State 'Harm' At It Again....

According to a story in the St. Petersburg Times back in July of this year, State farm wants to cut back or eliminate all its discounts for homeowners insurance in Florida, in an effort to "remain solvent" as the company gradually withdraws from the state's property insurance market. If State farm gets its wish then you will not get any discounts for mitigating their homes against storm damage, for remaining claims free as long time State Farm policyholders, and for having multiple policies. So now, what incentive do you have for lumping all your policies with them? None.

State Sen. mike Fasano, R-New Port Ritchey, called the filing an "outrageous" way of "going around the law" to raise premiums without a formal rate increase. Here's his best quote; "The insurance companies always seem to find a way to help themselves and neglect the homeowner". Amen. He was told the average State Farm policyholder may have to pay 40% to 44% more for property coverage until State farm withdraws from the state. That's what I like about these insurance companies, they want to insure you against anything that has a high premium but a low risk of payout. They'll sell you car insurance but forget about insuring your home against a hurricane or fire. State Farm is claiming that they spend $2 on claims and expenses for every dollar in premiums brought in. Gee, wonder why they ever got in the insurance business if that's the case.

State farm was among the leading advocates of a change in the state law that allowed discounts for those with home and auto policies. I guess they figure now that they have your car policy they'll drop the risky homeowner policies. Regulators rejection of State Farm's initial request for an average 47% rate hike triggered the company's decision in January to stop selling property insurance in Florida. State farm wants to drop about 1.2 million policies over the next two years, 700,000 of them covering homeowners. Way to go State Farm! And you are still with them because...??

On July 28, 2009, even the liberal St. Petersburg Times wrote an editorial blasting State Farm's request. Their best comment was pretending to be State farm saying, "We don't care if you have been loyal or invested thousands of dollars to mitigate hurricane losses after the state required premium discounts in return. Just give us more money before we drop you."

Oh, remember when I said that State farm was complaining that they pay out $2 for every dollar they take in from premiums? Well, the Times points out one small fact...State Farm's national operation reported $5.5 billion in profits last year. AND, Florida was NOT one of the top five states for claims payments! (In case you are wondering, the top five states for pay-outs for property losses are, in order of largest claims: -Texas -Louisiana -Minnesota -Ohio -Georgia. ) And their final comment: "If State Farm Florida needs more cash before it flees the state, it should get it from its parent company rather than gouge its remaining policyholders here."