State Farm To Stop Writing Homeowner’s Insurance In Florida
Florida regulators had a well publicized battle with Allstate Insurance last year and for a time ordered the company to stop writing policies in the state until it released subpoenaed documents relating to it’s underwriting practices. Florida has one of the highest homeowner’s insurance in the nation and it’s regulators have taken a hard line against the insurance industry ever since Governor Charlie Crist took office.
Last year had a busy Atlantic Hurricane season which had two of the top ten costliest storms on record. The insurance industry has also had to cope with the fallout from the financial crisis which has crippled their normally robust investment income.
State Farm had submitted a 47% rate increase to the Florida Insurance Office which regulators denied. Two weeks after their request was turned down State Farm announced that it would stop writing homeowner’s insurance in the state.
The move will affect approximately 1.2 million residents, State Farm has submitted a two year withdrawal plan that must be approved by regulators. The move comes at a bad time for the state as Florida has one of the highest foreclosure rates in the country.
Two days after State Farm’s decision, Florida regulators ordered a subpoena for detailed information regarding all of the company’s policy holders. State Farm will continue to write health, auto and life insurance in the state, so it may seek to find some sort of compromise with regulators like Allstate did last year.
