28% Increase for State Farm property insurance premiums for Florida customers
(I hope everyone else will remember to tell State Farm to stick it where the Sun don't shine.)
State Farm customers losing discounts
JACKSONVILLE, Fla. – Sept. 9, 2009 – State Farm Florida customers will lose some money-saving discounts for property insurance when policies come up for renewal after Dec. 1.
The state Office of Insurance Commission granted State Farm Florida’s request to drop several discounts that lower property insurance premiums. Those discounts are tied to factors such as having a history of low claims, having an alarm system, and using State Farm for both property and automobile insurance.
State Farm is the biggest property insurer in Northeast Florida. It counts about 68,000 polices in Duval County.
Eliminating the discounts will increase property insurance premiums for State Farm Florida customers by a statewide average of 28 percent. The impact on individual customers will vary widely. Some customers will see no change, while others face increases of more than 28 percent, according to State Farm.
State regulators rejected another request by State Farm to reduce discounts tied to building features such as storm shutters that protect homes from destructive weather.
State Farm Florida still intends to withdraw from Florida’s property insurance market. The elimination of discounts will generate revenue the company needs to “help slow its financial deterioration and better ensure it can fulfill its obligations to its customers,” company President Jim Thompson said in a statement.
State Farm Florida spokesman Chris Neal said the biggest change will be for the discount that rewards customers based on their history of filing few or no claims. Weather-related claims don’t affect that discount, which is based instead on claims such as fire damage, and theft.
Depending on the customer’s history, losing that discount will boost premiums by 5 to 20 percent, he said.
Customers who use State Farm for home and auto insurance will lose the multi-policy discount on their property insurance coverage. However, they will still get a discount on their auto insurance premium for having both home and auto insurance with State Farm.
Neal said the elimination of the discounts will occur as customers’ policies come up for renewal after Dec. 1. State Farm will send renewal letters 100 days in advance of policy renewals so customers can see what their premiums will be without the discounts.
Theo Mitchelson, a State Farm agent in Jacksonville, said there are ways for customers to lower premiums by analyzing the amount of coverage and raising their deductibles. He said he’s been having those conversations already with customers who are trying to control household spending in the recession. He added that many State Farm customers who shopped around for coverage from other companies have found State Farm’s rates are comparatively low.
© 2009 The Florida Times-Union, David Bauerlein; via ProQuest Information and Learning Company. All rights reserved.
No storms - $0
Recession - $0 extra to spend
Jacking up premiums before leaving the market - priceless!
09-09-2009, 10:54 PM #4
I'm watching this closely. We have two homes and five cars insured with State Farm (and only one claim -- a small-figure auto claim -- in 25 years). Through all of these hurricanes, we've never had to file a single homeowners claim. If they price our homes out, we'll take all of our business elsewhere. We've been kind of lazy in comparison shopping...I'm now in the process of pricing both home and auto with other companies.
09-10-2009, 06:15 AM #5
is there any hidden cost for it?
Remember that State Farm is pulling only the housing insurance out of Florida. The auto will remain, and this average increase of 28% per customer premium, will be on autos. I'm still wondering if the "average increase" will be 28%, what will be the high end?
SneakyPete, better shop fast, because it sounds as though you are probably maxing out those discounts, and should be one of those customers hit with a 28% increase in rates, or worse, even more, seeing that the average increase is expected to be 28%.
fredosmith, I'm not sure what you are asking about. Would you care to elaborate?
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