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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.

Insurance Lawsuits

Pursuing an insurance lawsuit against a big insurer can be a long and complex process. The insurance attorneys at Arnold & Itkin LLP have successfully represented clients in disputes against major insurers and helped them recover their claims.

If you are involved in an insurance dispute with an insurance company, contact an insurance attorney at Arnold & Itkin LLP for a free consultation.

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State Farm Mutual Automobile Insurance Co. has announced it will drop out of Florida's property insurance market. The company has already sent letters to roughly 1.2 million policyholders in the state, announcing its decision not to renew policies and to stop sales of new policies to Florida residents.

The decision comes after an administrative law judge refused the company permission to introduce a 47 percent increase in home owner policies. According to President Jim Thompson, the company has been faced with a steady drop in revenues as a result of the disastrous hurricane season from 2004 and 2005. That means policyholders in the state have to look for new insurers. The company will no longer cover home owners, renters, contractors or owners of condo units, this includes rentals and ownership condo units. The company plans to continue to offer auto insurance and other polices, but it looks like angry residents are in no mood to employ the company. In any case, Florida insurance laws do not allow companies to offer only auto insurance if they offer home as well as auto insurance in other states.

Florida's anger at State Farm has been building and spilling over into the legislature. Florida lawmakers, including Senator Mike Fasano, R-New Port Richey, have slammed the company for its actions. The legislator has confirmed that he plans to introduce a new bill in the Florida legislature, when it reconvenes in March, that would prevent State Farm from offering any other kind of insurance in the state, or "cherry picking" as he calls it.  State Farm still has to go through all the normal procedures before it can begin to refuse renewal of policies. Once the company's plan has been reviewed and approved, it must give policyholders notice of 180 days before it can begin refusing renewals or denying new policies.

Insurance Disputes

Close to 1.2 million policyholders in Florida are likely to be scrambling for alternative insurers when their State Farm policies are cancelled. The company insists that its revenues will not allow it to continue coverage, but it appears that its inability to wrangle a whopping 47 percent increase in home owner policy premiums has caused the company to punish home owners.

Often, policyholders are held at ransom by irresponsible insurance companies willing to let customer lives be shattered as long as their bottom lines remain healthy. Litigating claims against these large companies can be a long, complex process, requiring the expertise of an experienced insurance attorney.

If you have been refused or denied claims or have any other kind of dispute with your insurance company, contact an insurance attorney at Arnold & Itkin LLP for a free consultation.

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