North Carolina residents who have their homeowners insurance through Farmers Insurance Group should start looking for new carriers. According to independent insurance agent Greg Reeder, Farmer’s informed its agents on Tuesday that the company would no longer be writing new homeowners’ policies in September, and non-renewal notices would go out beginning in November of this year.
Farmers media relations director, Jerry Davies, said that company executives met with the North Carolina Insurance Commissioner, Jim Long, on August 12th, and issued an official mailing to agents the following day. Spokesperson Chrissy Pearson, of the North Carolina Department of Insurance, confirmed the notification.
According to Reeder, Farmers is concerned that it could be liable for as much as $50 million as part of North Carolina’s hurricane assessment process if losses exceed the financial capability of the system.
Explains Jack Hannigan, Senior Vice President and Chief Marketing Officer at Farmers: North Carolina has three plans � Beach, Coastal and Fair. If losses exceed the financial capability of those plans, then insurers are assessed fines based on the percentage of business they have in the state at large, and specifically along the coast. Because the Beach and Coastal plans have been growing so rapidly, the risk to the company is forcing Farmers to end their business in the state.
Farmers currently represents about 1 percent of North Carolina’s homeowners insurance market. Other insurance lines (life, auto) will not be affected.