Jim Thompson, the President of State Farm Florida, recently posted a message to their customers on its website, www.statefarm.com. Recently, State Farm Florida submitted a request to remove or change certain discounts or credits. This will result in an average premium increase of 28% applying to policies renewing on or after December 1, 2009. This change in rates has not affected State Farm’s plan to withdraw from the property insurance market in Florida. A copy of this letter follows:
A Message to Our Customers from State Farm Florida’s President
State Farm Florida recently submitted a filing to the Florida Office of Insurance Regulation (OIR) to adjust or eliminate some policy discounts.
On Aug. 6, 2009, the OIR approved this filing in part. This will affect several of our homeowners, renters, and condominium unit-owners discounts, including the Claim Record Rating, Utilities Rating, Building Code Effectiveness Grading System, Home Alert and Home/Auto discounts.
The resulting premium change will vary from customer to customer, but it will equate to an anticipated average statewide premium increase of 28 percent. This will apply to policies renewed on or after December 1, 2009, and policies issued on or after November 1, 2009.
The OIR’s approval of this filing does not change State Farm Florida’s plan to withdraw from the Florida property insurance market – regrettably, we must proceed with that plan.
We are making these adjustments to our discounts so that State Farm Florida may gain much needed revenue to help slow its financial deterioration and better ensure it can fulfill its obligations to its customers as it proceeds toward withdrawal. State Farm Florida’s net worth has fallen over $300 million since year end 2007.
As we move toward withdrawal, I want to reiterate that State Farm Florida customers do not need to take any action at this time. The Company’s withdrawal plan is still subject to approval by the OIR. Even after approval, our residential property policyholders will receive at least six months notice before their policy is affected.
State Farm will also continue to market other insurance products in Florida, such as auto and life insurance, as well as financial services products.
As always, customers who have questions or need assistance may contact their State Farm agent.
Jim Thompson
President
State Farm Florida
