Well I am upset today. State Farm is trying to pull out of Florida for homeowners insurance but wants all their customers to keep using them for auto insurance! What! No Way! I have been with State Farm since 1980 and this is how they treat old long-time customers. I did not hear there have been an extraordinary amount of home fires or home thefts that would cause State Farm to have tremendous losses. I will be looking around on Monday. THANKS ALOT STATE FARM!
I have more to add 2/10/09
I see what you are saying-- but in todays paper 2/10/09 here is a quote."State Farm said it's losing $20 million per month, in part because of discounts it's giving under state law to customers who fortified their homes against hurricanes. The company earned $134 million in 2006, $108 million in 2007 and lost $199 million in 2008, largely due to its agreement with the state last year to refund $120 million to customers who didn't receive the so-called mitigation discounts. But as of late last year, it had $621 million in reserves."
If you take the two years without the refund amount you see an earnings of 43mill. Yes it had to give back 120mill because it overcharged alot but that was a one time thing. Also this is an old time insurance company that had profits for years and years. Sure they did have some hurricane losses -- but that was in certain areas of FL not ALL of FL. And they also pulled out of windstorm coverage in South FL years ago. If they were afraid of windstorm losses they could have pulled out of windstorm coverage for all of coastal areas but kept inland coverage and also kept all other homeowner insurance. I have NEVER read that fires or theft are putting them out of business.
The conspiracy junky in my thinks its because they are overinsuring homes (ie because so many people bought when home prices were high they got mortgages for the high amount but Oh Oh the homes are not worth that but the homeowners are required to have ins to cover the mortgage--and State Farm is afraid they would be holding the bag on the overinsurance!). Thats what I think is the REAL reason.
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4 comments:
what creeps. They sound like they need to be boycotted big time- rise up! Let them know why you have auto insurance from another carrier too- you'll enjoy making that call
gera- from Canada
I know you're upset but if you understood the issues, you might not be so angry...
Since 2000, State Farm Florida has paid out $1.21 in claims and expenses for every $1 of premium income received, totaling $1.4 billion more in claims and expenses than it has collected in premiums. Since Jan. 2008, State Farm Florida’s surplus decreased from $820 million to $621 million.
In November, 2008, State Farm Florida reported its third-quarter operating results to the Florida Office of Insurance Regulation (OIR). The publicly-filed report shows a loss of $198.6 million for the first three quarters of the year and a decline of nearly $202 million in State Farm Florida’s surplus – and that’s without a major storm. State Farm Florida experienced a $217 million underwriting loss for the first three quarters of 2008 that compares to an underwriting loss of only $13 million through the same time period last year. Other significant results were:
* Earned premium decreased $156 million due to a state-mandated expansion of Windstorm Mitigation Program discounts and a decrease of policies in force.
* Non-catastrophe losses increased $89 million (29.7 percent) and catastrophe losses increased $34 million (106.4 percent), primarily due to losses incurred after Tropical Storm Fay.
* The underwriting loss combined with earned investment income and other income resulted in a pre-tax operating loss of $300 million.
you can read more details about how the State of Florida is contributing to the problem here: http://www.statefarm.com/about/part_spos/community/sflocal/florida/rate_proposal.asp
I see what you are saying-- but in todays paper 2/10/09 here is a quote.
"State Farm said it's losing $20 million per month, in part because of discounts it's giving under state law to customers who fortified their homes against hurricanes. The company earned $134 million in 2006, $108 million in 2007 and lost $199 million in 2008, largely due to its agreement with the state last year to refund $120 million to customers who didn't receive the so-called mitigation discounts. But as of late last year, it had $621 million in reserves."
If you take the two years without the refund amount you see an earnings of 43mill. Yes it had to give back 120mill because it overcharged alot but that was a one time thing. Also this is an old time insurance company that had profits for years and years. Sure they did have some hurricane losses -- but that was in certain areas of FL not ALL of FL. And they also pulled out of windstorm coverage in South FL years ago. If they were afraid of windstorm losses they could have pulled out of windstorm coverage for all of coastal areas but kept inland coverage and also kept all other homeowner insurance. I have NEVER read that fires or theft are putting them out of business.
The conspiracy junky in my thinks its because they are overinsuring homes (ie because so many people bought when home prices were high they got mortgages for the high amount but Oh Oh the homes are not worth that but the homeowners are required to have ins to cover the mortgage--and State Farm is afraid they would be holding the bag on the overinsurance!). Thats what I think is the REAL reason.
I'm not too fond of State Farm's policies, either. We've been "allowed" to keep our homeowners' insurance but after Katrina, State Farm stopped writing new homeowners' insurance policies in Mississippi. I'm not sure who we'll use if/when we move. We don't want to stay in our poky little house, forever.
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