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.
Going through that right now, State Farm Claims Office has poor communications, even the local office grimaces when on the phone with them
That would be my guess.....but being that he's dumber than a rock he fits in nicely in the Senate.
It’s not Obama’s face they will fear - it will be his mother-in-law’s!
I especially love this one:
The 'vermin' are mostly located around Tallahassee...so hurricanes hit that area more often than not and USUALLY left us alone here in central florida...'til 2004.
Considering Florida’s hurricane history, I am amazed any insurance company can make money.
The laws don’t make it too risky, they make it too costly.
I’ve never understood how people expect to have a poorly-built home survive a hurricane. Of course insurance is going to be high because you have a cr@p home for the wind and water you will likely experience.
I don’t see why people complain about high insurance costs when they live in a hazardous area for the fun it provides.
No incentive needed...gov't just needs to get out of the way and let the markets function. The regular rules do not apply because government is involved neck deep in the market.
So, if we have many hurricanes during the next four years, who will they blame?
That be the same locals that refused to purchase flood insurance despite being told explicitly that homeowners doesn't cover flood damage or the locals with no insurance at all that expect you and I to foot the bill?
Insurance companies are portrayed as the bad guys despite the fact that their aggressive challenging of claims and their restrictive policies are the result of years of claims fraud. Whenever someone speaks of upgrading from the settlement, or adding an extra room with the settlement money, etc they are profiting from an insurance claim that is designed to indemnify, i.e. to make one whole again. Those profits are recovered through higher rates for everyone or stricter settlement practices, there are no free lunches.
The most significant thing that I note in this article is that Florida has a state-sponsored insurance agency.
As a note, State Farm has put one totally new roof on our house after a hail storm, repaired our windshields, and also hail damage on vehicles. We have had a second roof repaired, not replaced by State Farm.
I have no doubt about what you say. I am pointing this out to ask why SF doesn’t react in a consistent manner?
“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”
government never learns. They mandated certain health insurance rules in NY that were not economically viable and half the insurers pulled out.
Florida State Farm Homeowners are getting hosed. Charlie Crist knows it. He will support legislation to deny this company access to the car ins. market. Look at the rate comparison. Nuff said.
The “failed Obama policies”!
With Katrina, most homes were destroyed by the wind first and then the water.
State Farm & Allstate tried to weasel their way out of paying. But the law said otherwise...
The trailer has been there since 1973 in a park built by a religious community and undamaged by any hurricane. They have never filed a insurance claim.
Judge not lest ye be judged.
Perhaps that’s what they can afford at 80 years of age.
I have no problems with people getting what they can afford, but don’t expect private companies or government to pay the difference between “what one can afford” and “what one wants.”
There are much cheaper places to live than Florida for retirees, but they aren’t as nice. I’m not judging, I’m just assigning blame for stupidity.
Stupidity? Guess its easy to label a WWII vet and his disabled wife from the lofty moral heights you live in.
I haven’t said they are stupid unless they are expecting the government or insurance to insure their trailer at an artificially low cost while living in a disaster-prone area in a home easily ruined.
However, if they are such people, then I am saying such things.
The Razorberg family has had all our insurance ( except life) thru State Farm for 25+ years. State Farm was my parent’s insurance company. As a young man I really didn’t understand the differences between the various companies so I went with what my dad had.
Last year I decided to see if I could do better.
Long story much shorter - I switched to American Family and saved a couple hundred a year on our home owner’s and auto.
This is not a recommendation of Am Fam, nor is it a slam on State Farm.
The bottom line— every few years, see if you can do better. Stick with the AAA rated companies.
(I will not consider Progressive because of their politics.)
In these tough times, highly rated mutual companies are the way to go - especially with life insurance. Doing your homework online is pretty easy. Search on “insurance company ratings”
I don’t see how INTERSTATE commerce comes into effect here.
The 10th Amendment also would make this a state’s rights issue I feel.
Speaking as an actuary that works for a very major insurance company that shall remain nameless. I’d like to give a few insights to those who seem to be somewhat confused and unaware of the actual function and structure of insurance.
Number one - no insurer is required to pay every claim made by an insured. Every single day we hear some story about frivolous claims being made against the big bad insurance companies. My advice to you...read your policy. The largest insurers hire engineers and claims adjusters who have looked at thousands of claims per catastrophe. Trust me, there are processes in place and thousands of policyholders just like you who think that their claim is covered but simply is not.
Number two - insurance pricing is done on a prospective basis. This means we price your insurance policy based on EXPECTED losses for the COMING year. If you paid 1000 dollars in insurance premiums for 40 years, then you made a bet with the insurer that you were going to cost them more than 1000 dollars each year, and you lost. I’m not at all suggesting that folks should not have insurance (and many don’t have the choice to choose if a mortgage is mixed in the equation). The point is, every year you buy an insurance policy, we have priced you for the expected amount we think it’s possible for us to pay that year. Think about it. One hurricane in 10 years - that’s 1 divided by 10. Let’s say that hurricane does $100,000 damage to your house (not unreasonable for a home near the coast). That is .1 * 100,000. That equals $10,000. Tack on administrative expenses and even a moderate profit load, and you have yourself a huge insurance premium every year.
Number three - of the top 10 most costly hurricanes that have ever hit the United States (adjusted to 2008 dollars), 8 of them hit Florida. Excluding Andrew, all 8 of those occurred in the last 4 hurricane seasons. Maybe someone needs to check their statistics before they state that no hurricane has hit Florida in the past 4 years.
Number four - last but not least. This is a product of Governor Charlie Crist’s antics. He promised lower home insurance rates - no doubt to help him win a bid for VP, just like he tried to go after the utility industry. Poor judgment and bad timing, Charlie. What does this mean? SUBSIDIZATION. Those of you who may have a house in central or northern Florida, though not entirely hurricane-proof, are paying heavily for your friends who are building on the coast. Read up a bit on every rate increase that has been disapproved by Florida’s Office of Insurance Regulation in the past 2 years.
My guess - this is not the end of the insurers’ retreat...
What it means is creating a climate where business is WELCOME.
One reason there are fewer and fewer insurance companies in my state is because of the high risk. The government knows our state is at high risk but doesn’t do much to make it good for the businesses to come back.
So no, it isn’t “giving” money to someone. On the contrary, an incentive to bring businesses down to the state would be a money-saving move...every consumer of a product will benefit when there is more competition.
Ahhhhh, I was reading through this thread to see if somebody said, “Obama’s Fault.”
I’m sorry for you folks in FL. It will affect, planes, trains and automobiles (name of a movie). It will also affect Disneyworld employees.
Maybe State Farm wants a bailout from the gov’ment.
Correct me if I’m wrong, but don’t insurance carriers have a reinsurance carrier to back them up?
Look - you can’t force a private company to do something it doesn’t want to just because you don’t like it. It’s wrong.
It’s just like the government telling you you can’t eat something or smoke something or can’t do something because they deem ‘it’s good for you’.
If the economics dont support their business model they should leave. If they feel its unprofitable then they shouldn’t insure the homes. How is this different then them going bankrupt and out of business ? They’re just choosing to NOT go out of business completely.
ROFL. Now THAT would be something to see. Holy crap I’d laugh my head off.
With all due respect, a WWII vet didn’t fight so that society as a whole could support his lifestyle. At least that’s what most people all around here believe in, and, tugging at heartstrings with the whole ‘WWII vet’ and ‘disabled wife’ is unbecoming and I would bet is NOT what THEY would want.
The unfortunate fact of life is that resources are limited, economics has a set of laws, and that feelings often distort those laws tremendously (see ‘Democrat Party’). Perhaps the choice of words here was unfortunate - substitute ‘bad choice’ for ‘stupidity’ and it’s a lot milder statement, but true never the less.
Same thing with Allstate, which dumped me after 25 years of being a loyal customer.
Based on your logic then everyone should move out of Florida. Because resources are limited right? The mobile home has been in an adult religious community since the 1970’s without any damage and not a single claim. Can most say that?
No one has supported is lifestyle at all. He worked for a living and now retired still pays all his bills including his insurance premiums.
As far as being a Vet who does not deserve to be called ‘stupid’, I guess I expect you to understand that. I failed.
My logic says if you can’t afford to live somewhere don’t expect others to foot the bill for you or the government to mandate others to foot the bill for you. I’m sorry, but life is tough. As I shovel two feet of snow in front of my house I have VERY little inclination to be footing the bill for someone else to live in the nice Florida climate.
Second, being a Vet or not does not shield anyone from external observations of their behavior. You’re playing the ‘victim’ here - noone called anyone stupid because they were a Vet, YOU brought that in to elicit sympathy and justify your positions. A VERY liberal victim-playing tactic. Next thing you’ll say that unless we all pay up for your insurance some child will go hungry.
Everyone knows State Farm sucks.
They got sued in Mississippi for deliberately not paying out after Katrina and falsifying/rigging their data findings. 2 whistleblowers who worked for SF blew the case wide open. SF pulled out of MS too.
Yeah. Just what I thought. You have no idea what a hot button issue Homeowners insurance is in Florida.
Please try to keep up with regional issues before you open your piehole and grace us with your wisdom.
“Please try to keep up with regional issues before you open your piehole and grace us with your wisdom.”
ROTFL ... what I know is six major hurricanes in this decade alone pummeled Florida ... and those homeowners who voluntarily elected to own property there are somehow surprised and upset insurance rates in Florida have skyrocketed. Many so called conservatives remain ignorant of the fact companies need to charge rates appropriate for the risk they are taking on — or they leave the market.
State Farm customer for about 10 years, hail storm moved through town, everyone is getting their roofs, cars, siding repaired...SF denied me.
Got someone else to come in to replace the roof and they went to SF to reimiburse them.
RE: people who live in FL.
Why would you want to live in the dick of America anyways? Aint nothing but the fake Disney there.
As a Floridian whose homeowners insurance is currently through State Farm this news is distressing to say the least. If I am forced to go through Citizens becuae no private insurers will write policies in the State, my Insurance bill will more than double in price. Citizens didn’t run SF out because it was beating them in price that’s for sure.
“We also had Travelers. Good company to deal with. Had an adjuster out in less than a week, had check in hand four days later. Enough not only for replacement roof, but also to upgrade to 30 year shingles.”
We had Travellers. They seemed fine until we had a second claim. Then they booted us. Neither claim was extravagant. We would have gladly paid the second if they would have said they were going to terminate our policy. It was rather annoying.
The now dominant Florida Socialist homeowners insurance (Citizens Property Insurance Co.) is atrocious coverage for super-expensive prices.
America under the democrat party and democrat media yoke: a nation longing to break free.
“You dont need private home owners insurance. The gubmint will take care of you...”
As well as your mortgage...
Which is just about the same thing Crist said when he heard the news.