As many of you who are following the real estate market in Florida know, Florida State Farm Insurance has been hashing it out with the Florida Office of Insurance Regulation for a good part of 2009. What originally started the trouble between the two parties was a proposed 67.1 percent rate increase by State Farm, and an announcement shortly thereafter, stating that State Farm was going to stop insuring property in Florida.
That type of rate increase could make affording homeowners insurance impossible for many of Florida’s residence. But because State Farm insures such a large amount of Florida homeowners, the complete loss of State Farm could mean quite an upheaval. It’s simply not easy to find quality homeowners insurance like what State Farm offers.
Quite the conundrum.
However, resolution occurred on December 16, 2009, when Insurance Commissioner Kevin McCarty issued a consent order that resolves pending litigation between State Farm Florida and the Office of Insurance Regulation. The order states that State Farm Florida will drop no more than 125,000 policies. With the 810,416 residential properties the insurer had in October of 2009, this decline will still leave State Farm Florida the reigning king in private property insurance. Good for them, sure. But good for the homeowners? You decide.
The order also states that instead of the proposed 67.1 percent, the rate increase will be 14.8 percent for all homeowners’ and condominium unit owners’ policies. While the difference between proposed and actual rate increase is significantly lower, many bloggers are not impressed. Lack of loyalty to State Farm’s long-term clients was a common theme among them:
“Being a policy holder since the 60s, I sincerely think this is wrong. I have never had a major claim in Florida, and this is unacceptable.”
Many have felt bullied and abandoned during the last year of negotiations. Was State Farm crying wolf or simply making the necessary changes to stabilize its financial condition and be able continue quality service to their clients? There must be a reason they are on top and whether or not you agree to the final outcome, resolution always brings a sigh of relief. For now, “State Farm is Here”.