Farmers Insurance will no longer offer home, auto and other policies in Florida under its main brand and has also restricted new policies in California, while AAA will also not renew the auto and home insurance policies for some customers in Florida. 

Around 100,000 Florida policies under the primary Farmers brand will be affected, according to US media, while AAA says its decision affects "a small percentage" of policy holders. 

Under local law, companies are required to give three months' notice to the Office of Insurance Regulation before they tell customers their policies won't be renewed. 

"We have advised the Florida Office of Insurance Regulation of our decision to discontinue offering Farmers-branded auto, home and umbrella policies in the state," Farmers spokesman Trevor Chapman said in a statement. 

"This business decision was necessary to effectively manage risk exposure. 

“Affected customers will receive notifications detailing when their coverage will end and will be advised of options for replacement coverage.” 

It comes after AIG, Allstate and State Farm all stopped taking on new customers in California, saying that wildfires are driving up the costs of underwriting policies. 

Bankers Insurance and AIG subsidiary Lexington Insurance left Florida last year, saying recent natural disasters have made it too expensive to insure residents.  

Hurricanes Ian and Nicole devastated Florida in 2022. Insurance Information Institute's spokesman Mark Friedlander says the III estimates Hurricane Ian to be a $US60 billion ($88 billion) insured loss event, while replacement costs for homes has increased 55% over three years. 

Homeowners in Florida pay about $US6000 ($8774) or three times as much for insurance coverage as the national average, and rates this year are expected to jump around 40%. The III says property and casualty insurers have not collectively earned profits in Florida since 2016. 

AAA says the catastrophic 2022 hurricane season contributed to an unprecedented rise in reinsurance rates, making it more costly for insurers to operate. 

“AAA, like all other providers in the state, are forced to make tough decisions to manage risk and catastrophe exposure,” it said. 

Florida CFO Jimmy Patronis, who oversees the insurance regulator, said he had “asked my team to put their heads together in holding Farmers Insurance accountable”.  

“I want additional scrutiny on this company,” Mr Jimmy Patronis said on Twitter. 

In California, 2018’s Camp Fire destroyed 11,000 homes in the state and was the costliest single natural disaster in the world for insurers that year, Munich Re said, resulting in $12.5 billion ($19.17 billion) in covered losses.  

Afterwards, insurers could not cancel or refuse to renew residential property policies during a mandatory one-year moratorium that covered more than 800,000 policies.