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State Farm Bans New Homeowner Policies, State Could Pick Up Risk

February 25th, 2008 by flanews

The largest private property insurance provider in the state will stop writing new home owner policies and continue to cut high risk houses. Friday, State Farm announced it will no longer write new policies, creating less competition and a statewide burden. As Whitney Ray tells us, with State Farm scaling down, more people will turn to state run Citizens Insurance, which could mean all Floridians, will pay more.

Hear it here: State Farm Bans New Homeowner Policies, State Could Pick Up Risk

In the mist of an already turbulent insurance market, one of the states top providers will scale down. State Farm will no longer write new home owners policies. The company is also in the process of dumping 50,000 coastal properties, which concerns regulators.

Commissioner McCarty is disappointed in the news. He thinks its bad news for the state of Florida, said Office of Insurance Regulation spokesman Ed Domansky.

The scale down comes as a senate committee investigates rival company Allstate for raising rates when prices were supposed to drop. Allstate is being raked over the coals by the state and could face charges. A State Farm spokesman said that had no affect on their decision. Once known as the insurer of last resort, Citizens Insurance may end up with some of the coastal properties State Farm will abandon, raising legislative eyebrows.

That just adds to the risk that the citizen and taxpayers in the state of Florida would have to face, said state representative Curtis Richardson.

If major hurricanes hit Florida, all policy holders in the state would pay an increased assessment fee to Citizens. Homeowner Rosemary Rauch said she already pays too much for people living on the coast.

If you can afford to live on the coast, and who wouldnt, then they should be able to pay more for their own insurance and it shouldnt be for people inland, said Rauch.

In March Lawmakers, will look at ways to reduce the states risk. A spokesperson for State Farm said despite the scale down efforts, the company will continue to do business in Florida.

Posted in Hurricane Season, Insurance, State News | 1 Comment »

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