Skip to comments.State Farm pulling out of Florida
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.
Well, we all know that President Obama can just give any future oncoming hurricaines a dirty look and they’ll simply disperse in fear.
Now you are jinxed.
“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.”
A big part of any private business’s problems like insurers are the bureaucrats and politicians ... these are people too stupid to recognize economic realities and are just as likely to mandate a repeal of gravity if they think it will get them a vote.
So will that equate with a rate reduction? /sarc/
You don’t need private home owner’s insurance. The gubmint will take care of you...
I wonder if a law preventing it’s citizens from buying car insurance from State Farm if State Farm isn’t selling home insurance would pass muster with the interstate commerce clause.
If I lived in Florida, I would be pretty upset if the government restricted my access to car insurance.
Of course, I’d also be upset that I was losing my homeowners insurance because of laws that make it too risky for the insurance company to operate in my state.
Sounds like a similar situation in my town last year. Started having a series of earthquakes, several a day, for a couple of months. The insurance companies tried to shut the door on earthquake riders on their homeowner’s policies. The state said “oh no you di-uhn’t!”. The insurers ended up making money—the earthquakes subsided as quickly as they came.
State Farm sees the handwriting on the wall.
They want to be in business 2-3 years... 2-3 months... down the line.
Be interesting to know more of the dynamics of this statement. The state sponsored insurance may have driven SF out of the market. Such is the life of socialists.
LOL, oh my eyes, I can just see it now.
But hurricane W hit the stock market, and that's where insurers make or lose money. They have to make up the money somehow.
Isn't Senator Bill Nelson, as a former Insurance Commissioner, the culprit to our home insurance problems???
How many SF agents will now be scrambling for there next gig. I feel sorry for the bloke who put 10-15 years in at SF, and now suddenly has to start all over again with AFLAC or Allstate or some other crappy company.
State Farm has a history of using this tactic. I caught by that in Texas once.
Never again will I buy insurance from State Farm, regardless of how cheap they may offer it.
Obama has neutralized Karl Rove's hurricane making weather machine for now.
How is this a surprise? Florida regulations/constraints prevent State Farm from getting an adequate return given the risks. Who can blame them for leaving?
Very true...although Fay did a ton of damage over central Florida when she stalled out for over 3 days right off our coast...I think she reached Cat 1 status over Lake O and will be revised as such.
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