COLUMN: State Farm customers have other choices
Jul 22, 2008
Florida Today--July 22, 2008
It’s not that I favor State Farm’s huge proposed rate hike for homeowner’s insurance.
What I meant — when I wrote Sunday that State Farm should go ahead and raise rates — is that the market has improved, customers have options and insurers should be able to position their products differently. If State Farm wants to sock it to loyal customers, the customers can go elsewhere or stay for the perceived safety and pay double or triple their neighbors’ premiums. Just like some people pay more to drive safe Chevy Suburbans.
Now, that drew some interesting feedback.
“All I have to say is you must be looking for public office sometime in the near future and have drank from the cup of insurance baloney,” Ed Turkowsky of Merritt Island wrote in an e-mail. “Your article failed to mention record profits by State Farm, Bloomington, and how State Farm Florida is nothing more than a shill company to show losses to our gullible politicians and cronies.”
In our online forums, reader Cappy43 posted this: “I’m beginning to think Matt Reed is delusional. Thinking State Farm is such a good neighbor and runs around handing out checks is just plain crazy. The state of Mississippi had to sue to get them to pay claims. Matt, wake up and join the real world that has to deal with these insurance companies.”
For a good in-depth thumping of the industry, see our “Insurance Storm” special report posted at floridatoday.com/watchdog.
Capitalism rules
Meanwhile, other readers confirmed my observation of an improving market with more choices.
“Matt, your timing (and clairvoyance) is impeccable,” wrote Mark Byrnes of Rockledge, who attached a letter to his State Farm agent canceling policies on his boat and 1999 Suburban. “I was one who feared ‘letting go’ because I wanted the ‘best or safest.’ Not anymore. I’m free.”
Online reader NRAbenefactor posted this: “Mr. Reed’s basic position is that of ‘market forces,’ not ‘collectivist-government forces.’ I’m startled yet pleased to commend him for the first time.”
And online poster GIRetired wrote: “Shop around. I had Universal and it was due for renewal in August for $1,800. I found another with about the same coverage for $919. I got $500 back from my escrow and my monthly payments dropped nearly $70 per month.”
Lowest prices
Several of you demanded to know where I came up with the competitive prices cited in Sunday’s column. The figures come from a state consumer Web site — ShopandCompareRates.com — which shows a county-by-county breakdown of approved prices.
It lists State Farm as charging $3,215 per year for a “concrete block home, with a current replacement value of $150,000, a $500 non-hurricane deductible, a 2 percent hurricane deductible, no claims, and no wind mitigation discounts.”
The five lowest prices in Brevard County for the same policy, according to the site:
# Security First: $1,034
# American Traditions: $1,237
# Allstate Floridian: $1,290
# Olympus: $1,325
# Royal Palm Insurance: $1,334
Except for Allstate (which also sells Royal Palm), you have to contact an independent insurance agent in the phone book to reach the newer up-and-coming companies such as Security First or Olympus.
Repeat: Phone book.