Haris Ashley
Progressive Insurance is one of the largest property insurers in Florida, serving more than 200,000 Floridians and their homes. However, in 2022, the company stopped writing new home businesses across all Florida counties and began non-renewing thousands of home insurance policies in the state. Progressive's decision to non-renew policies in Florida has impacted a significant number of homeowners and raised questions about the stability of the state's insurance market. The company has stated that these actions are necessary to ensure its long-term viability in the state, but critics argue that it shifts the burden onto homeowners who already face challenges with insuring their properties.
| Characteristics | Values |
|---|---|
| Number of non-renewed policies | 100,000-115,000 |
| Type of policies non-renewed | DP3 (dwelling/fire) and other "direct and agency property" policies |
| Type of properties affected | High-risk properties, secondary residences, homes with older roofs |
| Replacement coverage provider | Loggerhead Insurance/Loggerhead Reciprocal Interinsurance Exchange |
| Number of policies non-renewed in 2022 | 56,000 |
| Reason for non-renewal | Rebalancing exposure, Florida property being a large part of their business, stabilizing the insurance business environment |
| Future plans in Florida | Continue to insure more than 200,000 Floridians and their homes |
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What You'll Learn
Progressive is not leaving Florida
Progressive Insurance has confirmed that it will not renew some homeowners' insurance policies in Florida. The company has begun the required regulatory filings and will send out its first non-renewal notices in December 2023. The first non-renewals will go into effect in May 2024, just before the start of the 2024 Hurricane Season, and will continue on a rolling 12-month basis. Progressive estimates that about 100,000 policyholders will be affected, which is 50% of its current policies in Florida. The company will no longer provide dwelling/fire or DP3 coverage and will non-renew certain "high-risk" property policies.
Despite these changes, Progressive has stated that it is not leaving Florida and that Florida property remains an important part of its business. In a statement, the company said, "We have no plans to leave the state, but we have been working collaboratively with state officials and the Florida Office of Insurance Regulation to implement changes that allow us to rebalance our exposure while continuing to serve Florida homeowners." Progressive also noted that it is encouraged by the work of Florida state officials to stabilize the insurance business environment and attract new carriers to the market.
The company's decision to non-renew some policies is part of a larger trend of insurance companies reducing their risk and making major changes in the Florida market. Progressive's underwriting results in 2022 were among the worst of any insurer operating in Florida, with the company paying out $2.17 in claims for every dollar of premium collected. Additionally, Florida lawmakers have passed property insurance reforms meant to stabilize the market and keep insurers in the state. Progressive's decision to non-renew some policies is intended to reduce its risk and position the company for long-term stability and competitiveness in the Florida market.
While the changes may be disruptive for affected homeowners, Progressive has agreed with Loggerhead Reciprocal Interinsurance Exchange to offer replacement policies to those who qualify under its financial and underwriting standards. Additionally, Mark Friedlander of the Insurance Information Institute has stated that there will be other options available for homeowners, as five new insurers are expected to enter the Florida market by next spring.
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Progressive is dropping 100,000 policies
Progressive is dropping 100,000 home insurance policies in Florida, with the first wave of non-renewal notices going out in December 2023. This decision affects DP3 (dwelling/fire) policies and other "direct and agency property policies". The company did not initially disclose how many policyholders would be impacted, but research from the Insurance Information Institute estimates that about 100,000 policyholders, or 50% of its current policies in Florida, will be affected. Progressive plans to cancel 47,000 DP3 policies, which generally apply to secondary residences, and 53,000 "high-risk properties".
This move by Progressive is part of a rebalancing strategy in Florida, where the company is no longer providing dwelling/fire or DP3 coverage and non-renewing certain "high-risk" property policies. Progressive's underwriting results in 2022 were among the worst of any insurer operating in Florida, with a claims payout ratio of $2.17 for every dollar of premium collected. The company has also stopped writing new home business across all Florida counties in 2022.
Despite these challenges, Progressive has stated that it remains committed to the Florida market and has no plans to leave the state. The company is working with state officials and the Florida Office of Insurance Regulation to implement changes that will enable them to continue serving Florida homeowners. Progressive has also identified a current property carrier, Loggerhead Reciprocal Interinsurance Exchange, to offer replacement policies to impacted policyholders.
Affected policyholders have until May 2024, just before the start of the hurricane season, to find alternative coverage. With Progressive's decision, Florida homeowners are facing challenges in finding affordable and reliable insurance options. This situation highlights the ongoing "`property insurance crisis`" in the state, where providers have been leaving or reducing their exposure, impacting the availability and cost of insurance for residents.
Homeowners whose policies are being dropped by Progressive should actively seek alternative coverage options. They can explore offers from Loggerhead Reciprocal Interinsurance Exchange or consider other insurers entering the Florida market. By shopping around and comparing coverage, deductibles, and premiums, homeowners can aim to secure the most suitable and affordable insurance protection for their properties.
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Progressive's non-renewal reasons
Progressive Insurance, one of the largest property insurers in the country, has decided not to renew around 100,000 home insurance policies in Florida. This decision, termed as a 'rebalancing' act, is expected to impact about 50% of its current policies in the state. Progressive has stated that it is taking these actions to continue writing business in Florida meaningfully and to build a stronger and more stable Progressive Home business.
The non-renewal reasons cited by Progressive include the need to rebalance its exposure in the state. Florida's insurance market has undergone significant changes in recent years, with new laws and insurance companies entering or exiting the market. Progressive's underwriting results in 2022 were among the worst of any insurer operating in Florida, with a claims payout ratio of $2.17 for every dollar of premium collected. The company also stated that Florida represented too much risk and was heavily weighted in its total portfolio of home insurance across the US.
Progressive's non-renewal actions include discontinuing dwelling/fire or DP3 coverage and not renewing certain 'high-risk' property policies. DP3 policies typically deal with secondary residences, and 'high-risk' properties are those with a higher likelihood of incurring damage or filing claims. Progressive's decision is expected to impact about 47,000 DP3 policies and 53,000 to 56,000 'high-risk' property policies.
While Progressive has not provided specific reasons for non-renewing individual policies, there are several potential factors that could contribute to their decision. These may include changes in the risk profile of the insured property, filing too many claims, a drop in credit-based insurance scores, or the company's assessment of the overall risk associated with operating in a particular state.
Affected policyholders will have until May 2024, before the start of the hurricane season, to find replacement coverage. Progressive has stated that Loggerhead Insurance, based in Tampa, has agreed to offer replacement policies to those impacted by the non-renewals.
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Replacement policies for affected customers
Progressive has confirmed that it will not be renewing some homeowners' insurance policies in Florida. The company has cited the need to "rebalance" its exposure in the state, with about 100,000 policyholders expected to be affected. Progressive has stated that it will continue to insure more than 200,000 Floridians and their homes and has no plans to leave Florida.
For affected customers, Progressive has announced that it has entered into an agreement with Loggerhead Reciprocal Interinsurance Exchange, a current property carrier, to offer replacement policies. These replacement policies will be subject to the underwriting and financial standards of Loggerhead. Mark Friedlander of the Insurance Information Institute has emphasized that those impacted are not obligated to accept the offers from Loggerhead and can explore other options. There are five new insurers entering the Florida market, providing additional choices for homeowners seeking coverage.
It is important to note that the replacement policies offered by Loggerhead will likely have different terms and conditions from Progressive's policies. Affected customers should carefully review the details of the replacement policies, including coverage limits, exclusions, and endorsements. Understanding these factors will help customers make informed decisions about their insurance needs and ensure they have adequate protection.
Additionally, customers should be aware of the differences between replacement cost coverage and actual cash value coverage. Replacement cost coverage pays for the current prices of repairing or replacing a house and personal property, providing more comprehensive financial protection. On the other hand, actual cash value coverage considers depreciation, resulting in a lower payout. While replacement cost coverage is generally more expensive, it ensures that customers can restore their homes and belongings to their pre-loss condition without incurring additional costs.
To ensure they obtain the best replacement policies, affected customers are advised to seek multiple quotes from different insurance providers. By comparing various options, customers can find the most suitable coverage for their specific needs and budget. It is also recommended to review the replacement cost coverage details, including the factors considered in calculating the replacement cost and the specific items covered under the policy.
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Florida's turbulent insurance market
Florida's insurance market has been turbulent in recent years, with several carriers exiting the state or reducing their operations. The primary reasons for this turbulence include the risks associated with hurricanes and extensive litigation, which have resulted in increased costs and reduced choices for consumers.
In October 2023, Progressive, one of the largest property insurers in Florida, announced that it would not renew around 100,000 homeowners' insurance policies in the state. This decision affected about 50% of its current policies in Florida, including 47,000 DP3 policies and 53,000 high-risk property policies. Progressive cited the need to rebalance its exposure in the state and ensure it could continue to operate in a meaningful way. The company also stated that it had no plans to leave Florida and would continue to insure more than 200,000 Floridians and their homes.
The Insurance Information Institute reported that Progressive's underwriting results in 2022 were among the worst of any insurer operating in Florida, with a claims payout ratio of $2.17 for every dollar of premium collected. However, the Institute also noted that Florida had implemented legislative reforms that were stabilizing the insurance business environment and encouraging new carriers to enter the market. These reforms included the 2022 property insurance reform bill signed by Governor Ron DeSantis, which aimed to stabilize the market, increase competition, strengthen consumer protections, reduce litigation, and prohibit the use of assignment of benefits for policies issued after January 1, 2023.
Despite these efforts, Florida's insurance market continues to face challenges. Consumers are dealing with increased premiums, reduced choices, and worsening terms and conditions. Additionally, reconstruction costs in Florida increased by 4.2% to 5.1% between October 2023 and October 2024 due to supply chain issues and labor shortages, further impacting the affordability of insurance and housing in the state.
In 2023, Governor DeSantis announced rate reductions for Miami-Dade County and statewide decreases in auto insurance rates, with companies like GEICO, State Farm, and Progressive reducing their premiums by 10.5%, 6%, and 8.1%, respectively. The Governor also highlighted the entry or expansion of 11 insurance companies in the Florida market, indicating renewed confidence in the state. These reforms have led to increased competition and better options for consumers, with nearly 75% of homeowners in Miami-Dade benefiting from lower premiums.
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Frequently asked questions
Yes, Progressive does sell homeowners insurance in Florida. However, Progressive has stopped writing new home businesses in 2022 across all Florida counties.
Progressive has no plans to leave Florida and will continue to insure more than 200,000 Floridians and their homes. Progressive is working with state officials to implement changes that allow them to rebalance their exposure while serving Florida homeowners.
Progressive will not be renewing some homeowners insurance policies in Florida. The company has begun sending non-renewal notices, and the first non-renewals will go into effect in May 2024. Progressive has also stopped writing new DP-3 policies in the state.
