pay out millions of dollars year after year is just plain bad business. Thanks for the opportunity to reply…R C Jackson

  • Steve

    You people make me sick. You seem to think companies exist for charity work. The actuaries at Nationwide and the other 10 carriers have determined that your state government will not allow them to charge you enough premiums to cover the risks associated with covering your homes. The insurance companies are not pulling out of Florida because it is a high risk state they are pulling out because your state government will not allow them to adequately charge you for the risk your homes represent.

    Companies like Nationwide do not cavalierly or thoughtlessly leave large markets like Florida because companies can only make a profit when they have customers – leaving Florida means leaving behind many potential customers.

    Smell the coffee. Your state Insurance Commissioner and Governor are putting you in a terrible position. By refusing to allow the market to set prices to adequately cover your risks your government is forcing companies to accept inadequate premiums and therefore lose money. If a company is forced to lose money or pull out what is the logical course of action? By the time you fools figure it out all of the major carriers will leave with the exception of State Farm. Than hold onto your ass because your idiotic Governor and Insurance Commissioner will have effectively created a monopoly and put itself between a rock and hard place. Once State Farm is the last big insurer standing, your state government will face the choice of losing the last large insurer willing to write coverage for your homes or conceding to State Farm’s pricing demands. If the state caves in to State Farm you will pay adequate premiums for the risks your homes represent (i.e., much higher rates than you currently pay) plus you will pay additional premiums for the exceptional profits State Farm will exact in the absence of competition (call it the monopoly bonus). On the other hand, if your state government does not concede to State Farm’s demands State Farm will bid you farewell and you will be the first state in the nation to effectively nationalize your home insurance industry, consequently you will pay for your home insurance both via the premiums the state insurance company charges and through your taxes. In the absence of competition, your state insurance company will have little incentive to be efficient; therefore, you will end up paying more for your insurance (in premiums and taxes) than State Farm would have gouged you for.

    How did you get in this mess? Your state government is not allowing the market to set the price for the risks. If you want a way out quit complaining about the companies that are leaving Florida and start complaining about your idiotic Insurance Commissioner and your jackass Governor (oh, but you did elect him didn’t you). Good luck Floridians.

  • William Lowery

    Sorry. I just can’t get over this Nationwide thing. It really burns me up.
    I can only presume that their greed is to such an extent they would sell their mothers to make money. I have been told that several other companies have also adopted this policy. So be it, send them all packing and don’t come back.

  • William Lowery

    I don’t have Nationwide for any insurance, and glad of it. It’s totally overpriced and as you can see, they can not be depended on when an emergency occurs. Personally I think Floridians should just boycott the company completely and force them to leave Florida altogether, home, health, life and vehecle. Bye, bye you A hole.

  • And now some 4-1-1 on the insurance lobby. For the current 2005 – 2006 election cycle, INSURPAC – the Independent Insurance Agents of America Political Action Committee donated $523,500 to political candidates or committees. According to the Federal Election Commission database, INSURPAC has some interesting beneficiaries, such as:

    Democratic Congressional Campaign Committee: $15,000
    Democratic Senatorial Campaign Committee: $15,000
    National Republican Congressional Campaign Committee: $15,000
    National Republican Campaign Committee: $15,000
    TOMPAC – Together for Our Majority Political Action Committee: $5,000
    Republican Majority Fund: $15,000
    PRYCE Project – Promoting Republicans You Can Elect Project: $5,000

    Florida Members of Congress:

    Members of the House Subcommittee Capital Markets, Insurance and Government Sponsored Enterprises:

    Ginny Brown-Waite (R): $3,500
    Katherine Harris (R): $1,000
    Tom Feeney(R): $2,000Other Florida Members of Congress:

    Clay Shaw (R) Chairman, House Ways & Means Committee: $7,000
    Allen Boyd (D): $2,000
    Kendrick Meek (D): $500
    Lincoln Diaz-Balart (R): $1,000Other Interesting Beneficiaries of note:

    Senator George Allen (R-VA): $10,000
    Senator Ted Kennedy (M-MA): $1,000
    Congressman Michael Fitzpatrick (R-PA): $6,000
    Senator Conrad Burns (R-MT): $7,000
    Congressman Jeb Hensarling (R-TX): $10,000

    These are just tips of icebergs, my friends. Wake up and smell the mocha lattes. The next time you pay your automobile or homeowners insurance remember that a couple of bucks will make its way to a politician. Check the records, take a look for yourself. It’s time we got the 4-1-1 on where members of Congress are getting the money for their campaign war chests. Once you follow the money trail it’s quite clear that the system is broken and needs an overhaul. Oh and if that doesn’t frost your cinnamon buns, INSURPAC spent $1.2 Million in the 2003 – 2004 cycle. Join us on 4-11, Easter Sunday 2006 – The Bloggers’ March on Washington.

  • This is a trend Bruce Sterling and his Viridian Movement have been calling to our attention for years now. They dramatize it with a nice little expressive catch phrase: “The world is becoming uninsurable.”

    The insurance industry is one of the first sectors of the economy to acknowledge the effects of global climate change, not by anything they’ve openly stated, but by the clear implications of actions like the one Lisa describes here.

    If the Viridians are correct, such effects will spread to many other sectors of the economy before long.

  • Yeah, the “gambling” insurance companies absolutely have the right to choose whether they want to offer a particular kind of insurance in a particular location (or to drivers with bad records, etc.).

    BUT the state does have oversight of the insurance industry, and I think it might be reasonable for the state to look at the history of an insurer – did they take a lot of policies in the hurricane downtime and bail when they started having to pay out – and let that inform their licensing to sell auto insurance, business insurance, etc.

    It’s the company’s right to not sell insurance, but it’s also our right to not buy other insurance from a company that bails out in the tough times.

  • What a no-brainer. Its too expensive to offer the insurance in a state so likely to be ravanged by natural disasters.

    And this is evil how? And how does this justify telling them how they conduct their own business?

  • JR

    The Sunshine State has gotten pummeled for longer than scientists have been tracking storms so this “piece of the puzzle” has never “changed”.

    Oh, but it has! With ever more quantitative studies demonstrating the link between global warming and extreme weather, the number crunchers at the insurance companies are evidently looking at a significant change in the balance sheets.

    The next step will be the state government stepping in to “nationalize” insurance. This will either hit the taxpayers or the companies who don’t get out in time. If insurance companies somehow get stuck with the bill, you can expect them to go after the oil companies and the auto industry.

    The first class-action suits against polluters will probably occur in the EU; but once they catch on in the U.S., the world’s leader in erratic weather, we can expect a litigious feeding frenzy that will dwarf the tobacco settlements. It’ll be hysterical.

  • Nancy

    Insurance companies keep forgetting that basically what they’re doing is gambling, & what they are, are gamblers. They’re betting that the odds favor them making money off XZY situation not happening. They are trying their damnedest to arrange it so that they suffer no odds, while raking in the dough. The moment they have to pay out, they cut & run, or raise the rates instead of realizing that – hey, they bet – & lost. Geico did that to me: 27 years of no claims, then a claim for $2 over their ‘minimum’, & – POW! – a 500% rate hike. I told them where they could shove it & went to a better company, but there’s a reason Geico is one of the cheapest companies around. You do get what you pay for.

    In the case of Florida, however, it might be interesting to see whether their greed would win out over their caution if the legislature told them, “Ok: no house insurance, then in FL you can’t sell ANY insurance. To do business in FL, a company has to offer a full range of insurance at reasonable rates.” I’ll bet they’d come around quick enough.