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State Farm Pullout Poses Challenges

January 28th, 2009 by Mike Vasilinda

The decision of State Farm Florida to stop selling coverage for homes, condos, renters, boat owners and others, continues to reverberate in the halls of the state capitol. As Mike Vasilinda tells us, the companys decision will likely result in the state run insurer taking on more risk.

Hear it Here: State Farm

There are 1 point 2 million potential new customers for upstart insurance companies or the state run insurer Citizens. State Farm plans to drop the policies over the next two years. The Florida Insurance Council says most but not all will find insurance with private companies, many of them new to Florida.

Yes theyre sound. Most of them are, Sam Miller with Florida Insurance Company said. First of all, most of them were around in 2004, 2005 and they survived those hurricanes.

The state says this is not a time for State Farm customers to panic.

Theres no immediate effect, Ed Domansky with the Office of Insurance Regulation said. The office has 90 days to approve or disapprove the plan, and even beyond that, the company will be providing 6 months notice before any nonrenewals will take place.

State Farm placed full page ads in every major Florida daily paper. The ad thanks customers and places the blame for State Farms departure on regulators who turned a deaf ear to rate hikes.

State Farm has effectively muzzled their agents, refusing to let them talk to the media. But off camera, we were told the phone traffic has been constant, with a lot of concerned customers.

State Farm customers are being told to reach out to other insurance agents in the community and to check the states web site shopandcomparerates.com. In almost every county, State Farm is not the lowest provider.

The state has 90 days to approve State Farms plan to leave. It could seek to modify it.

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