Nationwide Insurance Co. of Florida plans to reduce its personal lines property exposure in the state of Florida by nonrenewing 60,000 homeowners policies across the state.
Nationwide said that Tower Hill Group, a Florida based homeowners insurance company, has agreed to consider writing many of the dropped policies.
Nationwide’s nonrenewals are scheduled to start in July 2010 and would not affect any customers during the 2009 hurricane season.
The Florida Office of Insurance Regulation (OIR) confirmed that the insurer has filed its nonrenewal plan with the state as required by law.
While Tower Hill Insurance Group has agreed to assume the policies, policyholders will have a choice whether to insure with Tower Hill or seek another insurer.
The Tower Hill Group includes Tower Hill Select Insurance Co., Tower Hill Prime Insurance Co., Tower Hill Preferred Insurance Co., Omega Insurance Co., Hillcrest Insurance Co. and Royal Palm Insurance Co.
After its 60,000 nonrenewals, Nationwide said it will still have more than 275,000 total policies in Florida, including 45,000 personal lines property policies. The others include auto and boat policies.
“This is a difficult business decision, but Nationwide must make tough choices now to make sure they can be here for our customers in the future,” the company said in its statement.
Meanwhile, the state is still trying to work out the details of a withdrawal from the home insurance market sought by State Farm Florida, which says it wants to leave because it has been denied rate hikes it needs. An administrative hearing on that dispute is now set for Nov. 17.
State Farm has been granted backdoor rate relief, however, in the form of being allowed to discontinue some policyholder discounts. OIR has approved a State Farm filing to eliminate discounts ranging from 5 to 20 percent for having more than one policy with the company, for installing home alert systems and for not having filed a previous homeowners claim. The overall premium impact of of this decision is 28.4 percent, according to the OIR.
Insurance Commissioner Kevin McCarty has raised the possibility that this relief from discounts might convince State Farm to reduce its exposure and not leave the market entirely.
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