All The Way!
Super Bowl Championships 1975, 1976, 1979, 1980, 2006, 2009?
TAB
Posted on 01/27/2009 11:28:02 AM PST by flattorney
Saying its finances are weakened, State Farm's Florida unit wants to get out of the business of property insurance in the state. The company, Florida's largest private insurer of homes and condos with 1.2 million policies, wants to keep only auto insurance, it said in a statement. Other State Farm units would still sell life, health and other financial services, it said in a statement. Under State Farm's proposal, it would phase out of the property insurance business over two years, giving existing customers time to find new coverage. If State Farm's plan is approved by state insurance regulators, that means it will no longer write the full range of property policies, including homeowners, condo, renters, boaters, mobile home, business property, commercial liability and commercial marine. State Farm cited its ``substantially weakened financial position, directly related to its inability to obtain regulatory approval of what it believes to be adequate property insurance rates.''
The Florida Office of Insurance Regulation said that State Farm's plan must still be approved by regulators. OIR has 90 days to review and approve or reject State Farm's plan. If it is approved, then State Farm has to provide 180-day notice to those policyholders that it plans to terminate. Insurance Commissioner Kevin McCarty said in a statement that state insurance regulators had been hearing for months that State Farm was considering no longer writing property insurance in Florida.
In December, the company submitted a document to regulators that outlined its plans to cut 655,000 homeowners policies in Florida by 2010.
''I will do everything within my power to protect Florida consumers from unnecessary destabilization of the insurance market that this might cause and to ensure that Florida consumers are protected and have access to insurance at rates that are not excessive or unfairly discriminatory,'' McCarty said. He noted that OIR has been working with state Sen. Mike Fasano, R-New Port Richey, to develop legislation that will significantly limit the number of nonrenewals a company can issue in a year.
State Farm Insurance of Florida's request for an average 47.1 percent rate hike was denied by the state insurance commissioner. The insurer said its analysis of its risk and projections of losses actually supported a 67 percent increase (fraudulent con job – TAB). ''Faced with steeply declining resources to cover future claims and expenses, State Farm Florida has little choice,'' Jim Thompson, president of State Farm Florida, said in the statement. ``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.''
As of Sept. 30, State Farm insured 41,563 homes in Miami-Dade County, 47,521 in Broward, 38,868 in Palm Beach and 85 in Monroe County.
TAB
State Farm hasn’t been the easiest to work with in settling claims in Fl from what I’ve heard. None the less, this will up the cost for homeowners going with other companies. Florida is getting further out of reach as a possible retirement place for me. Great deals on real estate right now though.
Thank God we moved back to Texas 4 years ago. I can't imagine trying to unload a house on the water now.
I guess timing is everything.
Reason 8,561,493 why I depise the government. This is what happens when the government won’t let a company make a profit. Good for State Farm. Maybe if a few more insurers pull out something will get done about the total idiots in government trying to tell a private company how to run its business.
It’s my understanding that Homeowners insurance companies as a whole across the country are making much better profits (margins as a %) in the last 5 years than they historically have .. There are 2 developments in Florida that PO’d State Farm ... First off the state itself is issuing insurance and secondly the state is not cracking down on an upstart based in Clearwater (pretty sure ,, working off memory) that used to sell furniture for petty infractions of the insurance codes,,, that upstart is DIRT CHEAP and does have re-insurance ... the only real downside is that in the event of a catastrophe ,, flood/fire .. whatever... they hire the contractors to fix the house ,, this limits the homeowners ability to pad the bill or work a deal to put cash in their pockets..
I hate govt intervention too, but in 2004, the year FL got hit with 4 hurricanes ( Charley, Ivan, Francis, Jeanne) my mother’s insurance company paid the highest bonuses ever. Bonuses are tied to company profits. So, clearly, the insurance companies still make LOTS of money in FL.
Every time they are denied a rate increase they threaten to pull out of the state. They will never actually go, because they make so much money here.
And if they cancel a home policy, that customer will move their cars, business, etc to the new company too. So, no. State Farm won’t actually bail. They just want their rate increase approved. 47% is crazy.
Like a good neighbor,,,,,,
Screw the regulators. If State Farm raises its rates and someone else can do better, let them try. What this really means is that insurance is not available at any price.
“Like a good neighbor,,,,,,”
State Farm ain’t there........
Wasn’t there a sinkhole issue as well as hurricanes? (Besides the usual government sinkhole)
Great to hear you were taken care of. The problem is that Wilma was the last of the major 2004-05 Florida hurricanes after not having a major hurricane since Opal in 1995. Wilma did $-billions in Florida damages that the MSM ignored because of Katrina’s LA, MS devastation. [Katrina came through south Florida as a Cat 1]. Because of the prior hurricanes with $-billions Florida claims many Wilma victims have been screwed by the insurance companies particularly State Farm.
TAB
The problem with houses/condos in Fla isn't the price, they have always been well below the norm, it's the fact that taxes and Insurance will cost you more than the mortgage itself.
After hurricane Andrew, the Florida state government let State Farm spin off the state as a separate entity. The new company, State Farm of Florida, insures only property in Florida. That way the parent company is not financially responsible in the event the Florida operation takes another big storm loss. Instead of getting an infusion of cash from the home office they have to sink or swim on their own cash reserves.
Once State Farm got the state to agree to that change they proceeded to suck Florida homeowners dry.
State Farm of Florida operates sort of like a franchise of the parent company and pays them hundreds of millions in various fees and charges. That skims the best part of any profit and cash reserves from State Farm of Florida and guarantees they will have a sick looking balance sheet at the end of every year.
Then they seek annual rate increases based on their claim that insurance rates are not high enough to cover the losses and a reasonable profit. They always claim a huge rate increase is needed to cover losses and maintain cash reserves.
As proof, they have the low balance and their sickly profit and loss statement.
Of course the reason they don't have sufficient cash reserves on hand is because they sent most of it to the parent office through the backdoor to protect the funds from possible claims from the Florida insured.
Its a neat scam that siphons profits from Florida homeowners in profitable years but leaves the company perpetually underfunded, especially in years of high damage claims.
That is one of the main reasons Florida home insurance rates have more than tripled and State Farm is still asking for another rate increase of almost 50%.
The state insurance board usually ends up acting indignant about their rate increases then ends up approving most of it.
So, let me make sure I understand this. If you are not in favor of:
“The new company, State Farm of Florida, insures only property in Florida. That way the parent company is not financially responsible in the event the Florida operation takes another big storm loss.”
Then you are in favor of the rest of the us underwriting the re-building of structures located in a dangerous area? By this logic, I could build a house here in Colorado in an avalance chute and expect full re-imbursement at a cost not commensurate with the risk I incurred.
Hurricane prone areas are risky. Risk = cost.
You missed the point entirely.
The parent company has used the arrangement to suck the Florida company dry.
The cash flows one way - The cash reserves have been going to the parent company instead of staying in the State Farm of Floida coffers to cover potential loses.
Then, when there are losses in the state that money is not available to cover them.
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