Editorial: Florida home insurance crisis getting no better

It's the same old unfortunate tune.

Except this new version of Florida's property insurance troubles has some headline acts.

Two big insurance firms — Farmers Insurance Group and American International Group (AIG) — are pulling back on their Florida policy writing.

Farmers won't write new homeowners policies in Florida.

"With catastrophe costs at historically high levels and reconstruction costs continuing to climb, we implemented a pause on writing new homeowners policies to more effectively manage our risk exposure," Farmers said in a statement.

The pause only applies to Florida, according to a spokesperson for the Los Angeles-based insurer.

New York-based AIG is also pulling back on its property insurance underwriting, according to various reports.

"Per company communications, AIG plans to limit its coverage to higher-value properties in approximately 200 ZIP codes across the United States, with a specific emphasis on Florida, which has previously experienced another reduction in insurance writing from AIG," according to The Capitolist in Tallahassee.

Farmers and AIG are two more additions to the number of insurance firms that have pulled up stakes or pulled back on their Florida property insurance.

That includes State Farm and Allstate.

One of the goals of the insurance-industry-backed changes passed by the Legislature earlier by Gov. Ron DeSantis and GOP lawmakers was to create a climate where more insurers enter the Florida marketplace.

The Farmers and AIG pullbacks are big blows to that effort and signals to Floridians that the bleeding has not stopped.

Again, that's a repeat of past hurricane seasons when big storms took their financial tolls. Last year, Hurricane Ian took 152 lives and caused $113 billion in damages — mostly in southwest Florida, according to the National Oceanic & Atmospheric Administration. Hurricane Nicole caused $481 million in damage, according to Moody's Investment Service.

Like past storm seasons, if Florida gets hit by major and costly storms, the end result feels like the same. Insurance companies pulling out or going under.

Some homeowners and small businesses are still battling with insurance carriers over damage from Hurricane Ian.

Other property owners are receiving cancellation notices or significant premium increases. The 'reforms' passed earlier this year aimed at reducing Florida's high volumes of insurance litigation will take a while to make an impact lawmakers have stressed.

Unfortunately, trust levels for the insurance industry and elected officials' ability to (or willingness) to address the problem confronting so many Floridians is low.

State officials continue to try to reduce the insurance marketplace's reliance on Citizens Property Insurance Corp. The state insurer of last resort is increasingly the only resort for many property owners. To be honest, it's the only viable option for many of our fellow Floridians.

The Legislature wants to make sure Citizens doesn't hold too much of the market. State overseers of Citizens' also want to bring its premiums more in line with private insurers.

The state board that runs Citizens is looking at a 12% premium hike for policy holders after Ian took a bite out of the property insurance group's reserves.

Meanwhile, the insurance industry benefits from state mandates for car insurance in Florida and across the U.S. That has created a $64 billion industry (just for car insurance), according to research firm IBIS world.

Perhaps, we need a broader look at the insurance industry, and consider tying a mandate to insurers that if they want to participate in the lucrative auto insurance business here they need to dip their toes in homeowners insurance also.

Without some bold move (to borrow from an old rock song), the song remains the same.