State Farm is There

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About 7 years ago, I dropped State Farm like a ton of hot bricks. The company, after being with it for 4 decades, raised my homeowner's premium to the sky. They have been allowed to get away with ridiculous rate increases in our State. In 2009, it got a 28% rate increase. That was not good enough for them. Last year they got a 5.6% rate increase. Every year they come around crying "poor" and they are not alone. They always bring up the 1992 Hurricane Andrew. Now that we have been hurricane free for years and they are packing away bucko profits, they say we are due for a major storm and they want big premium hikes. Oh, they say we have a lot of sink holes in Florida too that are causing their costs to sky-rocket and their profits aren't big enough.

What they were allowed to do after Andrew was to carve out their Florida business into a separate company, insulating the parent company from losses in our State that is hurricane-prone. These offshoots are known as "pup companies and have been allowed here since 1992 after Hurricane Andrew. This was an emotional issue backed by insurance lobbyists that got their way. The State of Florida caved into the Insurance industry as it was threatening to leave the State unless they could rip us off. It is way past time to disallow "pups."

"Insurance companies are always out there wringing their hands, crying poor, and accusing everyone else for high insurance rates and, oh yeah, those '“frivolous lawsuits'," says John Hopkins. The truth is over 50 years ago the insurance industry was designated as a special class of corporation. This special class was caused by exempting them from the McCarran-Ferguson Act that prohibits monopolies, among other things.

The insurance company files a request for a rate increase. The Insurance office in Tallahassee does not “approve” or “disapprove” the method an insurer uses to ascertain their proposed rates. The Office reviews the request and makes a determination as to whether or not the actual proposed rates are excessive, inadequate or unfairly discriminatory. The Insurance Commissioner's office must accept a rate filing request if it complies with the law, and is adequately supported by actuarial justification. Where is the Insurance Commissioner when it comes to the consumer?

You can be sure that all these insurance companies are doing whatever is needed and are filing rate increase requests whenever possible. State Farm guarantees more than fast, efficient service. What it doesn't guarantee you by being a "good neighbor" is a lower premium--it's going to cost you--a lot.