State Farm requests 47% rate hike on homes
July 17th, 2008
Florida Today--July 16, 2008
THE ASSOCIATED PRESS
TALLAHASSEE -- State Farm asked Florida insurance regulators today for a 47.1 percent increase on its homeowners policies in the state.
The Illinois-based company, which is the largest private homeowners' insurer in Florida with roughly 1 million policyholders, said the increase was necessary to continue doing business in the Sunshine State.
"We've got to stabilize our financial condition so we can keep our promises to our customers," State Farm spokesman Justin Glover said Wednesday, noting the filing came after months of research by the company.
However, the large increase is not likely to go well with Insurance Commissioner Kevin McCarty or Gov. Charlie Crist, who pledged to Florida voters in his 2006 gubernatorial campaign that he would reduce insurance and tax rates for homeowners.
Both men were traveling in Europe on a 10-day trade mission and were not immediately available to comment on State Farm's request.
A public hearing on State Farm's filing will be held Aug. 12 since the rate filing exceeded 15 percent, said Ed Domansky, spokesman for the state Office of Insurance Regulation.
The state agency will review the filing to ensure it complies with Florida statutes, the Florida administrative code and actuarial standards and that rates requested are not excessive, inadequate or discriminatory.
Glover said insurer has spent roughly $1.20 for every dollar collected in premiums in Florida since 2000. State Farm paid out more than $4.4 billion in claims after eight hurricanes struck Florida in 2004 and 2005.
State Farm announced in February that it would stop writing new homeowners' policies in Florida and planned to shed roughly 50,000 homeowners living in coastal areas.
State-backed Citizens Insurance is the larger carrier of Florida homeowner policies with roughly 1.2 million customers.