NEW YORK (CNN/Money) - Still reeling from last year's hurricane season, Allstate Insurance said it will not renew about 100,000 insurance policies in Florida and plans to gradually discontinue most commercial property coverage in the state.

Also, Florida policy holders should expect to see their rates rise over the next year because Allstate needs to pay for a new reinsurance policy to guard against future hurricane damages, the company said this week.

An advocate for the insured blasted the move.

"Insurance is there to protect people 365 days a year," said Robert Besserman, president of Consumer Protection, a public adjuster firm in Boca Raton. "As long as the insurance premiums are being paid, I don't think the insurance companies should pick and choose when they're going to protect people. If they start picking and choosing when they're going to provide insurance, I think that would border on fraud."

Allstate Floridian, a subsidiary of Northbrook, Ill. insurance giant The Allstate Corp (down $0.20 to $57.19, Research)., said about 12.5 percent of its 758,000 policy holders will no longer be covered by the company after their policies expire. The company said it reached an agreement with the Universal Insurance Company of North America, a subsidiary of the Universal Insurance Group, to pick up the policies.

Audrey Sumrall, director of legislative and cabinet affairs for the Florida Office of Insurance Regulation, said that Universal Insurance Company was in "good standing" with the state.

Sumrall said that Allstate had suffered "significant losses due to hurricanes" and was in "worse shape" than other insurers because it was not covered by reinsurance before the hurricanes swept through the state last year.

"Allstate had to make a business decision," said Sumrall.

Also, Allstate said it is filing a plan with the Florida Office of Insurance Regulation to "gradually discontinue" its commercial property lines of business in the state and will provide notice to about 16,000 affected policy holders.

"In light of the financial challenges caused by the unprecedented 2004 hurricane season, Allstate Insurance Company has re-examined its commercial insurance operations in Florida," said Phil Lawson, president of Allstate Floridian, in a prepared statement released Wednesday. "Based upon that examination, Allstate has decided to limit its commercial insurance operations to the commercial auto business."

Citing the damage caused by the state's four hurricanes in 2004, Allstate said it purchased a two-year reinsurance program to brace itself against the 2005 hurricane season. The reinsurance program protects the company against more than $800 million of future losses in one year or $1.6 billion of losses over two years, in excess of any losses covered by the Florida Hurricane Catastrophe Fund.

Allstate said it will need to increase rates "in order to afford the cost of the reinsurance and other costs of doing business." The parent company said it will make up to $375 million of additional money available to Allstate Floridian for one year.