State Farm Insurance Company has been trying for a long time to get the State to allow it to raise rates for homeowners insurance. Now they are trying something new–threats. Like a child who does not get to play with the toy he wants State Farm is threatening to leave Florida. Surprisingly, Governor Charlie Crist, instead of cowing to them seems to be calling State Farm’s bluff:
"They probably charge about the highest rates in the state anyway," Gov. Charlie Crist told reporters. "I think Floridians will be much better off without them."
State Farm intends to get rid of all lines of property and casualty insurance in Florida to include homeowners, renters, condominium, boat owners and umbrella insurance coverage. Of course, State Farm is keeping its high profit auto insurance coverage in Florida. State Farm already refuses to write new homeowners coverage in Florida. To limit its parent company liability State Farm created and transferred all Florida policies to State Farm Florida in 1998 as a stand-alone subsidiary of State Farm Mutual Automobile Insurance Co. The obvious plan then was to limit exposure of the company as a whole in case a big storm hit Florida again. Now that they are refusing to write new coverage, have created a shell company to limit liability and have not been able to bully the State to raise prices they are threatening to leave. They are abandoning 703,000 insured policy holders in Florida, many of whom have been with State Farm for decades. One suggestion to all those policy holders: drop your auto coverage with State Farm. Do not let them take the cream of the insurance business but leave all those loyal policy holders out in the cold. Not very good neighborly.
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