Many homeowners in the state of Florida will be left high and dry without property insurance, thanks to State Farm. A news report released today states that thousands of Florida State Farm customers will not be having their policies renewed. The first wave of affected customers are set to receive notice of the policy cancellation on Monday, according to an unnamed State Farm spokesperson. These customers will be those who were set to renew their policies at the beginning of August, so at least they will have plenty of advance notice of the coming crisis in their insurance coverage.
State Farm is backing out of an estimated one hundred twenty-five thousand policies as part of an agreement it reached with the federal Office of Insurance Regulation in December. The decision gave State Farm permission to axe the policies in Florida, where frequent hurricanes in the years 2004-2006 left State Farm and many other insurers with too much liability to continue to be profitable in those areas. Almost a quarter million Floridians hold State Farm insurance. The company ceased writing new State Farm homeowners insurance policies in 2008, and has since been looking at ways to chop back at its customer base in the so-called Sunshine State.
According to the press release, State Farm will send out final notices throughout 2010 for policies not being renewed, with the last wave (for homeowners scheduled to renew in July 2011) going out in about one year’s time. Many of the affected policies belong to homeowners in coastal areas prone to flooding and damage from hurricanes and tropical storms.
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