State Farm Exits Florida

State Farm announced yesterday it will no longer write new insurance policies or re-new any of their existing insurance policies in Florida. This change affects nearly 1.2 million customers in Florida who carry the following policies: homeowners, renters, condominium unit owners, personal liability, boats, personal articles, and business property and liability. This change will not affect auto insurance, life insurance, health insurance or financial services customers in Florida.

This decision comes after State Farm filed a request with Florida's Office of Insurance Regulation a 47.1% rate increase to their insurance premiums. The filing was disapproved on January 12th by Insurance Commissioner Kevin McCarty and the OIR.

State Farm cited a "significantly weakened financial position" caused by its inability to obtain approval for rate increases. Jim Thompson, president, State Farm Florida, said the insurer was left without options in the state. "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," he said in a statement. Thompson also cited state-mandated discounts also contributed to their decrease in revenue.

Florida residents insurance options are now domestic private insurers (currently hold 39% of the market), out-of-state carries (currently hold 24% of the market) and state-run Citizens (currently holds 18% of the market). State Farm Florida currently holds 19% of Florida's market.

Is there an insurance agent or attorney out there that can explain why the state mandates what carriers charge for premiums? Perhaps my opinion is too simplictic, but if my carrier increased my premium 47%, I'd find a new one. I know its more difficult finding insurance coverage in Florida, but it seems to me the state just made it the problem even worse.