State Farm Petitions Florida Insurance Commission About Conditions for Leaving State
State Farm Florida, which announced in January that it was dropping 1.2 million property insurance policy holders in the state, has asked the Florida Insurance Commission for a hearing to counter the commission’s conditions for allowing it to leave Florida.
In January, the insurer claimed it would no longer cover properties including renters, home owners, and contractors in the Sunshine State. In its petition to the Office of Insurance Regulation this week, the company included the main points of dispute between it and the state, including its certificate of authority, as well as its intention of dropping property policies that have the highest exposure to “potentially devastating hurricanes.” The Florida Insurance Commissioner's office, which last month rejected State Farm's request for a hearing, announced that it will make a decision about State Farm agents selling policies for other insurers and other points in the petition, within 15 days.
Some of State Farm's arguments against the state’s conditions are almost laughable. For instance, the company does not want its agents to directly sell policies for other insurers because that would dilute its reputation as a “reliable company”. With 1.2 million policy holders in Florida who now have to look for other insurers, State Farms "reliable" reputation is in tatters regardless.
State Farm's decision to leave the property insurance market in Florida has raised concerns among policy holders as the hurricane season draws near. The Florida legislature is now trying to lure back the company by introducing a bill that will allow large private insurers to sell residential property insurance with minimal state regulation. In doing so, law makers could actually be placing Florida policyholders at risk because deregulation of rates tends to lead to rate increases by companies.
By announcing that it is closing shop in Florida, State Farm has put policy holders in a bad situation. With hurricane season drawing closer, these policy holders have a choice between only the state-backed insurer, Citizens, or smaller private insurers who may not be able to pay out quickly in the event a hurricane. It is just another example of the kind of irresponsibility that many insurers display.
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I support everyone who has decided not to purchase auto insurance from company which refuses to insure homes in Florida!