[GMONEY]

Just read it on the Net. If you have State Farm, you need to start shopping it sounds. Oh wait I have them. Ethel, get the phone book,,,

http://www.wftv.com/news/18574518/detail.html

[Dirigo]

State Farm may be the first of many that pull out...those that remain will likely increase their premiums. Not good...

[Niels]

I don't own a house in Florida yet but from talking to friends and relatives it seems that most of the major insurance companies have stopped writing new policies for homeowners insurance. Now, it sounds like State Farm is carrying it a step further by actually dropping existing homeowners too.

It sounds like the entire private insurance market for homeowners insurance in Florida is starting to disappear. This is not good.

[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?

[SteveZ]

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?

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.

[Laker14]

The market isn't "free" if the state does not allow the companies to set the prices based upon risk exposure.

It seems to me, the fact that the companies are leaving, rather than choosing to stay and make money, indicates that the companies don't feel that the rates that the state allows them to charge allows them to make money.

We'll see if companies come running into the state to take the business. So far it isn't happening that I know of.

[bimmertl]

Sorry Steve, you are wrong on this one.

We moved here from Illilnois. The HO rates here are not even close to the "two to three times higher" number you picked out of the air. Actually the non hurricane portion of the premiums is similar to coverage everywhere else, which it should be.

Our policy premiums are clearly outlined in our bill. The hurricane portion of our yearly premium is roughly 27% of the yearly premium with a 2% hurricane deductible. If your home is "hurricane proof" opt out of the hurricane coverage.

Premiums are based upon sound actuarial data applied on a county to county basis, typically done be zipcodes. There is no "state rate", whatever the heck that is.

We previoulsy lived in Pasco county Florida. Pasco is the sinkhole claim capitol of Florida. Our premiums there were over twice as much as in TV for less coverage than we have now. Clearly a location based premium.

This move won't "bite" State Farm and USAA was never bitten by their withdrawal. They remain one of the strongest property and casualty carriers in the US. State Farm will no doubt be stronger as a result of their move if in fact they do eventually leave.

Great point on the joy of a free market. State Farm should have been allowed to adjust their rates to whatever they wanted and then let the consumers decide if they want to remain customers or go elsewhere. Instead, over 1 million policyholder will have to look elsewhere in a market limited by inadequate rates mandated by inept bureacrats. If you think there are always companies willing to see Florida as an oppurtunity for homeowners insurance, you haven't been paying attention. Most major carriers won't touch this place.

[Dayton]

My homeowners insurance is less on my designer home here than on my home in Indiana.

[784caroline]

I believe USAA will insure you if you are active military on orders OR if your primary residence is in Florida.

Also remember insurance is only as good as the financial backing of the company (or entity) providing the insurance so looking for the cheapest coverage may not be the cheapest in the long run. If you purchase insurance offered by the State of Florida and a massive hurricane comes through, Florida most likely will not be able to pay off 100% of the policy claims and will seek assistance from the federal Government. Your coverage then becomes dependent upon a federal government bailout of Floridas insurance (ouch)! This is not a good situation for anyone!

[Laker14]

This is one example of the misconception people have about insurance.

Insurance is really a pooling of money set aside to pay the individual who is unlucky enough to be the one to whom something unlikely happens. If one out of 10,000 homes (just making up numbers here) statistically will burn down, then all of those people put in money, and if you happen to be the unlucky one, you get help.

Chances are that if your house burns down, not all of the houses will burn down. However, if your house is destroyed by a hurricane, or the ancillary winds or tornados that go with the hurricane, it's a certainty that many, many, others will be affected. And with hurricanes in Florida, it's not a matter of IF, but of WHEN, and HOW MANY THIS YEAR.

[GMONEY]

Talked to my Ins Rep. with State Farm. I am getting the feeling they are putting up a front, they figure since the state would not grant them the rate increase they will try to bully them. Pull the ole Rope A Dope on us. She said it would take up to 2 years before it would be cancelled if at all.

[SteveZ]

Originally Posted by bimmertl

Sorry Steve, you are wrong on this one.

We moved here from Illilnois. The HO rates here are not even close to the "two to three times higher" number you picked out of the air. Actually the non hurricane portion of the premiums is similar to coverage everywhere else, which it should be.

Our policy premiums are clearly outlined in our bill. The hurricane portion of our yearly premium is roughly 27% of the yearly premium with a 2% hurricane deductible. If your home is "hurricane proof" opt out of the hurricane coverage.

Premiums are based upon sound actuarial data applied on a county to county basis, typically done be zipcodes. There is no "state rate", whatever the heck that is.

We previoulsy lived in Pasco county Florida. Pasco is the sinkhole claim capitol of Florida. Our premiums there were over twice as much as in TV for less coverage than we have now. Clearly a location based premium.

This move won't "bite" State Farm and USAA was never bitten by their withdrawal. They remain one of the strongest property and casualty carriers in the US. State Farm will no doubt be stronger as a result of their move if in fact they do eventually leave.

Great point on the joy of a free market. State Farm should have been allowed to adjust their rates to whatever they wanted and then let the consumers decide if they want to remain customers or go elsewhere. Instead, over 1 million policyholder will have to look elsewhere in a market limited by inadequate rates mandated by inept bureacrats. If you think there are always companies willing to see Florida as an oppurtunity for homeowners insurance, you haven't been paying attention. Most major carriers won't touch this place.

I've been wrong many times in my life - probably daily on some things....

When I lived in Seminole County (moved away duringl 2004), my property rate was dollar-for-dollar three times more than my rate in the DC area - same company (USAA). That came as quite a shock (a positive one) when I moved North. And now returning to FL, USAA said Nyet to covering the new home. I ended up with coverage, but not with a company having a nationally-recognized mascot.

I guess there's no good way with this.

Strange though, when the property insurers want to escalate rates to the stratosphere and the State gets involved, that's undue regulation. However, when health care insurers do the same, that's another story.

[EdV]

Well, if they do pull out, they'll need to change the company slogan to "State Farm Was there"

[Laker14]

"Strange though, when the property insurers want to escalate rates to the stratosphere and the State gets involved, that's undue regulation. However, when health care insurers do the same, that's another story."

I don't necessarily think that the state getting involved with keeping an eye on the insurance rates (in either case you mention) is a bad thing. In fact, it's probably a good thing. These are necessary items, like roads, utilities and emergency services.

As a nation we have accepted the value of not letting the utility companies dictate prices from a monopolistic position, without some governmental regulation.

I'm not sure who is playing games here. The insurers trying to gouge, or the pols trying to win votes by assuming a tough, albeit untenable position.

My problem is I can't get myself to trust either of those two entities.

[GatorFan]

http://www.floir.com/pdf/SFFHelpfulInfo.pdf