(Hit image to enlarge it.)Simple: If State Farm won't carry our property insurance don't let them do ANY INSURANCE BUSINESS IN THE STATE OF FLORIDA.
No cherry picking State Farm! Insurance Companies tried this years ago in New Jersey. When the State refused to let them write any auto policies they backed off.
20 comments:
Screw them!!!They cant get out soon enough.
Damn right. Insurance is founded on the principle of shared risk. There's no reason to limit the sharing to one industry, like auto insurance. The more profitable industries (again, like auto insurance) can balance less profitable ventures and provide stability horizontally across insurance types.
Throw them out...I agree! Why should the State of Florida let them do this?
This is a perfect example of when you should throw the baby out with the bathwater.
I was livid when i saw this letter in the paper this morning...Ive been with state farm for everything for over 20 years, ever since ive owned a home or a car...this really pissed me off.
The story on their pulling out of florida scared me, this ad turned it into rage..
screw state farm and their condacending attitudes...
couple of things to be concerned with
1. agents - man, they are screwed and this is not necessarily their fault
2. destabilization of insurance industry - I understand the NJ thing, but these are different times. How was their money invested? How stable are they? (how stable is anyone?).
3. more lost jobs in state at underwriting offices, this also is not their fault
Who's next? Not sure what to think of this one.
Reminds me of the Marlins; "If we don't get a new stadium, we will leave." Didn't happen. They cried until the unreformable gave them their way. I think State Farm is trying to scare people to put pressure on the regulators to give them their increase. Many companies have been cleared recently to draw policies out of Citizens. Let State Farm go away and take all their other insurance with them.
Last poster probably correct/
I have had state farm since I started driving at 16 (that was a few zillion years ago). My parents used them for years before that.
I would be panicked if I was their agent.
However, I don't like blackmail and that is what this seems like. The government never should have let insurance companies go into the banking industry. It bothered me when my agent was more interested in my financial status than my insurance policy.
And it bothers me even more when my credit rating becomes the major factor on my car insurance rate.
Excuse me, State Farm, but don't you care if my family and I drive safely or if we manage not burn the house down? I did not take your credit card offer, so what are you doing on my credit report?
Don't get me started about State Farm coming out and raising my coverage. I was covering the outstanding mortgage, which is all the mortgage company cares about. I could have rebuilt this house nicely from the ground up on my existing coverage. The agent decided that he was going to fix us and raised the coverage on it. He billed me and I paid it online through my mortgage company site. I lowered it right back to what I wanted. The site even allowed me to fill in the coverage amount I wanted, so I did, and that was still above what they requested, because they deducted land value and I didn't.
Grrrrrrrr. I think they need to take the good with the bad lines. Those us in business have to take the good and bad customers...we can't only pick the rich ones or the ones with good credit.
And.... I think it stinks that the insurance companies such as State Farm, incorporated "Florida" companies so their true incomes did not have to be figured into the risk. State Farm Florida is no more an independent company than the Keys are an independent nation. The secession was not exactly complete, in either case.
I'm another one that has had State Farm since I was old enough to need insurance.Going on 30 years.
I've had a couple of claims and was happy with my agents service.While I certainly don't want higher rates, I think whomever gets my business will just charge me more for less coverage and probably worse customer service.Not a happy thought.
This happened due to the state not giving them higher rates and capping their current rates. Saw this one coming. We will also see some more following suit soon enough. good game florida.
I guess in every case like this the emos outnumber those who will apply rational thought.
There is a reason that Citizen's Ins Co became the largest homeowner insurer in Florida - that is because the market is dysfunctional. If the free market was at work, Citizen's wouldn't exist. But our public schools teach socialism, and now this type of thing is fine with the majority of people (as our country nationalizes banks, brokerage houses, auto manufacturers and who knows what's next).
State Farm will lose market share in auto and their other lines.
My guess?
If State Farm could just BREAK EVEN on homeowners policies they would stay on and continue to insure homes.
As it is, they HAVE lost BIG money, ARE losing BIG money, and will CONTINUE to do so in the future.
And the demagogues in Tallahassee count on the emos to jump on their anti-capitalist bandwagon.
Welcome to the new amerika.
For the blogger who called me a pussy, I think my post was poorly worded, so let me put a few more sentences to this. I assure you, I am not a big lover of insurance companies. It's a very shady business.
I have three concerns:
1. The overall stability of insurance companies in this country in general. Think about it. There's AIG, and then there's all the others...don't you question everyone's ratings these days...just a little bit?
2. The stability of the Florida insurance market, in specific.
3. Job losses in the state as a result of the changing economic environment
I agree that State Farm should not cherry pick. Is this the company that formed a holding company for Florida, went to their own off shore reinsurance company to reinsure themselves and then used that as a basis to justify higher premiums? I think so, but it might have been one of the others.
Without writing homeowners', State Farm would have an unfair advantage to lower their auto rates and kill competitors. Other large companies won't stand for that, so we need to have the all in or all out rule here. I don't think we should leave it to the consumer. I think we should kick them out.
It has to be said, however, that the State must also respect the fact that we need to provide the appropriate and competitive environment in Florida so that insurance companies will want to continue to do business here.
If the state does not handle this right, the insurance market in Florida could be destabilized and we will all be buying insurance from companies with names like ACME and Speedy.
You are all writing very thoughtful responses --better than my "Throw the bums out" and you are writing the same very thoughtful responses (11) on Gimleteye's post. I see a trend.
What is it with all of you? Has everyone started thinking again, ...that is a change of pace from the past 8 years.
I am paying almost a 1000.00 more a year for fire than I was 5 years ago... the last time I looked at my mortgage amount/value it hasn't gone up. I made my first insurance claim since Andrew (what is that? 16 years) and the first one I can ever remember on my regular policy (26 years), not too long ago... I can't wait to see what state farm does with my bill.
Where is that money? In bonuses, in high dividends, in airplanes? These companies certainly do not over pay their rank and file employees, so the money has to be going somewhere.
Just think about AIG's latest stunt, giving bonuses to the very department that set up the funds that help put them under. That is a mere 1 million+ bonus to per employee in that department. Guess where the money is coming from?
State Farm looks to leave -- and to stay
MIAMI HERALD 1/30/09
OUR OPINION: Don't allow companies to cherry-pick lucrative policies
Ever since Hurricane Andrew battered South Florida, property-insurance companies have demanded more from customers in Florida while giving less in return. Now that state regulators have denied State Farm Insurance an untimely rate request for a whopping 47 percent hike, the company has decided to get out of the property-insurance business in Florida, leaving customers with 1.2 million policies in the lurch.
Not good for Florida
This may be a good business decision for State Farm, but it isn't for the people of Florida. The state has tried to accommodate property-insurance companies, at a cost to consumers in the form of higher premiums, personal exposure and more out-of-pocket expenditures to protect homes from storms. Among the actions:
• Reducing the risk to insurers by creating a state-backed company for the most vulnerable properties.
• Adopting new pricing mechanisms that produce higher premiums.
• Allowing for weaker coverage (higher deductibles) to limit payouts.
• Providing incentives for consumers to install protective upgrades, thus limiting damage and payouts.
• Allowing national companies like State Farm to create Florida subsidiaries that protect the parent company from risk.
New companies have been lured into the market by these actions, but for some these adjustments have not been enough.
It is not hard to see why insurers don't like windstorm policies. The risk is unpredictable, and payouts can be expensive. The only way to provide coverage that allows a profit, they argue, is to limit exposure, which Florida has done (see above), and collect high premiums. But Floridians are just about tapped out -- and homeowners are wondering if the actual goal isn't zero risk and maximum profits.
The state has to take corrective action to compensate for State Farm's decision. If the company won't write policies with a higher risk, it should not be allowed to cherry-pick other, more lucrative lines of business like automobile policies. These should become the province of companies willing to help Floridians protect their property by offering to write windstorm and casualty policies, as well. This should not be done to punish State Farm. It should be a business decision by the people of Florida to attract companies that can fill a void in our marketplace.
Face the problem
The larger message here is that Florida still has not fixed its windstorm-policy problem. The actions of one insurer are no reason to give up on the private market, but if existing insurance companies follow State Farm's lead, lawmakers must consider other options. If State Farm's decision causes state leaders to focus on the problem, the move may ultimately be a blessing in disguise.
You'll have to admit that it is very costly to provide homeowner's insurance to much of southern Florida. Decades ago, when builders took into account the incliment weather when designing and constructing sparse homes, it was doable but still risky. Now that every wanna be BuilderCorp and scam artist has moved in and thrown up poorly constructed, high density crap, and the local zoning boards sign off on it, the costs have skyrocketed. Even with the newer BOCA codes, most construction is still not resilient enough to withstand the approximate once per decade losses incurred from severe hurricanes. This isn't just greed on the part of State Farm. (Although there is plenty of avarice to go around from all insurers these days.) Many in S. FL live in extremely high risk areas in buildings not properly designed to withstand the harsh yet predictably reoccuring harsh weather. I've watched as the panhandle is wiped clean every decade or so, and each time the McMansions are wiped off the earth while the old cinder block houses are left standing. A bit worse for wear, but still standing with roofs intact.
My point is that you cannot realistically live in a multi-level, chipboard roofed McMansion in hurricane alley and not expect to have the roof ripped off - or worse - during high level winds. Why should some slob in Arkansas be forced to subsidize the losses incurred in S.FL, since he chose to live in a place not afflicted by such calamities? A realistic reassessment of lifestyles and more cooperation with nature's fury while building might be in order before a wholesale condemnation of the insurance industry - and I'm certainly NO fan of the latter. Perhaps the state should develop something along the lines of the govt. underwritten flood zone insurance adopted in other states. Stricter, realistic building codes and publicly underwritten insurance for those who choose to live in paradise. And yes, you would have to fund through property taxes levied at rates commensurate with risk.
I'm old enough to remember when auto insurance was not mandated by state law - and it was competitivly priced. Now they are shooting fish in a barrel - they can charge whatever they want because people cannot say "No" and the companies co-op in setting rates. I've not had an accident attributable to me in over 30 years. But I have to pay for people who pay no attention, talk on cell-phones while driving, and wreck two cars a year. Is it right to ask me to pay for other's stupidity? Hell No.
Are insurance companies bad citizens? Many are, but State Farm isn't the worst and has had a fairly good reputation for many decades. Allstate, however, and many of the other newly formed companies who offer "minimum legal coverage for a price" companies are money mills.
Just offering some perspective on the plight...
hmm. Dr. Know is a curmudgeon that likes Pearl Jam. Interesting combination. I would have thought a curmudgeon might more likely be a Frank Sinatra fan. Dr. Know, we subsidize the floods, the tornadoes etc. in other places...like Arkansas. It is only fair to share the loss. Yes, i do agree Dr. Know, i don't like paying for people who use their cell phones (Texting yet!) while they drive.
The etymology of the word curmudgeon has eluded us for at least two centuries, although lexicographers haven't yet attached old age or a preference for "Brat Pack" music as a requirement for its use.
Yeah, Filter, Tool, Pearl Jam, Smashing Pumpkins, Bob Dylon, Allman Brothers, Elvis Costello, Bluegrass - they're all good. I'm not dead yet!
Dr. Know, you rock!
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