Florida’s largest private homeowners insurer, State Farm Florida, today informed the Florida Office of Insurance Regulation (OIR) that it will stop selling homeowners and other property-related insurance policies in the state. The company’s withdrawal affects approximately 1.2 million customers who currently have State Farm Florida homeowners, renters, condominium unit owners, personal liability, boats, and/or personal articles insurance. It does not, however, affect State Farm Florida’s 2.8 million automobile insurance customers.
Executives, including State Farm Chief Executive Officer Ed Rust and State Farm Florida President Jim Thompson, met with Florida Insurance Commissioner Kevin McCarty and other staff at the OIR today to inform them of the company’s plan. The announcement closely follows McCarty’s decision on January 12, 2009 to deny State Farm Florida’s request for a rate increase.
State Farm cannot immediately terminate policies. It first must complete a regulatory review within the next 90 days. After that review, Florida law requires State Farm Florida to give its policy holders six months’ notice of non-renewal. Thus, if existing policy holders timely pay their premiums, State Farm cannot terminate their policies for at least nine months.
McCarty deems State Farm’s announcement to be disappointing but not surprising. McCarty commented:
“Although this is disappointing news for Floridians, who have been loyal customers of State Farm, we are not surprised by State Farm’s decision to stop offering all property insurance in Florida.
We will carefully review State Farm’s intended plans to ensure that they are in compliance with Florida law; and we will explore all legal options as well. I will do everything within my power to protect Florida consumers from unnecessary destabilization of the insurance market that this might cause and to ensure that Florida consumers are protected and have access to insurance at rates that are not excessive or unfairly discriminatory.”
