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Insurers dumping policies in hurricane zones

Thousands of Florida home owners are trying to replace their homeowner insurance policies after Nationwide Insurance announced it is canceling 39,000 more policies, mostly in Florida’s hurricane belt.

In dumping its customers, Nationwide is reportedly reducing its personal property exposure in Florida by 18 percent.

Nationwide has dropped more than 50,000 policies in the last two years, following massive claims in the wake of the 2004 and 2005 hurricane seasons.

Florida officials say they are powerless to prevent policy cancellations and note that Nationwide is not alone in cutting off its customers. State Farm and Allstate have also recently reduced the number of policies they maintain in the state and elsewhere along the Gulf Coast and Atlantic Seaboard.

As for the companies, they maintain they are caught between increasing risks and tighter rate regulation. A Nationwide spokesman notes the Florida legislation’s insurance reform law, passed earlier this year, is part of a new challenging environment for insurance companies doing business in the Sunshine State.

Even with the new law, however, Nationwide this year was granted permission to raise insurance premiums an average 54 percent state wide – eventually reduced to a 45 percent increase by an arbitration panel.

Nationwide said it will emphasize its less risky auto and commercial casualty lines in the state.

Referred from: (http://www.consumeraffairs.com)