“The whole purpose of insurance is peace of mind," Progressive's non-renewal of 100,000 policies to impact real estate investors and owners of 2nd homes

As many as 100,000 Florida home insurance policyholders will be receiving non-renewal notices during the Christmas holiday season from Progressive Insurance, which says it is "re-balancing" its strategy in the Sunshine State.

The non-renewals will become effective next May, only adding to the possibilities that some homeowners could apply to state-run Citizens Insurance, which has been trying desperately to reduce their numbers.

"This is just more disruption in the Florida property insurance market," Mark Friedlander, with the Insurance Information Institute, told WINK News in Fort Myers. "Every time we see some positive steps, such as new companies being approved to start writing business, we hear from companies that want to reduce their risk and are making major changes."

Progressive, headquartered in Ohio, is one of the largest homeowner insurers in the state, making up 3.9% of the market share.

The announcement indicates the company will only insure "owner-occupied properties" in Florida going forward, will no longer provide dwelling/fire or DP3 (landlord rental) coverage, and will not be renewing certain "high-risk" property policies.

The company labeled it as "re-balancing," a move that also will cancel agreements between Progressive and certain agents who represent its company.

"The actions we're taking are necessary to ensure that we can continue to write business in Florida in a meaningful way — and we expect these actions will better position us to build a stronger, more stable, and more competitive Progressive Home business for consumers and independent agents in the long run," the company said in a statement.

Alejandro Pérez Duque, director of the PVG Insurance Group on Key Biscayne, said: "Many carriers are reducing their exposure in Florida out of prudence and with the hopes of not having to exit the state completely if they can re-balance their exposure geographically and obtain adequate rate."

He said most homeowner carriers in Florida have been operating on a precarious balance.

"A carrier that targets non-renewals selectively, but remains otherwise open in the state, is a much better option than one that exits the state completely, or worse, one that enters liquidation due to improper risk management and governance," he added.

Already, Floridians pay some of the highest home insurance in the country — around $6,000 per year on average, Friedlander has noted.

The average cost increased 42% in Florida compared with last year.

Progressive's announcement comes shortly after AAA said it would not be renewing some policies and after Farmers Insurance reported it will be completely pulling its home and auto lines from the state.

Farmers is one of three major companies that have voluntarily withdrawn from the state since last year, joining Bankers Insurance and Lexington Insurance, a subsidiary of AIG.

At least 11 insurers in Florida have declared insolvency since 2017.

Pérez Duque is concerned that more insurers could follow, given the high re-insurance costs and claims activity in the state.

"That is why it's so important to look at the AM Best Ratings of carriers to confirm their strength and stability," he said, "because the whole purpose of insurance is peace of mind."

If there is a bright spot to all this, Tampa-based Loggerhead Reciprocal Interinsurance Exchange, which has a Financial Stability Rating of "A Exceptional," has entered into an agreement with Progressive to offer replacement policies to those not being renewed by the company.

According to data from the Insurance Information Institute, the cancellations impact some 47,000 DP3 second residences policies and 53,000 "high-risk properties."

In early 2022, Progressive announced it was dropping some 56,000 homeowners' insurance policies in Florida, specifically for homes with roofs older than 15 years to align with its 2021 guidelines.

Progressive said it still will be insuring more than 200,000 Florida homes.

For the complete Progressive statement, click here.