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After State Farm

June 25th, 2009 by Mike Vasilinda

State Farm insurance says it continues to plan for its withdrawal from Florida after the veto of legislation that may have kept the company here. Regulators have yet to approve the conditions of how the company can quit writing homeowners policies, and as Mike Vasilinda tells us, the fight is over how many of those policies will end in the states insurer of last resort.

Nearly a million state farm policy holders should now be looking for new coverage. The good news is theres no real rush. Regulators and State Farm are at odds over what happens to those policies.

The plan would put most policies with Citizens and thats something that Commissioner McCarty does not want, says Ed Domansky with the Office of Insurance Regulation.

The fight could take 18 months or more.

Regulators are trying to force State Farm to allow its agents to write for other companies so those customers arent forced into the state run insurer of last resort.

The good news is that Citizens has 400,000 fewer customers than at its peak.

In 2004 and 2005, Citizens paid out a total of 6 billion dollars in claims, Citizens Insurance Spokesman John Kuczwanski said. Today we have access to 16 billion dollars to pay for claims for any storm that might hit Florida. So were ready.

Joe Cain has insured this house with State Farm since 1987. Hes not happy about being forced to look for another insurer, but thinks hes got at least a year to make a decision.

Id just as soon stay with the company, Cain said. That would be a big pain to switch all that unless its a huge savings.

State lawmakers could take one of two routes after the veto. They could find a compromise with the governor to keep State Farm, or they could override that veto and let customers decide who will write their policy.

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