Effective immediately, military personnel insurer USAA said it will “significantly restrict” the number of new homeowner, fire, and renter insurance policies it sells in Florida.
USAA will only sell new homeowner or renter insurance policies for the primary residences of active military members required to move to the state pursuant to military orders.
The insurer said it will continue to underwrite a member’s primary residence in Florida, as long as it is currently insured by USAA and will underwrite one existing homeowner, fire, or renter policy in Florida for members whose primary residence outside of Florida is insured by USAA.
“We regret that we have been forced into this position, but recent legislative and regulatory actions in Florida leave no other option,” said USAA Chairman and CEO Bob Davis. “We find ourselves in an untenable insurance market, where we are not allowed to charge the appropriate amount for the risk the association bears on behalf of our Florida members. If we do not take immediate action to limit our exposure to loss, we risk jeopardizing the viability of our entire association, and the financial security of all those we serve – the men and women of the U.S. military and their families.”
According to USAA, over the past 10 years, the company has paid approximately $220 million more in Florida homeowner insurance losses and expenses than it has collected in premiums. Florida property policyholders account for 49 percent of USAA’s exposure to natural disaster risk, yet make up only 9 percent of policyholders, who pay 12 percent of USAA’s property insurance premiums.
“If the Florida insurance market becomes more rational in the future, we will most certainly reconsider our position,” Davis said.
USAA will continue to provide auto insurance, life insurance, banking, and investment products to its members in Florida, as long as the state permits it to do so.