STATE FARM CAN GO – BUT NOT ON ITS OWN TERMS

More than 1,600 homeowners policies in effect in Suwannee, Hamilton, Lafayette

Staff

The state Office of Insurance Regulation today conditionally approved a request by State Farm Insurance to stop selling homeowners policies in Florida. Insurance Commissioner Kevin McCarty ruled the company may withdraw under the following conditions: State Farm must allow its agents to sell homeowners policies for other carriers, and the company may not place any of its policies with Citizens property Insurance Corp., the overburdened state-run carrier of last resort.

"I could not approve the withdrawal plan State Farm submitted, because, as Florida law states, I believe that plan was 'hazardous' to State Farm policyholders and to the public," Florida Insurance Commissioner Kevin McCarty said in a public statement. "State Farm intended to dump all of its customers into Citizens; and that is not acceptable for their customers or for the people of Florida. We have private companies that are eager to grow their businesses, and I expect State Farm to fully cooperate in facilitating a smooth transition of their policyholders to those companies."

Florida Chief Financial Officer Alex Sink approved of McCarthy's move.

"As Florida's Chief Financial Officer, I am especially delighted that State Farm cannot interfere with its agents' ability to place their customers with other insurance companies," she said in a press release today. "This allows current State Farm policyholders to remain with their State Farm agents, who will now be free to help Floridians find the property insurance coverage that best suits their needs."

State Farm has 21 days to appeal McCarty's order.

State Farm submitted its request to withdraw from the Florida market on Jan. 27. The decision followed state regulators' refusal last year to grant the company a 47 percent rate hike. The company blamed the decision on recent record payouts following a series of devastating hurricanes in the state. The move will not affect those with auto, or life and health insurance policies through State Farm.

One thousand two hundred sixty-two State Farm homeowners policies are in effect in Suwannee County. The total for premiums written is $1,405,693. The total value of the insured structures is $424,242,973.

Two hundred thirty-eight State Farm homeowners policies are in effect in Hamilton County. The total for premiums written is $197,606. The total value of the insured structures is $76,138,400.

One hundred two State Farm homeowners policies are in effect in Lafayette County. The total for premiums written is $127,804. The total value of the insured structures is $31,677,716.

State Farm insures about 1.2 million Floridians. More than 703,000 of those policies are for site-built homes.

State Farm said it plans to phase out homeowners policies over a two-year period.

Text Only