Quote:
Originally Posted by Laker14
Well, I can see already how this works.
The State of Florida would not allow private companies to raise the rates to point that would make it financially effective for them to do business, so they stop doing business.
The State run fund, Citizen's Property Insurance will manage it, until there is another bad year, and the state gets nailed with several storms.
Then the state won't have the money to pay the claims. Then the Feds will step in and bail out the state, so people who couldn't afford to relocate to Florida in the first place will pay the freight for those who could, and all because the State of Florida decided it knew better than the insurance companies how to run an insurance company.
Actually, pretty smart on the state's part, in the current mentality of having the tax payer pay for other's mistakes.
I don't suppose the fact that we can smell this a mile away, (or 1000 miles away) will change the state's thinking on this, do you?
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The rates in Florida are already two-to-three times higher than elsewhere in the nation, and the excuse is always used as "hurricanes." While there may have been some truth to that prior to Hurricane Andrew, a lot has changed. New Home construction in Florida now uses the building criteria demanded by the insurance industry post-Andrew, and it has worked. In addition, not all of Florida is hurricane-prone, but the entire state absorbs the "state rate."
I can appreciate companies wanting to make a profit, but the actions in the past indicated "price-fixing" to the obscene level.
State Farm's actions will bite them, as others have already experienced. For example, USAA no longer writes in Florida, unless you are active-duty military moving on-orders to Florida. USAA has covered me for years, and when I went from FL to DC/Maryland 4 years ago and sold my FL residence, I still had USAA cover the MD house and the cars. When I bought in TV, USAA refused to write my new FL residence, so I picked up other coverage through an independent agent. Now, USAA has lost the new FL sale, the coverage on the MD property with its sale, and my cars (out of spite) - so one decision cost them all my business.
The joy of the free market is that there is always a company willing to see this as an opportunity.