State Farm Pulling Out of Florida

[Russ]

Got this from the NW FL. Daily News.....

State Farm plans to discontinue property coverage in Florida | state, farm, florida - News - Northwest Florida Daily News

Here's the official letter from State Farm...http://video.onset.freedom.com/nwfdn/ke53tr-statefarm.pdf

 

[moonlightandmargaritas]

No surprise, they've been threatening for a while.

The moronic politicians in Tallahassee didn't believe them...

 

[SportsNut]

How does any casualty company make money in FL insuring homeowners...?

 

[InsuranceGuru]

That's not surprising. I can't think of an insurer in Florida that ISN'T pulling out of offering Homeowner's Insurance. Either that, or they raise rates way beyond what anyone could afford. Then, even if someone is insured in Florida, the chances of receiving full reimbursement for repairs to the property (if it's even insured to full value) are slim. I can't imagine the list of exclusions that insurers will try to use to mitigate the costs.

The situation in Florida is bad. It won't get any better for Louisiana, Mississippi, or Alabama either after seeing what happened with Katrina. Reinsurance FTW, or in this case, the loss.

 

[moonlightandmargaritas]

Either that, or they raise rates way beyond what anyone could afford.

Actually the problem is that some rates are not high enough.

Rates for coastal risks are being propped up by the inland folks, and rates are artificially low for those coastal risks.

Of course the politicians, being the cowards that they are, won't support sound rates, bowing to "political pressure". If they would quit messing with it, the free and open market will solve the problem.

If you choose to live in an eight million dollar oceanfront property, and choose to insure it, you should pay a premium comensurate with the risk, no?

 

[Crabcake Johnny]

What's the impact if you're a FL State Farm franchise owner?

 

[djs]

Interesting...
If State Farm is smart, they will do like Allstate did, allow their agents to write their homeowners business with other carriers, which allows their agents to stay in business, and only leaves a small bad taste behind...

Otherwise, there will be 826 new independent agents in Florida very soon.

Dan

 

[moonlightandmargaritas]

Interesting...
If State Farm is smart, they will do like Allstate did, allow their agents to write their homeowners business with other carriers, which allows their agents to stay in business, and only leaves a small bad taste behind...

Otherwise, there will be 826 new independent agents in Florida very soon.

Dan

Dan, their agents will stay in business very nicely from just auto if they have to.

State Farm hasn't been taking new property business for a long time!

 

[djs]

Yes, but...
On a lot of the auto business, they will lose the auto/home discount which will make it vulnerable to other companies.

In the P&C world, homeowners policies tend to be pretty stable, good source of renewal income. It will be a heavy hit to the agent to lose their homeowner policies. In California, Allstate didn't pull out, but they stopped writing new homeowners business and had a premium increase on the home policies. The agents went ballistic, Allstate let the agents place homes with other companies till they reenter the market.

I know if you told me that I had to give up my homeowners book of business, I would pack up and go work at McDonalds for a while. I'd make more money. Okay, maybe not really, but it would be very hard to be motivated for a while.

Dan

 

[bobson]

What we really need is for the feds to step in so instead of spreading the risk out to just the citizens of Florida, those dumb people in Idaho, Montana, North Dakota can subsidize the rates of the dumb rich people that build homes on the coast of Florida. Why should somebody in North Dakota only pay $500 for insurance on a home worth $150,000 when those poor souls in Florida have to pay such high premiums on their million dollar homes. It's just not fair to the folks in Florida.