Make us your home page

What you need to know about State Farm's pullout

I'm a State Farm Florida property insurance customer. What do I do now?

It pays to start shopping around for a new policy. The good news is that more than a dozen insurance companies have entered the market since the hurricane induced meltdown of 2004-06.

Citizens Property Insurance Corp., the state's insurer of last resort, has been farming out hundreds of thousands of its policies to startup companies. Firms in that group include American Integrity Insurance, United Property & Casualty and Federated National Insurance. Many have been dubbed poor financial risks, though none has been tested thanks to our mostly storm-free hurricane seasons since 2006.

Companies with stronger ratings have been branching out in Florida, too. One is St. Petersburg's ASI, which recently insured only newer homes, but now is taking on older homes.

You'll generally pay more if your house is showing its age or located in an area considered a high sinkhole risk. Some companies, including American Integrity, won't insure a house more than 75 years old. Most won't cover a structure with a roof older than 15 years.

On the plus side, home replacement costs are generally lower than they were during the housing boom. That's helped constrain premiums.

It can't hurt to check an insurer's financial rating available from such companies as the or Fitch Ratings. You can ask your agent to provide the rating. Why place your home with a "D" company when an "A" is available?

If you struggle to find coverage, contact the Florida Market Assistance Plan at or by calling toll-free 1-800-524-9023. FMAP helps consumers find coverage. If you still can't secure a policy, an agent will place you with Citizens Property Insurance.

How do I know if I'm affected?

State Farm Florida is required to give you warning that your policy won't be renewed. The pullout affects about 1.2 million policies for home and condo owners, renters and customers with coverage for personal liability, boats, personal articles and business property and liability. State Farm asks customers with questions to call their agents or toll-free 1-800-381-3963. They can also visit for updates on the withdrawal process.

When will I lose my coverage?

No one will be affected immediately. First the state has 90 days to review and approve the pullout plan. Then, State Farm has to provide 180 days notice to customers before it drops any policies. Based on a withdrawal plan drafted by State Farm, it will be a two-year process. In the first year, about 470,000 property insurance policies, representing the riskiest part of State Farm's portfolio, will be dropped. Each of those policies will be dropped on its anniversary date within that first year. All boat-owner policies are being dropped during the first year. The last State Farm Florida policy would lapse by the end of 2011, at which point the company would surrender its license to write property insurance in Florida.

Why is State Farm Florida pulling out of the property insurance business now?

State Farm Florida says its net worth has dropped nearly 25 percent since 2006 because of rising costs and state mandates. The company said it has paid out $1.21 in claims for every dollar of premiums it has collected since 2000. Even without a hurricane hitting Florida, it projects it would be insolvent by 2011. After the state rejected its bid to hike rates an average of 47 percent, that was the last straw, State Farm said.

Why is State Farm Florida still allowed to write auto polices? If it is dropping property insurance, I thought that was against the law.

Gov. Charlie Crist campaigned to crack down on companies that "cherry-pick" or sell homeowners insurance in other states but only sell more profitable lines of coverage in Florida. However, the Legislature's effort to crack down on the practice was watered down and applies to few, if any, companies. In State Farm's case, it's transferring all its auto policies to the parent company, State Farm Mutual Automobile Insurance Company, which doesn't sell homeowners insurance in any state, both State Farm and the Office of Insurance Regulation confirmed.

Staff writers Jeff Harrington, James Thorner and Jennifer Liberto contributed to this report, which includes information from State Farm Florida and Citizens Property Insurance Corp.

What you need to know about State Farm's pullout 01/28/09 [Last modified: Friday, January 30, 2009 10:27am]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Pinellas construction licensing board needs to be fixed. But how?

    Local Government

    LARGO –– Everyone agrees that the Pinellas County Construction Licensing Board needs to be reformed. But no one agrees on how to do it.

    Rodney Fischer, former executive director of the Pinellas County Construction Licensing Board Rodney, at a February meeting. His management of the agency was criticized by an inspector general's report. [SCOTT KEELER   |   Times]

  2. New owners take over downtown St. Petersburg's Hofbräuhaus


    ST. PETERSBURG — The downtown German beer-hall Hofbräuhaus St. Petersburg has been bought by a partnership led by former Checkers Drive-In Restaurants president Keith Sirois.

    The Hofbrauhaus, St. Petersburg, located in the former historic Tramor Cafeteria, St. Petersburg, is under new ownership.

  3. Boho Hunter will target fashions in Hyde Park


    Boho Hunter, a boutique based in Miami's Wynwood District, will expand into Tampa with its very first franchise.

    Palma Canaria bags will be among the featured items at Boho Hunter when it opens in October. Photo courtesy of Boho Hunter.
  4. Gallery now bringing useful art to Hyde Park customers


    HYDE PARK — In 1998, Mike and Sue Shapiro opened a gallery in St. Petersburg along Central Ave., with a majority of the space dedicated to Sue's clay studio.

     As Sue Shapiro continued to work on her pottery in St. Petersburg, her retail space grew and her studio shrunk. Now Shapiro's is bringing wares like these to Hyde Park Village. Photo courtesy of Shapiro's.
  5. Appointments at Raymond James Bank and Saint Leo University highlight this week's Tampa Bay business Movers & Shakers



    Raymond James Bank has hired Grace Jackson to serve as executive vice president and chief operating officer. Jackson will oversee all of Raymond James Bank's operational business elements, risk management and strategic planning functions. Kackson joins Raymond James Bank after senior …

    Raymond James Bank has hired Grace Jackson to serve as executive vice president and chief operating officer. [Company handout]