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Even insurers aren't immune from the effects of the downturn. A report by WFTV and the AP indicates that State Farm Florida has filed plans to "discontinue its Florida property insurance product lines," which would include "insurance coverage for homeowners, renters, condominium unit owners, personal liability, boats, personal articles, and business property and liability policies."
The reason? In mid-2008 State Farm's requested 47-percent Florida homeowners insurance rate increase was rejected by Florida's Office of Insurance Regulation, and State Farm Florida has been struggling since, even in the absence of any major storms in the hurricane-prone state. The WFTV story passed on the company's position:
"Faced with steeply declining resources to cover future claims and expenses, State Farm Florida has little choice," State Farm Florida President Jim Thompson said. "This is not an action we wanted to take, but one we must take given the realities of the Florida property insurance market. We regret the impact this will have on our customers, employees and agents in Florida."
"The state itself faces similar challenges as it deals with the fragile financial condition of government backed Citizens Property Insurance Corp.," Thompson said. "State Farm Florida is a private company and must have adequate capital to ensure financial stability. And it is our responsibility to our policyholders to provide a sound financial framework for the coverages we offer."
Although it might be up for debate as to whether the 47 percent increase should have been approved in light of the particularly difficult Florida real estate market, property owners (or those considering property ownership) across the nation should prepare themselves for the real possibility that, as insurance companies tighten their belts in the recession, owners could be faced with situations where: 1) their rates are being increased significantly; 2) they must find new coverage; or 3) the policies being offered in their area decrease their coverage.
Below are some links that are helpful when looking for property insurance, as well as in understanding the regulations covering the field.
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.