State Farm pulling out of Florida
It's the latest private insurer to stop writing homeowner and property policies in the hurricane-prone state.
After the state refused to grant a 47% rate increase, State Farm said it would no longer offer fire and storm protection to its 700,000 customers.
State Farm auto, life and health insurance will still be available to Florida residents.
After billions of dollars of losses from a series of 2004 storms, State Farm Florida, which was established as a stand-alone company in 1998, borrowed $750 million from State Farm Mutual to continue to operate.
It hasn't been able to repay that debt -- and presumably won't be able to repay -- unless the state relents and allows Florida residents to be charged higher premiums.
State Farm stopped accepting new Florida customers more than a year ago. (It did allow existing customers who purchased a home in the past year to transfer coverage from the old to the new property.)
Letters announcing State Farm's plan to stop offering property insurance in Florida were mailed to customers the last week in January.
Once the state approves State Farm's plan to withdraw from the market, which should come sometime in March or April, the insurer will stop renewing homeowner policies as they expire.
That means State Farm customers will have to start shopping for a new insurer by this spring.
That's not going to be easy, because fewer and fewer insurers are willing to write homeowner policies in the state.
We fear many State Farm policy holders will wind up paying more for less coverage, and most will have no choice other than Citizens Property Insurance Corp. -- the state-owned insurer of last resort.
If you have questions or concerns about the upcoming policy changes in Florida, State Farm recommends you call your local State Farm agent or the company's hot line, 1-800-381-3963.
You also can go to State Farm Florida's Web site for more information.