state insurance
State Farm might not pull out of Florida's homeowners insurance market after all, Florida Insurance Commissioner Kevin McCarty said today.
McCarty said he's "cautiously optimistic" that State Farm will keep at least some of its homeowners policyholders in Florida. Bloomington, Ill.-based State Farm is Florida's largest private insurer of homes, and it said in January that it would stop writing property policies in Florida, where it covers 700,000 homes.
"We've really been having intense negotiations with the company at very high levels," McCarty said today in an interview with The Palm Beach Post.
Neither McCarty nor a State Farm spokesman offered details of the negotiations.
"We don't want to talk about it publicly until we reach an agreement," said State Farm spokesman Chris Neal.
McCarty predicted State Farm will stay in Florida but will have a smaller presence. That could be good news for homeowners, who have seen premiums soar since Hurricane Andrew roiled the state's insurance market in 1992.
"A leaner, smaller State Farm in Florida is better than no State Farm in Florida," McCarty said.
Bill Newton, executive director of the Florida Consumer Action Network, agreed that homeowners will benefit if State Farm stays in Florida.
"It increases competition in the marketplace," Newton said. "For them to drop all those policies would have been disruptive, and I'm not sure the market would easily have absorbed it."
Citing losses and the risk of hurricanes, State Farm said it needed a big rate increase to continue conducting business profitably in Florida.
The company last year asked McCarty to approve a 47 percent increase. McCarty rejected the increase, saying State Farm didn't justify the large rate hike. State Farm said in January that it would pull out of the property market in Florida, though it still will sell auto, life and health coverage.
State Farm has yet to drop any policies in Florida. If it pulls out of the homeowners insurance market in Florida, an exit plan must be approved by state regulators. An October hearing on State Farm's withdrawal was postponed.
Newton said it appears McCarty called State Farm's bluff — and won.
"I'm cynical, but I thought it was a poker game all along," Newton said. "State Farm has a good book of business. Why would they walk away from it?"
State Farm might not pull out of Florida's homeowners insurance market after all, Florida Insurance Commissioner Kevin McCarty said today.
McCarty said he's "cautiously optimistic" that State Farm will keep at least some of its homeowners policyholders in Florida. Bloomington, Ill.-based State Farm is Florida's largest private insurer of homes, and it said in January that it would stop writing property policies in Florida, where it covers 700,000 homes.
"We've really been having intense negotiations with the company at very high levels," McCarty said today in an interview with The Palm Beach Post.
Neither McCarty nor a State Farm spokesman offered details of the negotiations.
"We don't want to talk about it publicly until we reach an agreement," said State Farm spokesman Chris Neal.
McCarty predicted State Farm will stay in Florida but will have a smaller presence. That could be good news for homeowners, who have seen premiums soar since Hurricane Andrew roiled the state's insurance market in 1992.
"A leaner, smaller State Farm in Florida is better than no State Farm in Florida," McCarty said.
Bill Newton, executive director of the Florida Consumer Action Network, agreed that homeowners will benefit if State Farm stays in Florida.
"It increases competition in the marketplace," Newton said. "For them to drop all those policies would have been disruptive, and I'm not sure the market would easily have absorbed it."
Citing losses and the risk of hurricanes, State Farm said it needed a big rate increase to continue conducting business profitably in Florida.
The company last year asked McCarty to approve a 47 percent increase. McCarty rejected the increase, saying State Farm didn't justify the large rate hike. State Farm said in January that it would pull out of the property market in Florida, though it still will sell auto, life and health coverage.
State Farm has yet to drop any policies in Florida. If it pulls out of the homeowners insurance market in Florida, an exit plan must be approved by state regulators. An October hearing on State Farm's withdrawal was postponed.
Newton said it appears McCarty called State Farm's bluff — and won.
"I'm cynical, but I thought it was a poker game all along," Newton said. "State Farm has a good book of business. Why would they walk away from it?"
