The largest home insurance carrier in Florida is dropping 125,000 owners from its roles because of the rising costs of insuring substandard homes. State Farm Insurance was granted the right to do this so that they wouldn’t pull out of the state, where they have the highest number of insured homeowners. Even with this action, they will remain the top insurance company for homeowners in the state.
This action was in lieu of the state refusing their petition to increase insurance rates by 47% to overcome losses from two major hurricanes in 2004 and 2005. Instead, the state allowed them to increase rates 14.8% and to cancel the policies of those homeowners who were most at risk of major damage coming from another hurricane. Unfortunately for these homeowners who are losing coverage, which won’t take place for six months, more than half of the rest of the 200 largest insurance carriers are running at a loss, so they probably won’t be too eager to take on new homeowners themselves.
The best thing to do is have your home inspected to verify its worthiness against hurricane strength elements. The Florida Department of Financial Services has come up with something they call My Safe Florida Home, which does free wind inspections to test how well your home will stand up to hurricane force winds. They also offer funds to help get your house up to standard, with allotments as high as $5,000. And, by going through the program, it could earn discounts on insurance premiums, thus making you insurance worthy.
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Mitch writes on real estate, finance, and many other things.
We got a call yesterday, March 3, 2010, announcing that we were dropped by State Farm. The good news is that we are covered until September 2010 and our agent is able to write a new policy through another carrier. I’m curious to know who the carrier is and more importantly, their rating.
I wish you good luck on getting a better carrier. I think it’s a raw deal, but it’s also a raw deal that so many homes were built with inferior materials.
I will also cancel my auto. State Farm wants to be cash in only not cash out. When Wilma destroyed my home I had to get a public adjuster to deal with State Farm. Good ridence. I hope all those that get cancelled also pull there auto insurance and go to a different insurance company.
I can easily understand your frustration. I’d probably drop them as well if they’d canceled my home insurance.
Is there any legal recourse for those affected by this decision? Many of the homeowners who are being cancelled are seniors and some are disabled.
Unfortunately no, since the state approved it.