USAA Cuts Back On Fla. Home Policies

USAA Group will cut back on writing new policies in Florida and begin nonrenewing 27,000 policies on second homes in the state, the company said.

The move by the San Antonio-based carrier, the fourth-largest home writer in the state, will mean a virtual halt to all new home policy writing by USAA.

USAA Chairman Robert Davis said the actions of Florida' regulators prompted the cutbacks.

"Florida politics have severely restricted USAA's ability to charge adequate property insurance rates for the risk the association bears on behalf of its Florida's members," he said.

He noted that over the past 10 years, USAA has paid about $220 million more in Florida homeowner insurance losses and expenses than it has collected in Florida homeowner premiums.

Florida policyholders account for 49 percent of USAA's exposure to natural risk, yet make up only 9 percent of its shareholders, Mr. Davis said.

Last September, Florida regulators rejected a 40 percent rate increase sought by the company. In December, the company agreed to a 16 percent hike.

Yesterday, the company said that was no longer adequate.

From now on, USAA said it will write only new homeowners policies for active military members required to move to the state. And in 90 days, it will stop renewing the policies of 10 percent, or roughly 27,000 customers who maintain second homes in Florida.