The home insurance problems facing Florida took another hit on Friday following the news that Progressive won’t be renewing about 100,000 policies.
Insurance experts said Progressive has already stopped renewing policies with this latest round of dropping policies beginning by next spring.
Progressive is performing this so-called “rebalancing” because of recent hurricanes and claims, according to insurance experts.
“They are looking for ways to reduce risk exposure not only in Florida but in other states,” Mark Friedlander of the Insurance Information Institute said.
He said Progressive almost had no choice considering how they were losing money in Florida.
“They were paying out $2.17 for every dollar collected last year in Florida for home insurance … not a very good result,” Friedlander said.
Notices of non-renewal are expected in 2024. But unlike the situation with Farmers Insurance, which just left Florida, Progressive has a deal to move many policies to a new company called Loggerhead.
Loggerhead is a new player in the Florida insurance market, based in the Tampa area.
“We’re focused on Florida,” Loggerhead CEO Jim Santo said. “It’s going to be a solid, financially sound company. We’re going to be based on customer service.”
Loggerhead has an A rating from Demotech, the firm that examines the financial health of insurers.
Santo said the company is set up as a non-assessable reciprocal exchange.
“That means the policyholders, otherwise known as subscribers, are the owners of that company,” he said.
However, Santo adds that does not mean policyholders would be on the hook to bail out the company through surcharges if claims overwhelm the company.
He said they plan to have what he calls a fair rate structure.
“I think we’ll be competitive in the marketplace, certainly they’ll be companies that are priced a little bit lower than us, and they’ll probably be companies priced a little bit higher than us,” Santo said.
Progressive customers facing non-renewals next year are not obligated to go with Loggerhead, as Friedlander explains.
“You have the right to shop it anywhere,” Friedlander said. “It’s not like the Citizens depopulation where you have to accept or decline a specific offer.”