Make us your home page

New companies, Citizens ready to take State Farm's insurance load

What happens when Florida's biggest private homeowners insurance company puts a moratorium on writing new business?

Regulators are hoping there will be enough smaller companies to pick up the slack.

Last Friday, State Farm joined Allstate, Nationwide and several other large insurers in a moratorium on new homeowners policies. They'll insure properties they already have, but no more.

Florida insurance regulators take solace on two fronts: State Farm wasn't writing that much new homeowners business anyway, and since January 2006, the state has licensed 22 new insurance companies to write policies.

"Having that many new companies come here after the hurricanes of 2004-05 shows an appetite for the homeowners market in Florida," Tom Zutell, a spokesman for the Florida Office of Insurance Regulation, said Monday.

The most recent data available shows that as of Oct. 1, 2007, the new companies represent 8 percent of the homeowners market, or about 325,000 policies. But four of the new companies are scheduled to remove about 250,000 policies from state-backed Citizens Property Insurance this year, bringing the total policies for the new companies to about a half-million by the end of the year.

One of the biggest advantages to being a new company is not having what those in the industry call a legacy book. It refers to longtime policyholders, some of whom have become too expensive for the insurance company to keep. New companies start fresh, with a blank book of business.

"And these new companies are hungry for the business," Zutell said.

Any State Farm policies not picked up by other private insurers would be assumed by Citizens Property.

"I don't see a big exit out (State Farm's) doors," Citizens board chairman Bruce Douglas said Monday. Most of the company's policies are in the interior of the state, not along the coast, where it's harder to find insurance.

Douglas is more concerned over a separate State Farm decision last year to cut 50,000 coastal policies. Some of those homeowners are in the midst of being dropped.

"Some (homeowners) will go to admitted carriers and some to surplus lines," Douglas said. "And we'll probably take at least half.

"That's our territory, I guess."

Tom Zucco can be reached at or

(727) 893-8247.


Finding insurers

Looking for a new homeowners insurance policy? Try an insurance agent or a broker. Another way to shop is online. The state offers a free service called Shop and Compare Rates at Prospective buyers can also check a private service: The fee is $20.

New companies, Citizens ready to take State Farm's insurance load 02/25/08 [Last modified: Tuesday, February 26, 2008 12:27am]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Tampa is 15th-most popular city to move to with U-Haul


    TAMPA —Tampa is undoubtedly a destination point, at least according to U-Haul.

    Tampa is the No. 15 destination for people moving with U-Haul trucks. | Times file photo
  2. Florida's economy growing faster than other big states and far better than U.S. overall


    When it comes to economic growth, Florida's running alongside the leading states and well ahead of the United States as a whole.

  3. Westshore Marina District project takes shape with another acquisition

    Real Estate

    TAMPA — One of Tampa Bay's prime waterfront areas took another major step toward redevelopment Friday as WCI Communities bought 2.35 acres in Westshore Marina District.

    WCI Communities, Lennar's high-end subsidiary,has paid $2.5 million for 2.35 acres in the Westshore Marina District for 35 townhomes. WCI is under contract  to buy an additional 9.5 acres.
[BTI Partners]
  4. Posh Guy Harvey RV park to open in Tampa Bay with $250,000 cottages


    HOLIDAY — Love those Guy Harvey T-shirts with the soaring marlins? In the not too distant future, you might be able to kick back in your own Guy Harvey cottage in the first-ever Guy Harvey RV park.

    Renderings of the clubhouse and an RV cottage site of the planned Guy Harvey Outpost Club & Resort Tarpon Springs.
[Guy Harvey Outpost Collection]
  5. Port Tampa Bay secures $9 million grant to deepen Big Bend Channel


    Port Tampa Bay has secured a $9 million grant from the U.S. Army Corps of Engineers for the widening and deepening of the Big Bend Channel in southern Hillsborough County.