The point of insurance companies is to spread risk, not run from it, as State Farm has done recently with homeowner’s in Florida.

Jim Thompson, president of State Farm Florida expressed his apparent remorsefulness over the “day we hoped would never come,” he said. But many feel Thompson and his colleagues are merely thinking of themselves by pulling out of the state amid the company’s alleged falling revenues. Some residents feel if Sate Farm pulls their private property insurance, they should pull all lines. The St. Petersburg Times printed a reader’s scathing letter online that calls for support on a bill that will stop the “cherry-picking that allows companies to only pick low risk lines of insurance to sell in Florida.”

Though State Farm is expected to slowly cease property insurance operations over a two-year timeline, current State Farm policyholders may have a tough time finding affordable policies elsewhere in such a storm-ridden coastal state. They could wind up with state-run insurer Citizens Property Insurance – the somewhat infamous brainchild of Governor Charlie Crist. Citizens is no answer to the insurance mess Florida has found itself in however. The state faces more than $400 billion in potential exposure from storm and wind damage, though Citizen’s CFO Sharon Binnun recently reported that the fund had only $3.4 billion in net assets.

Is the State Farm pullout fair to Florida policyholders?

Emily Holbrook
Click here to comment