State Farm seeks 47% rate hike on homes

[Dr.Phool]

Source: Tampa Bay's 10 News

TALLAHASSEE, Fla. (AP) — State Farm is seeking a 47.1 percent rate increase in homeowners' policies in Florida.

The Illinois-based company is the largest private homeowners' insurer in Florida with roughly 1 million customers.

State Farm spokesman Justin Glover says the company has spent roughly $1.20 for every dollar collected in premiums in Florida since 2000 and the big increase was necessary to stabilize its Florida operation.

A spokesman for the state Office of Insurance Regulation says the filing is being thoroughly reviewed and that a public hearing on the State Farm filing will be held next month.

Read more: http://www.tampabays10.com/news/local/story.aspx?storyid=85017&catid=8

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Homeowners insurance that is already obscene in Florida is set to go up, and most people only have state-run Citizens Insurance as an option, and they are required by law to have the HIGHEST rates in the state, lest they compete with good ole honest insurance companies.

In many areas insurance payments are higher than mortgage payments.

My home as an example. I have approximately $175,000 replacement cost on my home, with a standard homeowners policy. It's the same square footage and replacement (plus pool) as a home I owned in Cleveland. In Cleveland I paid less than $500 per year. Here I pay $2,500 per year, plus another $750 for flood (100 year flood zone).

This could be the final nail in the coffin for Florida real estate.

[Amerigo Vespucci]

1. "Bend over, we need to 'stabilize' you"...

Gotta tell ya, there are few things I like better than an unrepentant euphemism.

:eyes:

[islandmkl]

2. the insurance industry views us in florida as the cash cow...

collect, collect, collect...WHAT?? PAY OFF??

the AG had to jerk their license for a while to get them to turn over their records concerning rates, etc. in florida....

insurance? sure, you have insurance.
insured? well....that's a different situation....

[1monster]

14. That was All State, not State Farm, but they all are rackets.

[flvegan]

3. Isn't Citizens now allowed to compete?

I thought I had read that.

[Towlie]

4. What kind of name is "State Farm" anyway?

It sounds like something a socialist country would have. ;)

[Xithras]

8. Not far off

State Farm started off as a policyholder-owned car insurance company for farmers. "The people" owned the company, and it was a low cost insurance option for people who didn't drive much.


How things have changed.

[Tab]

5. Live by the odds, die by the odds

Insurance companies bet against reality, it's a risky business (no pun intended) but yeah, a few well-loaded hurricanes can bring them to their knees. Prime, expensive, real estate, and "acts of God" can trash an insurance company Real Quick Now.

I wouldn't even want to live in one of those places - disasters aside, who the hell is going to insure you at a halfway decent rate? As time goes on, probably no one.

I wonder how affordable it is to get flood insurance in New Orleans these days? Probably not, and if it happens again, you're left holding the bag.

Guessing it sucks to be a southern Realtor these days.

[havocmom]

16. Claims aren't the only problem. They invest your premium$ in stock market

When market preforms poorly, they do not make lots of money playing with your money, so they need more of your money to make it worth their while.

As I recall, insurance rates went up a lot during bush I too, but perhaps I am remembering incorrectly, being old and all ;)

[Bandit]

6. That would suggest to me you live in a dangerous area for houses.

Is it worth it? Is the sunshine worth the risks involved? I know one thing, I don't chose to live there...

[Phred42]

7. The other will pile on to this gang-bang soon

[jayfish]

9. That's The Correct Way To Do It. It's a liberal policy.

However since State Farm's profit for 2007 was $5.5 billion on $61.1 billion in revenue, a 2% increase over 2006, I have to say...

STFU State Farm

http://money.cnn.com/magazines/fortune/global500/2008/snapshots/10199.html

Jay


ON EDIT: Link added

[Indenturedebtor]

10. Egads what a travesty these insurance companies are

"Oh no we have to pay claims!!!!111!! But that will cut into profits and we can't have that!" What a scam :grr:

[RantinRavin]

11. Check out Florida Farm Bureau

It doesn't have to be a farm or agriculture...they do require a membership which is around 50 bucks a year, but for my home which had a 135,000 replacement value in the Tampa area, about 15 miles from the water, runs about 700 a year....

[Dr.Phool]

17. I will definitely check that out tomorrow.

And if I can get it, State Farm can kiss 2 cars and a motorcycle good-bye too. The only reason I haven't changed them yet, is because the tend to just coincidentally cancel your homeowners, if you find cheaper rates for your car.

[kcass1954]

12. And those of who can't sell won't be able to afford to stay either.

I've been here since I was in high school, so I don't have another area for comparison. What I know is that my homeowners insurance was just over $1100 eight years ago. We have replacement cost of $165,000 for 1500 sq ft with no pool, and it's nearly $3300 now. My base flood elevation is probably a little bit higher than yours - our flood is only $350. When you factor in the taxes, just over $500 of our mortgage payment is just for the escrow stuff.

I own a lot in Dunnellin where we planned to build a little house when we retire in 6 years. We're re-thinking that right now simply because of the insurance issues.

Edited to add: Oh yeah - fuck you State Farm!

[1monster]

13. I got dropped from the Travelers this year after thirty years with them without so much as

a Thank you for your past business...

We'd gone from $300 a year with $250 deductibles and great coverage to $1,900 a year and good coverage with a 2% and 4% deductibles.

Our new insurance company is charging us over $2,800 per year with okay coverage and the same 2/4% deductibles.

I'm not sure what I'm going to do if the rates keep going up so steeply.

I hate the insurance racket.

We pay something more than half of our income on insurances these days and I have my doubts that they will ever pay out anything like they should.

[ladym55]

15. In SE Massachusetts many companies won't even write homeowners' insurance

For the past two years, our home on Cape Cod has been insured by something called the FAIR plan (which is anything but). It's expensive as hell and covers very little.

Good to know that insurance companies are being helpful to homeowners all up and down the East coast. :grr:

[pokercat999]

18. Insurance is more like the pari-mutual at the racetrack.

They take in the bet, payoff the winners (claims) and take some off the top for holding the money. If the insured have too many claims for the "pool" they will just raise the rates to cover the "losses" and grab their usual profit on it ALL. They can't lose in the long run.

On edit: one big difference is the race track MUST payout all but their percentage and the states take. If the insurance company can find a way to deny the claim they keep it as "profit". They NEVER lower rates because the are experiencing lower losses they just make more profit. It's like putting your money in a bank and if they could find a way to steal some of it....well, that's just business.

[corporatemedia]

19. Too bad the new bills won't go out until after the election. n/t

[Javaman]

20. The new State Farm slogan...

"like a crappy neighbor, state farm fucks you up plenty!"

[WriteDown]

21. Fully support this

People need to be discouraged from living in these disaster prone areas like FL and New Orleans. If you have the assets and can absorb the risk, then fine, you can take your chances, but if you do not then its time to start looking for a safer place to live. Living on a coastline in a hurricane prone area is a dangerous thing.

[melody]

22. We ALL live on the faultline.

Where there are no hurricanes, there are earthquakes, where there are no hurricanes and earthquakes, there are fires and floods.
There are no safe places to live.