State Farm has had it with Florida property owners. After major hurricanes in 2004 and 2005, State Farm Florida, a subsidiary of the insurance giant, says it will stop offering property insurance to more than one million Floridians within two years. The company blames not only the hurricanes but the generous discounts the state offered to homeowners who shored up their homes against hurricane damage.
One story reports that Gov. Charlie Crist says no one will miss them because State Farm charges among the highest rates in the state. Yet about 470,000 people will have to scramble to find new insurance within a year, and with fewer choices and less competition, it’s very likely consumers will pay even more.
State Farm Florida president, Jim Thompson, says the insurance giant is losing about $20 million a month in Florida and will be insolvent by 2011 and unable to pay claims going forward.
Here is the catch – State Farm wants to continue to offer auto, life and health insurance, a much more lucrative branch of the business. But the state insurance commissioner might say – sell all or nothing in the state- posing the question of whether bad faith insurance is occurring. Also the legislature might put the brakes on the move, allowing insurers to drop a limited number of customers every year.
It was just last year that the American Association for Justice published, the Tricks of the Trade report on the insurance industry. Let’s not forget while State Farms claims it is going broke, the company paid its chairman an 82 percent raise in 2007 amounting to more than $5 million.
And what about saving for a rainy day? In a good year, most of us look to the future and tuck extra money away. The absence of any major catastrophes helped State Farm generate a record $5.32 billion profit in 2006.
And the industry enjoys average profits of $30 billion a year, largely by denying claims. Is there any wonder why most Floridians don’t feel too sorry for State Farm?
When an insurance company wrongfully denies a legitimate claim, despite the fact that you pay your premiums faithfully every year, this is known as “insurance bad faith.” If you have been denied payment on an insurance claim, a skilled bad faith insurance lawyer from Farah & Farah knows how to deal directly with the insurance company to maximize the payout of your claim. Call us at 1-800-533-3555 for a free consultation today.