[Breaking] State Farm pulling out of Florida for ALL Homeowners insurance

[luvmy3]

It has to stop somewhere. First it is State Farm, then who will be next? Everyone gets a new company then they decide it is too expensive, it will keep going on.

State Farm is upset they didn't get their rate increase so they cancel everyone??? Doesn't make much sense to me.

What is a homeowner in FL. to do?

They are not pulling out because they are "upset", they are pulling out because without the premium increases they will not be able to afford to payout insurance claims if a catastrophe should happen. There isn't too much more to understand.
The homeowners will have 2 years to find an alternative insurer, I think that is a pretty generous amount of time.

 

[Cool-Beans]

Um excuse me, but do you know how hard it is for us idiots here in Florida to get Home owners, my parents were here for 30 years, they built a new hose in Orlando, It took them forever to find a company to write a new policy.

Yeah, I do. And that sucks. My dream is to one day live in Florida and I know that I won't enjoy the high premiums. But that's what happens when you live in a place where there's a bigger chance your house will be turned into rubble by fires or hurricanes.

The people of Florida have to realize what they're asking of the guys at State Farm. You're asking them to insure your stuff. If there is a hurricane, they have to pay out a ton of money to replace all of that.

They do the math and figure out that they have to bring in X amount of dollars if they want to be sure they can cover the damages and make a profit.

The government says, "No, you can't charge that much." So they have the choice of running the risk of losing money or just not getting involved. They choose not to get involved. Can't say that I blame them.

If the government forces them to do it and then something happens and they don't have the money to cover it, everyone is screwed.

Best for the government to stay out of it. Let State Farm choose how much they need. Let the people who wish to pay it do so. Let the folks who don't either run the risk of losing it all or let them move.

Wow, not often you see this here on the DIS. Totally accepted, and hey, I've made poor assumptions here in the past myself, so I can't act like I've never done it...lol

Well, I meant it. You were right. Thank you for accepting the apology.

It has to stop somewhere. First it is State Farm, then who will be next? Everyone gets a new company then they decide it is too expensive, it will keep going on.

State Farm is upset they didn't get their rate increase so they cancel everyone??? Doesn't make much sense to me.

What is a homeowner in FL. to do?

It'll be ALL the insurance agencies next. State Farm started it, but they'll all fall in line.

The homeowners will either need to pay the premiums and keep the insurance companies in business or let the government take it all over.

My guess is that it will all play out for a long time and then the government will take it all over and in the end people will end up wishing they'd stuck with the insurance companies. But we'll see.

 

[Mikelly1221]

It'll be ALL the insurance agencies next. State Farm started it, but they'll all fall in line.

The homeowners will either need to pay the premiums and keep the insurance companies in business or let the government take it all over.

My guess is that it will all play out for a long time and then the government will take it all over and in the end people will end up wishing they'd stuck with the insurance companies. But we'll see.

Sadly, I agree with you. I hope we're wrong.

It's bad news either way.

 

[ZachnElli]

It has to stop somewhere. First it is State Farm, then who will be next? Everyone gets a new company then they decide it is too expensive, it will keep going on.

State Farm is upset they didn't get their rate increase so they cancel everyone??? Doesn't make much sense to me.

What is a homeowner in FL. to do?

Rates CANNOT be increased in Florida without the state ok'ing it. They aren't "upset" they didn't get the increase. They are LOOSING money in Florida. How much sense does it make to continue to run a business when you are paying more out (in claims) than you are taking in? That doesn't even include the cost of running the business! I'll say it again, should they stay, continue to lose money, and then ask for a bailout from the government?

 

[macman752]

I work for another major insurance company and I agree with your summary. They need more premium to cover the losses, the state will not allow rate increases, so they have no choice but to pullout. They can't jeopardize the rest of the company by losing alot of money in one area. If a cat 5 would cut through Florida it would be a huge financial loss. It's not just Florida, I know my company is very restrictive all the way up the coast and along the Gulf.

Some years ago the big insurance companies lobbied the Florida legislature to allow "pup" companies. The law passed. Thus, Allstate begat Allstate Floridian and State Farm begat its Florida pup, State Farm Florida. This law permitted the creation of an insurer that operated only within the state. All pup companies have a name very similar to the parent company. The implication being that there is no difference between the parent and the pup.

This law has allowed the big company to siphon off the profits and exposes the pup to the risks. It's smart business for the insurance company. The consumer however will tell you a much different story.

 

[Mikelly1221]

Rates CANNOT be increased in Florida without the state ok'ing it. They aren't "upset" they didn't get the increase. They are LOOSING money in Florida. How much sense does it make to continue to run a business when you are paying more out (in claims) than you are taking in? That doesn't even include the cost of running the business! I'll say it again, should they stay, continue to lose money, and then ask for a bailout from the government?

For the consumer, it's a lose/lose situation. Either our premiums go through the roof (which we may or may not be able to afford) or the company leaves the state. Either way, we're out of luck.

 

[safetymom]

Rates CANNOT be increased in Florida without the state ok'ing it. They aren't "upset" they didn't get the increase. They are LOOSING money in Florida. How much sense does it make to continue to run a business when you are paying more out (in claims) than you are taking in? That doesn't even include the cost of running the business! I'll say it again, should they stay, continue to lose money, and then ask for a bailout from the government?

So what do you suggest to all the homeowners in FL that had State Farm?

 

[onelilspark]

Thanks for posting this OP! My parents live in FL and have State Farm Homeowner's (Geico Car...) My Mom's out of state though, so she didn't hear the news. I forwarded it over to her, she said she'll probably switch to Geico now, she was thinking about it anyway...

 

[okeydokey]

Until you have an auto accident, suffer a substantial financial loss due to a natural disaster or need it to respond to a myriad of claim situations.

Still a con job. My family in Ft Lauderdale paid high annual premiums for 30 years to an insurance company and never filed a claim. After Wilma they filed their first ever claim for like 6,000 and the company canceled their policy. That company made tens and tens of thousands of dollars off my family in 30 years, then dropped them when they needed the company to do what they promised to do.

 

[luvmy3]

So what do you suggest to all the homeowners in FL that had State Farm?

Here is a quote from the article:
State Farm Florida emphasized that it was submitting a two-year plan that seeks to limit disruptions for customers, and if approved, will allow them time to find coverage with other insurers.

State Farm is Florida's largest private homeowner insurer, second only to state-sponsored Citizens Property Insurance Co.

Maybe they could use the 2 years they have to find another company and call some, like Citizens Property Ins. Co

 

[mhsjax]

Yeah, I do. And that sucks. My dream is to one day live in Florida and I know that I won't enjoy the high premiums. But that's what happens when you live in a place where there's a bigger chance your house will be turned into rubble by fires or hurricanes.

The people of Florida have to realize what they're asking of the guys at State Farm. You're asking them to insure your stuff. If there is a hurricane, they have to pay out a ton of money to replace all of that.

They do the math and figure out that they have to bring in X amount of dollars if they want to be sure they can cover the damages and make a profit.

The government says, "No, you can't charge that much." So they have the choice of running the risk of losing money or just not getting involved. They choose not to get involved. Can't say that I blame them.

If the government forces them to do it and then something happens and they don't have the money to cover it, everyone is screwed.

Best for the government to stay out of it. Let State Farm choose how much they need. Let the people who wish to pay it do so. Let the folks who don't either run the risk of losing it all or let them move.

Well, I meant it. You were right. Thank you for accepting the apology.

It'll be ALL the insurance agencies next. State Farm started it, but they'll all fall in line.

The homeowners will either need to pay the premiums and keep the insurance companies in business or let the government take it all over.

My guess is that it will all play out for a long time and then the government will take it all over and in the end people will end up wishing they'd stuck with the insurance companies. But we'll see.

You know it is funny, I have lived here all of my life 45 years, NEVER NEVER NEVER even came close to any damage due to a hurricane. I realize that areas are devestated, but what about California, are they pulling out of there with all of the earthquakes floods fires etc and they keep rebuilding, I don't know why Florida gets the bad rap. And it isn't just higher rates, you just about can't get insurance regardless of the rates, my parents called for a week, and no one would even right a new policy. They finally found someone who would.

 

[okeydokey]

Here is a quote from the article:
State Farm Florida emphasized that it was submitting a two-year plan that seeks to limit disruptions for customers, and if approved, will allow them time to find coverage with other insurers.

State Farm is Florida's largest private homeowner insurer, second only to state-sponsored Citizens Property Insurance Co.

Maybe they could use the 2 years they have to find another company and call some, like Citizens Property Ins. Co

Citizens Property is the state run system for people who can't get a private company to insure them and they are super super expensive. I would do anything else I could before turning to Citizens. The funny think is the state of Fl just instituted a huge fund to help insurance companies with underwriting costs etc so they could stay in the state. It's a huge mess here. I consider myself lucky that my insurance only rose by 150% in the last 2 years.

 

[luvmy3]

Citizens Property is the state run system for people who can't get a private company to insure them and they are super super expensive. I would do anything else I could before turning to Citizens. The funny think is the state of Fl just instituted a huge fund to help insurance companies with underwriting costs etc so they could stay in the state. It's a huge mess here. I consider myself lucky that my insurance only rose by 150% in the last 2 years.

I was just citing an example of what one could do since a poster asked.

I have no idea what is going on down there with insurance, all I know is my premium goes up every year here in a non-hazard state, so its not too surprising that costs would rise and be much higher in a state prone to natural disasters.

 

[rparmfamily]

I called my SIL (who's had State Farm for years) and they are going to try to get USAA, but I think they are only writing policies for active duty right now. (in FL)

 

[bicker]

They are still making money by insuring "those" properties...maybe just not as much as they would like.

Every dollar must compete with every other possible use for that dollar. If a corporation chooses not to offer something to a customer that that customer wants them to offer, then the fault, if there is any, rests only with the customer.

 

[Mikelly1221]

You know it is funny, I have lived here all of my life 45 years, NEVER NEVER NEVER even came close to any damage due to a hurricane. I realize that areas are devestated, but what about California, are they pulling out of there with all of the earthquakes floods fires etc and they keep rebuilding, I don't know why Florida gets the bad rap. And it isn't just higher rates, you just about can't get insurance regardless of the rates, my parents called for a week, and no one would even right a new policy. They finally found someone who would.

I tried to post something similar earlier but couldn't get it worded right. I'm another native Floridian and it seems like insurance companies are acting like they just invented hurricanes 5 years ago.

 

[Mikelly1221]

Every dollar must compete with every other possible use for that dollar. If a corporation chooses not to offer something to a customer that that customer wants them to offer, then the fault, if there is any, rests only with the customer.

So it's State Farm's customers' fault that they are pulling out of Florida? I understand SF doing what it needs to do to stay profitable (even if I don't like it) but I don't think it's the customers' fault. SF could get more money elsewhere, or the risk was less elsewhere, so they pulled out. I don't think the customers could do anything one way or another to affect the decision.

 

[bicker]

You wanted a negative thread. Only you wanted all the negativity to be heaped upon State Farm. Is that correct?

Good catch, c-b.

 

[bicker]

So it's State Farm's customers' fault that they are pulling out of Florida?

Not just State Farm's customers' -- customers-as-a-whole, and voters through the actions of the appointees of their elected officials to regulatory oversight positions, determine whether or not it is worthwhile offering insurance in a state. Again, if we customers must have fault, then take it onto ourselves.

I understand SF doing what it needs to do to stay profitable (even if I don't like it) but I don't think it's the customers' fault.

I think folks should have refrained from trying to blame State Farm.

I don't think the customers could do anything one way or another to affect the decision.

I think they could have been willing to pay higher premiums.

 

[DisneyBamaFan]

Still a con job. My family in Ft Lauderdale paid high annual premiums for 30 years to an insurance company and never filed a claim. After Wilma they filed their first ever claim for like 6,000 and the company canceled their policy. That company made tens and tens of thousands of dollars off my family in 30 years, then dropped them when they needed the company to do what they promised to do.

First, my home owners policy only costs me $700/yr today. I am not sure how you think that they paid "tens and tens of thousands of dollars" in 30 years. 30 years ago, a policy would have been about $50/yr.

Second, without insurance you could not buy any big ticket item with credit. You could not buy a car, much less a home. Insurance helps us live the American dream. Without it, almost all Americans would be renters.

Third, insurance companies are a business, and they are taking a beating. Why the heck would they want to insure homes in a state prone to hurricane losses in the $Billions$ every year? It would be like opening a Saks in the ghetto - a sure loser.

Frankly, I am amazed that Floridians can get homeowners insurance that covers storm damage at any cost. If someone just has to live there, why should anyone else pick up a portion of their risk?