The Florida Office of Insurance Regulation is reviewing a rate increase request by State Farm that could affect more than 33,000 renter's insurance policy holders. The company wants to raise rates on those policies by an average of 50-percent. Some policies could go higher.
State Farm is Florida’s third- largest property insurer with more than 460,000 policies. That’s even after years of scaling back the number of policies it writes and dropping customers. But it still continues to promote its services with its catchy jingle, “Like a good neighbor state farm is there."
And maybe they’ll still be there, but at a much higher cost for renters. More than 30-thousand policy holders could get a not-so friendly surprise if a planned rate hike for renters premiums goes through. The Florida Office of Insurance Regulation took up State Farm’s rate request Wednesday. The company is asking for 58 percent increase on commercial rental policies and almost 50 percent for residential renters. In some areas of the state, it could be much higher:
“In Monroe County, the average premium is currently $4,857. With a 196-percent increase it would be $14, 411?"
The Office’s Brian Lee and other state regulators grilled the company about the impact such increases could have. There are only a handful of such policies in Monroe County, which includes Key West that would see a $14,000 renter’s policy. But other counties could see rates double, or even triple.
“If you wanted to get out of Dade, Palmer, Palm Beach and Monroe you’re doing exactly the right thing. The question is, is there a commitment to the market. Do you intend to keep writing the rental dwelling book and does the company intend to write other homeowners?” Said The Offices General Counsel Belinda Miller.
But State Farm argues its only trying to make sure it can cover all the policies it has.
“For my purposes I would say that we’re in this book of business. We certainly have concern for the impact that this kind of change will have on our customers, but at the same time we owe an obligation to all our customers to make sure we’re financially strong and can pay the claims when the storms come or when the fires burn," Sara Frankowiak responded.
The company has steadily scaled down its policies in Florida while raising rates. And while state officials expressed skepticism about State Farm’s request, the company did offer one caveat for consumers: there will be some discounts, IF policy holders agree to drop their sinkhole coverage. But that may not sit well with policy holders in sinkhole prone areas like Orange and Pinellas Counties in Central Florida.
