Insurance Quotes & Advice

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.

Many Americans are overpaying for home and car insurance and don’t even know it.  It is important to review your policies at least once a year.  Here are a few things that anyone can do to help save money on their insurance.

Compare prices

Property and auto insurance rates have been on the decline recently, so it might be good time to shop around and see if you can’t get a better deal somewhere else.

Purchase the proper amount of coverage

For homeowner’s insurance especially it is important to get an accurate value to what you are insuring and the amount of coverage you actually need.  Instead of using property value as the basis for coverage amounts you should use the estimated replacement or reconstruction costs.  With housing prices in a sharp decline, some people may actually be under insured.

Increase your deductible

It can increase what you pay for an incident but it can significantly lower the cost of your premiums.

Use a single insurer

In some cases it may be cheaper to get both types of coverage from a single insurer.  Check to see which companies offer package deals.

Look for discounts

Many companies offer discounts for a variety of different reasons.  For instance, a company may offer government employees a special discount. Make sure you receive any that you might be entitled to.

On Friday, a Florida appeals court ruled that Florida’s Office of Insurance Regulation had the right to suspend Allstate Insurance from writing new polices in the state.  Allstate had been appealing a suspension that was imposed on Jan. 16 by the state’s insurance commissioner.

At the heart of the matter are the company’s internal documents that pertain to the company’s claims paying practices.  Florida regulators have asserted that Allstate had failed to comply with their subpoena to release these documents back in October.

Allstate has maintained that these documents contain trade secrets it will not release.  It is alleged that these documents detail a business strategy created by the consulting firm McKinsey & Co. back in the 1990’s that is believed to have been widely used in the insurance industry.

Supposedly the “McKinsey” strategy outlines practices to pay as little as possible for claims and how to keep costs down.  It is believed to revolve around making low initial claim offers and using delaying tactics, with customers who refuse the initial offer, up to and including legal action if necessary.

Whether these documents show any illegality or not, they would certainly damage Allstate’s reputation if they were to come to light.  They could also have a measurable impact on any ongoing or future lawsuits that the insurance industry has over claims.