Calm Before the Storm
State Farm Florida has entered into a consent order with its state insurance regulator that will help the company to stabilize its financial condition by reducing its exposure to catastrophes and raising premiums. The Florida property insurance market is under enormous pressure; 102 of the 210 private property insurers operating in the state are losing money. Three went out of business in the last year. The consent order allows State Farm to non-renew no more than 125,000 of its 810,416 residential property insurance policies in Florida. Those policyholders designated for non-renewal will have at least six months’ notice and will be offered other insurance options. The new rates will go into effect as the remaining policies are renewed. State Farm Florida will remain the largest private insurer of property in the state and was granted a 14.8% rate increase on all homeowners’ policies. Policyholders need not take action at this time, but those of us who have looked at the declining property market in Florida need to take into consideration the rising costs of homeownership there.