Farmers Insurance, the second largest home insurer in the state, will stop renewing all homeowners policies in November. It is a change that's leaving about 11,000 Lubbock County homeowners looking for new coverage.
Farmer's decision to cancel their homeowners insurance affects 700,000 homeowners across the state. Farmers was sued last month for over charging customers, but they deny any wrongdoing. They say the reason for dropping the coverage is just the opposite, they can't afford to stay in the business, due to numerous black mold claims. Leaving customers asking what's next for them.
"I just got Farmers' Home Owners Insurance and they assured me I'd be covered for a year," said Doug Morris, a Farmers Carrier.
He's one of the lucky ones, others have more immediate concerns. "I'm concerned as to why it happened when I was told a few months ago that it wasn't a problem," said Belynda Godfrey, a Farmers Carrier.
"I do plan to call my agent to find out what our options are whether or not we can be rolled over into another policy or what or how that's going to effect everybody," said Gena Godinez, a Farmers Carrier.
One effect is being felt at local independent agencies. "The first 15 calls we got this morning have been from people that are farmers carriers," said Steve Fanin, CEO of Cam Fanin Insurance. Fanin says the news of Farmers pulling out wasn't a surprise. "Insurance is a free market product, you cannot go year after year and lose money and be happy." Fanin adds that no one needs to panic, just sit back unless your policy expires in the next few months.
The Texas Department of Insurance says Farmers decision is a tremendous disservice to its policyholders and loyal agents who will suffer economically, the TDI says policyholders should know farmers can not cancel your policy mid-term. It must wait until your policy's anniversary expiration date to "non-renew". The TDI says other companies have more than ample capacity to absorb the policyholders that farmers drops.
However, Steve Fanin says the Farmers policy holders will be difficult to absorb. "The independent agencies in Lubbock, Texas with the companies I know that most agents represent do not have the capacity to handle the 11% of the homeowners market that's represented by Farmers group," says Fanin.
The bottom line is unless you policy expires in the next few months you have time to make a decision. There's even a chance that you won't have to make a change. Farmers Insurance says if they can reach an agreement with the Texas Department of Insurance they'll reverse the decision, but for now this is their only option.