Posted on 01/27/2009 8:44:22 AM PST by Fawn
State Farm Florida is pulling out of the homeowner insurance business in Florida, the company said this morning, in a surprise move that will leave more than 800,000 policyholders without coverage and will cause almost certain turmoil in the Florida insurance marketplace.
"Faced with steeply declining resources to cover future claims and expenses, State Farm Florida has little choice," said Jim Thompson, president, of State Farm Florida. ''This is not an action we wanted to take, but one we must take given the realities of the Florida property insurance market.
"We regret the impact this will have on our customers, employees and agents in Florida," he added.
Thompson said the plan requires regulatory review, and State Farm Florida will not begin dropping policies under the plan until that process is complete. Florida, however, has no law on the books that would prevent State Farm from leaving the state's homeowner insurance market.
State Farm Florida emphasized that it was submitting a two-year plan that seeks to limit disruptions for customers, and if approved, will allow them time to find coverage with other insurers.
State Farm is Florida's largest private homeowner insurer, second only to state-sponsored Citizens Property Insurance Co.
State Farm is also Florida largest automobile insurer with more than 3 million policies. The company says it will continue to offer auto coverage. However, a 2007 state law pushed by Gov. Charlie Crist prevents insurers from offering only auto policies if they offer both auto and homeowners in other states.
Our condos have State Farm (great- it’s going to be a bitch to get someone else), but I switched my auto to Allstate. I got $5k more in coverage for $200 a year cheaper.
Is this related to the problem with trial lawyers in Fla? I heard their medical malpractice situation is terrible.
Government competition with private business is only one step away from government takeover of private business.
“When you could get insurance at all, the restrictions would leave you without coverage in many scenarios, and the riders required to get decent coverage meant double, triple, or even quadruple what you paid only last month. It was really scary.”
Maybe the Florida insurance commission can mandate an end to hurricanes striking the Sunshine in order to stabilize prices for you ... or perhaps recognize insurance is a risk based industry that operates on a profit margin based on revenue being less than claim expenses.
Thanks, I know. I happen to be an independant agent representing several top companies.
Just recently I had a couple contact me who had applied for a LTC policy from SF. I was able to help them find a better plan with John Hancock that was less expensive.
Funny how you can’t legislate that a company MUST do business in a state.* State Farm’s actuaries informed the company that it could not make a fair rate of return in Florida, thanks in part to laws like Crist’s. So it pulled up stakes. Obviously if it COULD have made money staying in FL, without undue risk, it WOULD have.
*- Actually, about 10 years ago, San Francisco passed an ordinance purporting to bar gas stations in part of the city from going out of business (from converting the physical property from “gas station” to “something else”). See how that works? “Oh, the gas stations are switching over to Starbuckses, or just going under, and now our voters complain that they have to drive further to buy gas. So, we’ll just outlaw this gas-stations-going-out-of-business stuff. Problem solved!”
In other words, they invested premium payments that lost 30-50% of their value. Expect more insurance companies to run into trouble.
My inlaws have a $46,000 trailer on a lot in a 50 and over community in Clearwater, FL. Their homeowners insurance ended their policy and had to find another company.
The price for covering a $46,000 trailer? $3000 a year.
Now if we could get GM, Ford and Chrysler to stop selling new cars in California because they want to establish their own emission standards, we'd really be getting somewhere.
It would be very entertaining to see who blinked first.
correct but at least the national monument gets 200 million face life, ACORN receives billions, Homo groups and special interests will get money and these banks who keep saying they are broke but buy planes or fancy get aways will receive even more money and the list is endless
Not surprising. After all, Obama has criticzed the last administration for the management of Katrina. He says (on the White House website) that they will rebuild NOLA, where Bush didn’t. State Farm may as well leave it to the Feds.
great to hear that at least there is an insurance agency poiut there who will pay up when the need arises
great to hear that at least there is an insurance agency out there who will pay up when the need arises
I have a house in north east florida, St Augustine to be exact and my insurance for my house and property is just over a grand
I have a house in north east florida, St Augustine to be exact and my insurance for my house and property is just over a grand
Wow...I have homeowner’s w/State Farm (we’re in the same area.) We’re not far from the water, but in a no-evac zone. We’ve had our insurance with them for 20 years...never filed a claim. We’ve seen steep increases over the past few years, but stayed with them because when I investigated the other policies, State Farm’s was more comprehensive. Stil for our home, which has replacement coverage of over a couple hundred thousand, we pay $3600/per year so the $3000 they pay for the mobile home seems so high.
If State Farm drops us, maybe we’ll just take liability. If you don’t have a mortgage you don’t have to have insurance, and I know quite a few people who “self insure” these days. The thing about having the insurance, if a hurricane comes through, you still pay the huge hurricane deductible before you can collect any money from insurance, so self-insurance is probably just as good a deal.
Ping.
This can't be true, the global warming gore-bots decreed that global warming will cause more hurricanes and they will also be stronger and more damaging.
How dare you deny science and claim that you haven't had a hurricane in 4 years when Al Gore and his religion know better! /S
Good to know - that's who I've got.
Where's the pie...somebody ate the pie.
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