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State Farm Insurance Cancels Thousands of Florida Policies - 2/4/2010 3:53:50 PM   
Brain


Posts: 3792
Joined: 2/14/2007
Status: offline 		At least it’s not health insurance cancelled by rescission.

State Farm Insurance Cancels Thousands of Florida Policies

125,000 customers to be cut during hurricane season

msnbc.com and NBC News
updated 6:23 p.m. ET, Wed., Feb. 3, 2010
The largest homeowners insurer in Florida is canceling the policies of 125,000 of its most vulnerable customers beginning Aug. 1, halfway through the 2010 hurricane season.

The company, State Farm Florida, began sending out cancellation notices this week to nearly a fifth of its 714,000 customers, most of them in the state’s hurricane-prone coastal regions.

A spokesman for State Farm said the decision was the direct result of its failure to win a 47.1 percent rate increase from state regulators.

http://www.msnbc.msn.com/id/35220269/ns/business-personal_finance/
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RE: State Farm Insurance Cancels Thousands of Florida P... - 2/4/2010 4:00:51 PM   
pahunkboy


Posts: 33061
Joined: 2/26/2006
From: Central Pennsylvania
Status: offline 		...well they have rights too.  Don't they?

(in reply to Brain)
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RE: State Farm Insurance Cancels Thousands of Florida P... - 2/4/2010 4:08:15 PM   
Mercnbeth


Posts: 11766
Status: offline 		What an opportunity for the citizens of Florida! They'll have the opportunity to replace an evil corporate entity with a good and caring 'tax exempt' bureaucratic government entity providing the same coverage!

Citizens Property Insurance is a pseudo government entity. It provides the usually government efficiency. I would think you would applaud this since it eliminates the excess corporate profits being earned by State Farm and many of the other P&C carriers that have left the market. This represents the same transition sought by those wanting government provided Health Care. You should be happy!

(in reply to pahunkboy)
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RE: State Farm Insurance Cancels Thousands of Florida P... - 2/4/2010 4:19:05 PM   
SL4V3M4YB3


Posts: 3506
Joined: 12/20/2007
From: S.E. London U.K.
Status: offline 		Government should be mitigating risk at climate change level is my proposal.



Note the stepped increase.

< Message edited by SL4V3M4YB3 -- 2/4/2010 4:20:17 PM >

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RE: State Farm Insurance Cancels Thousands of Florida P... - 2/4/2010 4:25:40 PM   
DomImus


Posts: 2004
Joined: 3/17/2009
Status: offline 		From the same story:

"Victoria Baer, a 26-year State Farm customer who owns an advertising business in Jacksonville, was waiting this week to see whether she would get one of the notices. Customers are “money for them,” she said, but “what’s not money for them is the risk.”


I am willing to wager that Ms. Baer does not sell advertising at a loss yet expects State Farm to sell their product to her at a loss.


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RE: State Farm Insurance Cancels Thousands of Florida P... - 2/4/2010 5:24:56 PM   
willbeurdaddy


Posts: 11894
Joined: 4/8/2006
Status: offline
quote:

ORIGINAL: DomImus

From the same story:

"Victoria Baer, a 26-year State Farm customer who owns an advertising business in Jacksonville, was waiting this week to see whether she would get one of the notices. Customers are “money for them,” she said, but “what’s not money for them is the risk.”


I am willing to wager that Ms. Baer does not sell advertising at a loss yet expects State Farm to sell their product to her at a loss.



You cant really tell from that quote whether she is just making a correct observation, or whether she is saying they shouldnt be focused on risk/profits...though I suspect you are right, she is whining that she can no longer get more than she paid for.

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RE: State Farm Insurance Cancels Thousands of Florida P... - 2/4/2010 5:42:47 PM   
Brain


Posts: 3792
Joined: 2/14/2007
Status: offline 		They are probably better off with a government insurance agency that will pay claims not like the private companies that screwed the people of Louisiana saying they’re not covered for Katrina.

State Farm Insurance not make money or does Wall Street demand bigger profits?

(in reply to Mercnbeth)
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RE: State Farm Insurance Cancels Thousands of Florida P... - 2/4/2010 6:06:49 PM   
ThatDamnedPanda


Posts: 6060
Joined: 1/26/2009
Status: offline 		They're even better off moving to a part of the country that doesn't get leveled by hurricanes several times a year. If enough people move away because they decide they can't afford to live there, hurricanes won't be so expensive, insurance companies won't be paying out several billion dollars a year in claims, and rates may drop. Or, people can choose to continue living in the path of the hurricanes, and pay whatever they need to pay to insure their homes. I'm no fan of the insurance companies, but this looks to me like a pretty good example of the free market working exactly the way it's supposed to work.

People can't have it both ways. If you live in the middle of the highway, you're going to get run over every now and then.  If you don't want to pay the price of getting run over, move away from the highway. 

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RE: State Farm Insurance Cancels Thousands of Florida P... - 2/4/2010 6:23:32 PM   
subfever


Posts: 2895
Joined: 5/22/2004
Status: offline 		I believe it was only a year or two ago when Allstate made a similar market withdrawal.

(in reply to Brain)
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RE: State Farm Insurance Cancels Thousands of Florida P... - 2/4/2010 6:43:58 PM   
DarkSteven


Posts: 28072
Joined: 5/2/2008
Status: offline 		State Farm is making a business decision that it's too risky to insure in hurricane-prone areas.  Next step will be the uninsurable people moving.  It could be legit or it could be a power play to win the rate increase.

Now if this was something like State Farm claiming that flood damage probability was too high in Montana, I'd be suspicious.  But seriously - I'd sure hate to insure against hurricanes in Florida.


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The small-breasted ones want larger breasts. The large-breasted ones want smaller ones. The straight-haired ones curl their hair, and the curly-haired ones straighten theirs...

Quit fretting. We men love you."

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RE: State Farm Insurance Cancels Thousands of Florida P... - 2/4/2010 6:49:57 PM   
pyroaquatic


Posts: 1535
Joined: 12/4/2006
From: Pyroaquatica
Status: offline 		Dome houses provide a nice streamlined structure and deflects debris easily.

Instead of "OH NOES!!! HURRICANES BAD INCREASE INSURANCE RATES!!! CANCEL INSURANCE PLANS"

it would be nice to think

"How can we decrease the risks?"


_____________________________

You are what your deep, driving desire is.
As your desire is, so is your will.
As your will is, so is your deed.
As your deed is, so is your destiny.
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(in reply to ThatDamnedPanda)
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RE: State Farm Insurance Cancels Thousands of Florida P... - 2/4/2010 7:14:32 PM   
pahunkboy


Posts: 33061
Joined: 2/26/2006
From: Central Pennsylvania
Status: offline 		the insurance companies are deep into derivatives- this means that  they are not solvent.   not many of them- due to the entangled mess of financial instruments.

(in reply to pyroaquatic)
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RE: State Farm Insurance Cancels Thousands of Florida P... - 2/4/2010 9:30:53 PM   
Termyn8or


Posts: 18681
Joined: 11/12/2005
Status: offline 		Actually even if they are, can you blame them for trying to remain solvent ? Not that there is any razor sharp distinction anymore, but it's a business move.

Actually it's not that bad, to take themselves out of the process. If they go bust then they need a bailout, the end result is the same, we all get it up the dupa. Remaining in this game means another level of middleman in the disbursion of the funds. Instead of them getting profits and bonuses, the money will be handled by something else. Something regulatory must've happened.

And they have actuaries. No doubt these policies will expire withinh the next year sometime. They are banking on trouble. They have just about the best information in the world. I would take it as a sign. They did not get where they are by losing money.

Thing that gets me is that they were looking for a 47.1% increase ? That means your $600 a year house insurance becomes more like $900 a year. As much as it may sound like to you, I don't think it would've covered it. And then there is the infrastructure, which would sustain heavy damage. Even if they don't insure that, it jams up the works because many policies pay for temporary housing during repairs. Imagine the house being all fixed up but the family can't move back in until the sewers work, and who knows how long that might take ?

You may cast a jaundiced eye on this and describe it as corporate greed. But I think what happened is that they saw a sucker bet coming within a year and decided to fold. By folding, you limit your losses. And they are not folding up, but to do so on 20% of a statewide income is quite a move, and is noteworthy. I don't think I'll move to Florida.

In case Florida fucks with them over this, with 700,000 some odd customers there they do not have a huge market share. So if they have to pack up and leave, so be it, at least in their eyes.

What would you do ?

T

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RE: State Farm Insurance Cancels Thousands of Florida P... - 2/4/2010 10:12:48 PM   
rulemylife


Posts: 14614
Joined: 8/23/2004
Status: offline
quote:

ORIGINAL: Mercnbeth

What an opportunity for the citizens of Florida! They'll have the opportunity to replace an evil corporate entity with a good and caring 'tax exempt' bureaucratic government entity providing the same coverage!

Citizens Property Insurance is a pseudo government entity. It provides the usually government efficiency. I would think you would applaud this since it eliminates the excess corporate profits being earned by State Farm and many of the other P&C carriers that have left the market. This represents the same transition sought by those wanting government provided Health Care. You should be happy!


Citizens Insurance was created by the Florida legislature to insure those in areas where private insurance companies were refusing to offer coverage.

It is not designed to compete with private insurers and by law it must charge equal or higher rates than private insurers.


Citizens Homeowners Insurance


To protect and encourage existing homeowner's insurance companies, Citizens is not permitted to charge less for a premium than those top 20 insurance companies in the state.

Smaller companies can and are charging more than Citizens. So whenever some insurance company applies for an increase in its rates then Citizens premiums must also follow those charges up if the state approves the application.

(in reply to Mercnbeth)
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RE: State Farm Insurance Cancels Thousands of Florida P... - 2/4/2010 11:22:04 PM   
Archer


Posts: 3207
Joined: 3/11/2005
Status: offline 		Unless you can point me to an actuarial table that shows that the increase was not mathematically correct, then i have to say "So what". They can choose to insure or not, they seem to be giving plenty of notice so that folks can find coverage with another company.

The difference in Katrina that had most people scratching their heads was the difference between storm damage and flooding. It's in your policy too it's in every home owner's policy in the country. Regular Home Owners policies cover storm damage, but they do not cover damage from rising water/ flooding. Tht is why the NFIP National Flood Insurance Program was created. Because flood damage simply is not predictable enough for anyone to make any money.

If Florida believes they can subsidize an insurance program for their citizens, then they are hugely mistaken and will go the way of California as far as being in any real sense of the word Bankrupt. Normal insurance companies subsidize their losses in high risk areas by collecting enough premiums in low risk areas to make the math work out. Florida simply doesn't have enough areas with low risk to make the math work out.



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RE: State Farm Insurance Cancels Thousands of Florida P... - 2/5/2010 6:04:58 AM   
SirAldwyn


Posts: 44
Joined: 10/15/2009
Status: offline 		This happens across the country, in Illinois if you are in a flood zone or near a flood zone or near water, private insurers do not offer you HO insurance to cover that.  It is done through the FED's and State. 

Last year when the Rock river flooded, into area not considered a flood zone, every insurance company filed claims in court stating it was not "flood" water that did the damage but it was backed up sewer water, which is not covered under there plans.

Guess which one with the most lawyers won? 

Now the city got stuck with areas of condemned houses and a huge clean up bill.  So either way, it comes out of our tax money, either by offering insurance to cover everything (allowing people to fix their homes and live their generating a tax base), or getting stuck tearing down homes people thought where covered by their private insurance and losing all the real estate taxes and other taxes from the people moving out of the area



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RE: State Farm Insurance Cancels Thousands of Florida P... - 2/5/2010 4:10:08 PM   
Silence8


Posts: 833
Joined: 11/2/2009
Status: offline
quote:

ORIGINAL: Mercnbeth

What an opportunity for the citizens of Florida! They'll have the opportunity to replace an evil corporate entity with a good and caring 'tax exempt' bureaucratic government entity providing the same coverage!

Citizens Property Insurance is a pseudo government entity. It provides the usually government efficiency. I would think you would applaud this since it eliminates the excess corporate profits being earned by State Farm and many of the other P&C carriers that have left the market. This represents the same transition sought by those wanting government provided Health Care. You should be happy!


And people say ideology is dead.

(in reply to Mercnbeth)
Profile   Post #: 17
RE: State Farm Insurance Cancels Thousands of Florida P... - 2/5/2010 4:34:46 PM   
Mercnbeth


Posts: 11766
Status: offline
quote:

ORIGINAL: Silence8
quote:

ORIGINAL: Mercnbeth

What an opportunity for the citizens of Florida! They'll have the opportunity to replace an evil corporate entity with a good and caring 'tax exempt' bureaucratic government entity providing the same coverage!

Citizens Property Insurance is a pseudo government entity. It provides the usually government efficiency. I would think you would applaud this since it eliminates the excess corporate profits being earned by State Farm and many of the other P&C carriers that have left the market. This represents the same transition sought by those wanting government provided Health Care. You should be happy!

And people say ideology is dead.


You mean that a government run insurance program replacing an evil, profit driven, private sector company isn't a great thing? You must not be considering the efficiencies that public employees and bureaucracy bring to the table!

(in reply to Silence8)
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RE: State Farm Insurance Cancels Thousands of Florida P... - 2/5/2010 5:32:35 PM   
thornhappy


Posts: 8596
Joined: 12/16/2006
Status: offline 		Guys & gals, NYC's been hit by a catastrophic hurricane before.  You'd have a hard time finding some place east of the Mississippi river that HADN'T been hit by a hurricane.

Where would you propose people move that is free from natural disasters?  Hurricanes, tornadoes, earthquakes, hail, locusts, ice, drought, and fire alone cover practically the entire CONUS.

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RE: State Farm Insurance Cancels Thousands of Florida P... - 2/5/2010 7:09:58 PM   
DomImus


Posts: 2004
Joined: 3/17/2009
Status: offline
quote:

ORIGINAL: thornhappy

Guys & gals, NYC's been hit by a catastrophic hurricane before.  You'd have a hard time finding some place east of the Mississippi river that HADN'T been hit by a hurricane.

Where would you propose people move that is free from natural disasters?  Hurricanes, tornadoes, earthquakes, hail, locusts, ice, drought, and fire alone cover practically the entire CONUS.



If you can't understand the difference between living in a high risk situation and living in a low risk situation then maybe you should sit this discussion out.






_____________________________

"Regret for the things we did can be tempered by time; it is regret for the things we did not do that is inconsolable." Sidney J. harris

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