Community | February 04, 2010 | 49 comments

State Farm Cancels 125,000 Florida Policies in Preparation of 2010 Hurricane Season

source: http://www.msnbc.msn.com/id/35220269/ns/business-personal_finance/

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jmsrmy
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. State Farm stopped writing new policies and sought the increase a year ago, saying severe losses from a series of devastating hurricanes in recent years had rendered its business model unworkable. It said that without the large increase, it would be insolvent by the end of 2011.

The losses for State Farm are especially large because it is the largest insurer in the state. But the insurance industry across the board has been slammed by heavy hurricane losses in recent years, most notably from hurricanes Ivan (which caused $8.9 billion in damage) and Frances ($8.3 billion) in 2004 and Wilma ($20.6 billion) in 2005.
(MSNBC, 2010, February 3, para. 1-4)

More details:
http://www.msnbc.msn.com/id/35220269/ns/business-personal_finance/
  1. groups:
    Community,   Corporate Crime
  2. tags:
    Florida,  Hurricanes,  hurricane season,  Statefarm
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49 comments // State Farm Cancels 125,000 Florida Policies in Preparation of 2010 Hurricane Season

  • jjammedjr
    • +1
      jjammedjr [removed]  

    • All of the Florida bashing on this site is getting FUCKING RIDICULOUS.
      If ANY of you lived here you would know what the actual situation is down here. The majority of the pre 2004 policies were sold to MOBILE HOMES that RETIREES FROM ALL OF YOUR STATES moved into when they came here....
      ONCE AGAIN MY STATE IS POISONED BY OUTSIDE ELEMENTS BUT YOU NARROW MINDED PUTZS LUMP US ALL TOGETHER.
      Even the luxury homes than were destroyed were owned by people FROM OUT OF STATE. THEY WERE JUST WINTER HOMES!!!!!!!!!1

      IF YOU ARE NOT INFORMED THEN KEEP YOUR FUCKING MOUTH SHUT, YOU LOOK BIGOTED AND STUPID !!!

    • 2 years ago
  • QuestionGeek
    • 0
      QuestionGeek  

    • So far I've only seen the name of one company/corporation mentioned--- "State Harm". What about the other insurance companies, are there bad ethics the same?

    • 2 years ago
  • QuestionGeek
    • 0
      QuestionGeek  

    • In California we can build homes and tall buildings that are earthquake proof. Maybe they should learn how to build homes that are hurricane proof in Florida.

    • 2 years ago
  • QuestionGeek
    • +1
      QuestionGeek  

    • How many of you remember this one? --> Now sing with me, "Just like a good neighbor.......State Farm is there."

      Ha! Whatever. If State Farm were my neighbor, I'd move quickly.

    • 2 years ago
  • tommic
    • +1
      tommic  

    • Profits over people, What will State farm do when a major hurricane finally hits metro new york & new jersey and have to pay out tens of billions. Go out of business. Just what they deserve

    • 2 years ago
  • trut
    • +1
      trut  

    • How many times do you have to be bailed out in Florida? Maybe you don't know how to build houses yet there. De-volution?

    • 2 years ago
  • EthicalVegan
    • 0
      EthicalVegan  
    • trut:

      To whom are you addressing this latest statement?

      If you meant me, I don't live in the State of Florida. But, I also DON'T know how to build houses. Major shortcoming on my part, perhaps? Can you teach me?

    • 2 years ago
  • jjammedjr
  • trut
  • EthicalVegan
    • 0
      EthicalVegan  

    • I can't take much more of this.

      There are human beings who are born in areas just because they were BORN in those areas. They struggle to make ends meet and, no matter what, they can't seem to get ahead. And so they stay living where they were born.

      That is just how it IS.

      And the little children can't move out on their own -- they're just innocent little children who were BORN there.

      I've not yet met a human being who "CHOSE" to be born in a specific place. And to think it's "EASY" for folks to sell their homes (and probably for pennies on the dollars), uproot their lives so completely, and then pay to move, and then pay to live in a new location..... well, most folks can't do it (emotionally, physically or, especially, financially).

      And tell me where in the U.S.A. -- or, for that matter, anywhere on earth -- it's a guaranteed safe place to live?

    • 2 years ago
  • bluestranger
  • Progresshiv
  • trut
    • -1
      trut  

    • No one forced anyone to buy homes in these hurricane prone areas. Floridians should work with the gov't to set up a insurance agency for the entire state. Why should the rest of the union be saddled with high premiums to rebuild Florida every few years?

    • 2 years ago
  • eternal_springs
    • +1
      eternal_springs  
    • trut:

      Of course not, we'll just live out in the open. And we'll have to make sure that out-of-staters (the snowbirds and others) have to stay out. After all, why should Floridians be saddled with increased prices on goods and services just because so many northerners choose to come down here to visit?

    • 2 years ago
  • trut
  • eternal_springs
    • +1
      eternal_springs  
    • trut:

      Oh sure.....I guess that's why it takes me twice as long to get to work as it does during the summer.....all those vehicles from other places. Nope, they didn't come down here.

    • 2 years ago
  • trut
  • eternal_springs
  • EthicalVegan
  • trut
  • EthicalVegan
    • +2
      EthicalVegan  
    • trut:

      trut be told, I don't live in Florida. I just care about those people as much as I care about people everywhere in the world.

      ...And I have a fireproof tile roof.

    • 2 years ago
  • manny0409
    • +1
      manny0409  

    • of course they would do this...it is so ridiculous to hear stories like this every single day. These companies respond to every criticism like they are suffering tremendous loses and yet they pay millions of dollars to their top executives who sit around and do nothing but think about where they can cut more losses and hurt more Americans, leaving them out in the cold. like a good neighbor my ass...

    • 2 years ago
  • kilo88
    • +1
      kilo88 [removed]  

    • it was the people's choice to live in a hazardous weather prone area, they should expect difficult insurance policies it comes with the territory, besides they wrote specific contracts with State Farm and should have researched the risks involved, if State Farm has violated the contracts then they should be taken to court but if not I see no reason that State Farm has done anything wrong

      I know I might sound cold but I'm trying to look at it objectively, rich or poor, people should know the risks and except not to be subsidized for their choice of residence, and it seems like State Farm wouldn't have cancelled if the state regulators would have allowed them to increase rates, this sounds bad but a rate increase is better than full cancellation

    • 2 years ago
  • eternal_springs
    • 0
      eternal_springs  
    • kilo88:

      Most places in the USA have "hazardous" weather, depends on the time of year.

      The housing market in the southernmost states went crazy because people wanted to get rich by buying up land and homes, then turn around and sell them at a profit. As those prices go up so does the insurance. The cost of insurance is totally ridiculous.

      Of course, since those of us who chose to live in a hazardous weather area should just quit our jobs, take our kids out of school, abandon our homes and go somewhere there is NO hazardous weather and hope we can find a job and a home.

      Record profits at the expense of people is just wrong.

    • 2 years ago
  • kilo88
    • 0
      kilo88 [removed]  
    • eternal_springs:

      if the price is totally ridiculous then homebuyers should not bother then or move to a place where it is affordable, life is about choice and taking responsibility for those actions, companies don't make money by hurting people because the would start loosing customers and a company with better service and lower prices would take that market share, and besides, it was the state regulators that caused the cancellation, State Farm seemed willing to stay in Florida but since they weren't able to turn a profit they had to leave, profits sound terrible in the world of insurance but that's how system works when people buy risk from other people, otherwise without the incentive to turn a profit there wouldn't be any insurance

    • 2 years ago
  • QuestionGeek
    • 0
      QuestionGeek  
    • eternal_springs:

      Well Southern California is not one of those "most places" you are talking about. The only thing you have to worry about here is earthquakes and an occasional mudslide. However avoiding those is easy. Don't buy a house on a hill or at the bottom of a cliff. Homes in those locations are mega -expensive anyhow. And earthquakes are not an enduring discomfort. Most earthquakes are not severe, they are just tremors (a light shake rattle and roll)

    • 2 years ago
  • QuestionGeek
    • 0
      QuestionGeek  
    • kilo88:

      If hurricane insurance is not mandatory, then why have it? Especially if companies are going to shank you like this. Anyway you look at it this is deplorable of State "Harm" Insurance

      The same thing was done during the Katrina disaster, except worse. They did whatever they could to not pay the claims. Sinister.

    • 2 years ago
  • kilo88
    • 0
      kilo88 [removed]  
    • QuestionGeek:

      it was not ethical wrong or deplorable of State Farm, I know this sounds like a terrible statement but if State Farm was loosing money then the company would have to do what it could in the legal boundaries of the contracts they signed in order to not go bankrupt, that would led everyone who had State Farm without insurance then

      I'm not trying to be a jerk, I'm just trying not to use my emotions to get the better of me, yes this is an unfortunate action but if i start getting angry I may loose my objectivity and trying to see both sides of the argument, it isn't totally State Farm's fault in this but I can fathom that they did instrument it along with the people who wanted to live in hurricane alley but not taking adequate measures with the contract, and the Florida state regulators who did care about the citizens' rates going up but when intervened only left them without insurance (not well thought out)

    • 2 years ago
  • bethopea
    • 0
      bethopea  
    • kilo88:

      people do not understand the meaning of the phrase 'it's just business - nothing personal' offence is always taken. look, businesses/corporations they are not out to help you - they provide a service and based on demand of the product prices either go up or down. they are in the business of maikng money, not losing it or giving away free-bees.

    • 2 years ago
  • EthicalVegan
    • 0
      EthicalVegan  
    • QuestionGeek:

      QuestionGeek, you wrote: "Well Southern California is not one of those "most places" you are talking about. The only thing you have to worry about here is earthquakes and an occasional mudslide."

      I lost everything in the Northridge earthquake. Well, the exterior walls of my townhouse stayed together, but everything inside was wiped out. I'm still dealing with repairs I can't afford to make, and I'm sure still missing all my "memory possessions."

      Those "occasional mudslides" are devastating. They've killed people, you know. But I understand that you're saying, then don't BUILD there.

      We also have horrendous firestorms, where millions and millions of animals are killed, and dozens of people are oftentimes killed, and hundreds and hundreds of humans lose their homes (and everything else).

      There's always the SLIGHT (I know this one sounds far-fetched) chance of a major Tsunami.

      But we've also go poverty, disease, homelessness.... oh, hell, you get the picture, and I know I'm coming off the wrong way, because I'm tired, aggravated, frustrated, disappointed, and a whole lot else this afternoon, here in Southern California.

    • 2 years ago
  • eternal_springs
  • eternal_springs
    • 0
      eternal_springs  
    • QuestionGeek:

      I don't like the feel of the earth moving around under me. LOL There are dangers, hazards, unpleasantness, disasters, ...no matter where one goes. Yes, there are those that attempted to live beyond their means. However, I know way too many who didn't try, and are in the process of losing almost everything......through NO fault of their own.

    • 2 years ago
  • Elligirl
    • +1
      Elligirl  
    • Image

    • Is this the same company?

      http://www.insurancejournal.com/news/national/2007/03/07/77498.htm

      "State Farm Insurance's chairman and CEO received an 82 percent raise after the company posted a record profit last year, a statement from the Bloomington-Ill.-based insurer said this week....

      The absence of a major catastrophe helped the insurer generate a record $5.32 billion profit last year, compared to $3.24 billion in 2005 when Hurricane Katrina hit the Mississippi Gulf Coast, release said."

    • 2 years ago
  • sk0j0
  • ignignokt
  • Logos51891
  • eternal_springs
  • carmalite
    • +2
      carmalite  

    • Oh our sweet for profit corporations doing what they do best. Hey let the people in Flordia go the way of Hati, because our CEO making 80 million a year is most important of all.

    • 2 years ago
  • EthicalVegan
    • +3
      EthicalVegan  

    • Infuriating!

      After the Northridge earthquake in 1994, we learned that State Farm had dropped all our policies. Our homes, townhomes, condos were in horrible condition here in Santa Clarita (California), and we got DROPPED! I still have damage I've never been able to afford to have repaired, and our HOA lost all our money.

    • 2 years ago
  • bansheewail
    • 0
      bansheewail  

    • FEMA put out new flood zone maps this year, here in SC. My friends on the beach or on the surrounding islands lost their home owners/flood insurance, too. The insurance companies will only insure something they think they will never have to pay out on. And even then, they may not pay out when you really need it. The high tides and rain flooding in downtown Charleston has gotten lots and lots worse over the past five years. I wonder why that is????

    • 2 years ago
  • trut
    • 0
      trut  

    • I wonder if State Farm knows something the rest of us don't. Really though, if someone doesn't want to insure your house they shouldn't have to. Too risky.

    • 2 years ago
  • pjacobs51
  • jjammedjr
    • +1
      jjammedjr [removed]  

    • I live smack dab in da middle of Fla.
      State Farm is pulling the same shit here but only using different excuses.
      After 50+ yrs of sucking the Florida policy holders dry the crows have come home to roost. State Farm has manipulated Gov. and Citizens alike for so long, Karma is now afucking their profits in the ass...

      scuse the french.

      We trumpeted Capitalism for so long, how ironic it is that it has destroyed our great nation.

      fuck the man

    • 2 years ago
  • FoosMaster
    • 0
      FoosMaster  

    • The problem is that it will never be profitable to insure homes in costal areas like that and a business needs profit to survive. The bigger problem is that now, the government will insure those homes for a small price. Then when something happens the taxpayers will have to foot the bill for rebuilding the homes for the rich people that have those homes in the areas that they know are dangerous. More bailouts for the rich!
      I say; “No More Government Bailouts for the rich!” If they want to have a home in those areas then let them take the risk themselves and when something happens then only they are responsible for the cost, not the American public!
      Yes I know that not everyone there is rich, but many are and anyone, rich or not, knows the risks they are taking by living in that area so they should be responsible for themselves, not the taxpayers!

    • 2 years ago
  • Seraphina76
  • eternal_springs
    • 0
      eternal_springs  
    • Seraphina76:

      Exactly!! I'm not on the coastline, and I'm certainly not rich....but we were hit hard by Jeanne, Francis, and Wilma. The only help we got was a very small amount from FEMA that didn't come close to getting a new roof.

    • 2 years ago
  • FoosMaster
    • 0
      FoosMaster  
    • FoosMaster:

      Yeah, my friend in Conway, SC feels he is not on the coast because he is 12mi. inland and he bought a house without any hurricane insurance. He is my friend and I will help him if needed, but I do not believe that the government should bail him out if a hurricane comes along and wipes out his house. My mother lives 55mi. inland in Florence, SC which is still prone to hurricanes (Hugo) but she has insurance to cover that kind of damage like when Hugo messed up her place. I don't know where the line is but if you can't get hurricane insurance where you live and you live in an area that is susceptible to hurricanes then you are taking a gamble when you buy a house and the government should not bail out gamblers.

    • 2 years ago
  • Lecti
    • 0
      Lecti  

    • Good luck finding the smoking gun that says 'hey we're canceling policies b/c we think this hurricane season is going to be especially bad'. If you look around, there aren't many companies willing to insure unless it's at least 100 miles from the coast (usually where a hurricane or tropical storm levels off into rain) and those that do put in special language in their policies to exclude the type of damage caused by those events.

      At the end of the day you have a [loosely] regulated industry that sells contracts. These contracts say exactly what they will do in the event that something Sudden and Accidental results in direct physical loss to property you own.

      That aside, every state Dept of Ins is responsible for getting their citizens the best coverage possible, but just like we saw with the FAA and other regulatory agencies the last few years, it seems they are more beholden to corporations than anything.

      Really though that's all a bit irrelevant b/c what it comes down to is your experience with your adjuster once you have a claim. That experience dictates your whole view on the situation. So, hopefully you get a good adjuster. But if you're talking Hurricanes, then you're dealing with a volume business and you're probably going to get some guy from Indiana who really doesn't want to be in FL anymore than you want him on your roof.

      Oh yeah, almost forgot a solution. Instead of having 50 broken DOI's, create 1 federal DOI that breaks the US up in to 5 or 6 unique weather regions where coverage is dictated based on geography and common weather.

    • 2 years ago
  • HowdyDo
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