Live near the beach? State Farm not there
Jan 25, 2008
The Florida Times-Union
January 25, 2008
Live near the beach? State Farm not there
By LARRY HANNAN,
The Times-Union
State Farm Insurance, Florida’s largest private home insurer, has begun dropping property coverage for 50,000 Floridians as part of a rate reduction agreement with the state.
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Even though Jacksonville hasn’t had a major hurricane since Hurricane Dora in 1964, almost everyone who lives within a mile of the ocean will not be allowed to renew coverage.
“With Florida surrounded by water, anything near the water is a high risk,” State Farm spokeswoman Michal Connolly said Thursday.
The company, which has more than 1 million customers statewide, refused to provide an estimate of how many local homeowners stand to lose coverage.
The vast majority of those will have to get insurance from Citizens Property Insurance Corp., a state-created insurer of last resort. About 1.25 million Floridians are insured by Citizens.
Its rates are about the same as what State Farm charges, said spokeswoman Christine Turner. But she stopped short of guaranteeing that all affected home-owners will be able to find comparably priced insurance.
She encouraged people to shop around.
“We’re seeing the market start to pick up,” Turner said. “I wouldn’t just assume that Citizens is the only place where you can get insurance.
The cost of property coverage typically ranges from $1,000 to $3,000 a year, depending on the value and location of the home, State Farm agent Matt Carlucci said.
The dropped coverage is part of a rate reduction agreement with the state last summer. The company agreed to slash rates by 9 percent in exchange for permission to drop 50,000 policyholders living near the ocean. The company promised to hold off on the cancellations until after hurricane season ended Nov. 30.
The customers are getting at least 125 days’ notice, Connolly said.
The agreement will result in a savings of about $23 million to the remaining State Farm policyholders, said Tom Zutell, a spokesman for the office of Insurance Regulation.
Carlucci has been informing his customers of the cancellations.
“The toughest thing I’ve had to do in my career is call the 50 or so clients I have at the beach,” said Carlucci, a former City Council member. “But I wanted them to hear it from me, and not find out by getting a letter or reading about it in the newspaper.”
Florida has been in an insurance crisis for the last few years with many private companies contending they can’t make money in Florida.
State Sen. Jim King, R-Jacksonville, said the situation concerns him.
“I know a lot of people think all the people on the beach have a lot of money, but that’s not true of everyone,” he said. “There are a lot of people living near the beach on fixed incomes.”
King expects homeowners insurance to be a big issue for the Legislature in March but concedes there is no easy fix.