Comment Sparse in Florida on 80% State Farm Insurance Hike

Lynn Martin took a day off work and drove all the way from Punta Gorda to Lake Buena Vista, Fla. to talk about homeowner’s insurance.
In just under a decade, the 51-year-old has seen her State Farm premiums rise 300 percent to $1,600 this year, and that’s not even including the 80 percent average rate hikes the company just requested.

“My income has not increased 300 percent, and please don’t tell me to sell out and move out of state,” Martin said at a public hearing on the request. “We really don’t know how to go live somewhere else.”

Wearing a T-shirt that said “I survived Hurricane Charley,” Martin was one of just five people who spoke Monday at two hearings to give feedback on the request from Florida’s largest home insurer. State Farm is also seeking an approximately 95 percent increase on mobile home policies, nearly doubling rates for about 30,000 owners.

Brian Branton, a 40-year-old purchasing agent who made the trek from Palmetto on the Gulf Coast, said he was surprised and disappointed the meetings weren’t better attended. Only a handful of the roughly 300 seats set up in a hotel ballroom near Walt Disney World for the meeting were taken up, most of them by State Farm personnel.

Branton said the increases would cost him the equivalent of a 13th mortgage payment.

“That’s my driving money, that’s my spending money, that’s my hit,” he said. “That would take a nice chunk out of my day-to-day bottom line. I’d like the state to review this.”

The rate increase figures are only averages, and will affect people in coastal areas more heavily. In landlocked Orange and Seminole counties, for example, it is closer to 13 percent, the company said.
State Farm, which covers about one in five Florida homes, says the increase is largely due to higher costs of reinsurance, coverage bought in case insurers face enormous claims. A smaller portion of the request covers the higher cost of doing business in Florida after two devastating storm seasons and dire predictions of future catastrophe, the company says.

Other insurers with the same concerns have been requesting large rate increases or refusing to renew Florida policies.

If approved by state regulators, the State Farm increase would be effective Aug. 15.

“We want to stay in Florida, we want to write insurance and we want to keep servicing those customers that we currently have with us,” said Debra Johannson, State Farm fire operations manager. “But the only way we can do that is if we can get a rate increase so we can actually pay our reinsurance bills and have the ability to pay those losses as we incur future catastrophic events.”

Terry Bales, 63, made the hour-and-a-half drive from Palm Bay for the second meeting, which lasted only about half an hour because just two people commented for the record.

He expressed concern that Florida insurers continued dropping policyholders, further reducing the pool of people to spread risk over.
“If you keep reducing the number of people that are insured certainly the costs are going to go up. This rate increase doesn’t surprise me,” he said.

In addition to the homeowner increases, State Farm is canceling about 1,500 policies held by condominium complexes, which cover roofs and other common parts of buildings but not individual units. Further, the company is dropping wind coverage for about 39,000 customers in certain coastal parts of the state, but will continue to cover other damages.

Robert Wunderlich, a 63-year-old retired field engineer who lives in Winter Park, said he’s paid State Farm about $200,000 over 30 years of home ownership and never made a claim. He said he wants the company to carefully consider how much it changes his bill.

“I’m asking State Farm to hold the line,” he said. “If indeed increases continue to happen, I will … have to reconsider what coverage I maintain, but I will also have to reconsider what company I maintain that coverage with.”

Topics Florida Homeowners