State Farm to Drop Coastal Policies, Raise Rates in Mississippi

The State Farm Fire and Casualty Co. filed intentions with the Mississippi Insurance Department to non-renew all Mississippi homeowners policies for customers living within 1,000 feet of the Gulf of Mexico.

State Farm spokesman Fraser Engerman said the action involves 892 policyholders or less than 0.5 percent of the insurer’s total Mississippi customer base. The non-renewals will not take effect until Nov. 1 – post hurricane season 2008.

For customers living more than 1,000 feet from the water but less than 2,500 feet, State Farm will renew policies with a wind or hail exclusion, Engerman said. The wind exclusion will affect approximately 5,000 policyholders, he added.

The insurer also filed for a statewide average rate increase of 13.6 percent for Mississippi homeowner policyholders.

Insurance Commissioner Mike Chaney said he has not yet approved the rate increase. He said there is a possibility that State Farm would non-renew 22,000 additional Mississippi homeowners’ policies if their rate increase is denied.

Chaney said Allstate Insurance expressed interest in picking up State Farm’s non-renewals. He said seven of the 892 policyholders being non-renewed are State Farm agents. Chaney’s office asked State Farm for a list of the customers whose polices will be non-renewed.

Since taking office in January, Chaney said he has approved 25 new insurance companies into the state’s market.

Topics Mississippi