Claiming financial weakness, the Florida unit of State Farm has stated it wants to end its property insurance business in the Sunshine State.
State Farm, which is the largest private insurer of condos and homes in Florida, with a total of 1.2 million policies, released a statement in which it said it wanted to keep only auto insurance active in Florida, though some units would continue to sell other insurance products, including life and health insurance.
According to a proposal made by the insurance company, property insurance in Florida would be phased out over a period of two years giving existing customers time to find new coverage.
State Farm’s statement, which cited a “substantially weakened financial position, directly related to its inability to obtain regulatory approval of what it believes to be adequate property insurance rates,” came on the heels of the state denying a request for a 47.1 percent rate increase.
According to the insurer’s risk analysis, and other projections, a 67 percent increase was actually supported.
In the statement that was released, Jim Thompson, president of State Farm Florida, said, “Faced with steeply declining resources to cover future claims and expenses, State Farm Florida has little choice. 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.”