Denied Rate Hike, State Farm to Axe Fla. Home Insurance

Company holds 1.2M policies in state hit hard, and often, by nature
By Harry Kimball,  Newser Staff
Posted Jan 27, 2009 1:34 PM CST
An aerial view of a home destroyed by wildfires in Palm Bay, Fla.   (AP Photo)
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(Newser) – Citing a “weakened financial position,” State Farm’s Florida operation is planning to completely exit the home insurance business there within 2 years, the Miami Herald reports. Such a move would need regulatory approval, and require a 180-day heads-up to affected homeowners. The move comes after the insurer, Florida’s largest with 1.2 million properties, could not obtain approval to raise rates drastically.

State Farm had petitioned for a rate increase of 47.1%, which was denied by the state insurance commissioner. “Faced with steeply declining resources to cover future claims and expenses, State Farm Florida has little choice,” the company’s Florida chief said.