If you're a homeowner still covered by State Farm, cross your fingers.
You should find out within the next few weeks if you've missed the purge by the state's biggest private property insurer.
State Farm is in the final stage of notifying 125,000 homeowners across Florida that they're being dropped, a process that began nearly a year ago and has pushed thousands into the state-run insurer of last resort, Citizens Property Insurance.
The limited purge was part of a deal that State Farm cut with Florida Insurance Commissioner Kevin McCarty in late 2009 when it backed off from total withdrawal from the Florida market. The Illinois-based insurer agreed to keep nearly 700,000 homeowners policies and, in return, was granted an average 15 percent rate hike.
"We're almost done," State Farm spokesman Michael Grimes said. "We've been mailing out nonrenewal letters for 11 months now, and have one more month to go."
Clearwater chiropractor Gregory Schweitzer was among the unlucky ones hit toward the end.
He received a nonrenewal notice for his Safety Harbor home dated Dec. 28. After more than 30 years as a State Farm home and auto customer with life insurance and annuities through the insurer to boot — and never a claim for storm damage — Schweitzer was incensed.
"I don't want anything to do with them," he said. "I'm getting a refund my on (remaining) auto coverage and cashing out my life insurance policy that has cash value and dropping everything with them."
Schweitzer said his agent told him he was among 7,500 Pinellas County policyholders dropped in the latest round targeting homes within 5 miles of the water. "This is just cherry-picking," he said, noting that his house has a 2-year-old roof with hurricane straps. "I live in a no-flood zone in Safety Harbor, and the closest water I have is my pool."
State Farm declined to release any county breakdowns, but Grimes confirmed that most of the dropped policies are close to the coast and places where State Farm has a high concentration of loss exposure.
Customers are being given at least six months' notice.
As of the end of 2010, about half of the targeted 125,000 policies had already been removed, with customers either being dropped by State Farm or leaving on their own.
In tandem with State Farm's shrinkage, Citizens Property Insurance has been swelling dramatically. As of Nov. 30, Citizens had nearly 1.3 million policies statewide, up more than 200,000 from a year ago and up 100,000 in just four months.
The bigger Citizens becomes, the more all Floridians are at risk of heavy payouts after a major hurricane. That's because under state law, all insured Floridians can be assessed to cover catastrophic damage claims with Citizens that the insurer cannot afford.
Florida insurance regulators a year ago were hopeful that a group of small, Florida-based insurers — not Citizens — would pick up most of the State Farm policies being shed.
Grimes said the company does not track how many dropped policies have flowed into Citizens. But Jeff Grady, president/chief executive of the Florida Association of Insurance Agents, insists "almost all of that State Farm business has wound up in Citizens."
"These (State Farm) agents are touting the benefits of Citizens and giving discounts on auto if you stay with that agent," he said. "They're selling Citizens hard, and that's wrong. That's completely wrong."
Grimes said agents are supposed to help dropped policyholders find replacement coverage, but he said he could not address whether agents routinely steer customers toward Citizens or seek other options.
State Farm is authorized to give multiline discounts to dropped customers placed with Citizens if the auto and home policies are served by the same agent. The company in early 2010 filed with Florida regulators for the right to offer that same multiline discount to policies placed with unaffiliated private insurers, but was denied, Grimes said.
Florida's looming insurance crisis goes beyond State Farm: Few private carriers are writing new policies, and agents say many companies are still trimming exposure, which pushes even more policies into Citizens.
"We're at a point of stagnation now. No one will write," Grady said, attributing the situation to rising sinkhole claims and uncertain market conditions. "I think everyone is just waiting to see what this new Legislature does."
Even with the cutback, State Farm will remain the largest private property insurer, ahead of Universal Property & Casualty.