It’s been a very large pissing contest, and now it may be over. Where did the piss wind up? In the eyes of State Farm’s insureds.
State Farm officials have been playing poker with Florida’s Insurance Commissioner for years as they tried to get unconscionable rate increases approved. The State told The Farm to go suck a hose. State Farm has now gone all in, announcing today they are pulling out of the Florida homeowner’s insurance market and will be canceling some 1.5 million policies. And Florida has called their bluff, saying, “Florida already has new companies who are eagerly looking to grow their businesses and will welcome the opportunity to add more customers.”
Sure, Florida has new companies. Florida has become so desperate to attract any new insurer to write business in the state they are accepting pitifully underfunded companies with unproven track records.
I’ve been happy with my State Farm policy. They stood by most of their policyholders after Hurricane Andrew changed the South Florida and Insurance landscapes in August of 1992. While Allstate and Prudential did mass cancellations after Andrew, State Farm kept their current policyholders and mostly just stopped writing new business. I was proud to be able to reassure people that their policies were safe.
State Farm insureds enjoy a much better homeowners policy than the standard ISO policy most of these start-up companies offer. More endorsements are available (things like business property, backup of sewers and drains coverage, increased jewelry and furs, gun coverage, incidental office, etc.), more personal property coverage is available, and our agents have more influence in the underwriting and claims process.
Now they are setting us adrift. But gee, I’m so glad to know they’re going to be happy to keep my auto, life and other policies. Thanks, guys!
State Farm or the State could back down and fold their hand, but we’ll still end up losing. No matter what happens it’s bad news for State Farm insureds. And for several of my friends, who are sure to lose their jobs as their employer/agents lose 40- 60% of their income.
Come my renewal I’ll probably need to get a different policy with less coverage and a higher price tag. I’m just disgusted.