There is no better way to say it. The majority of the public is aching for an election so they can vent out their frustrations. The latest stirrings of State Farm Insurance offering a 47 percent increase to policy owners were like a swift kick to the underbelly of the voter.
Thank goodness I will not be included in that lot. I was cancelled last month by State Farm for being one mile inland from the water. I was informed only by calling a representative and only after inquiring about a separate matter. “Oh by the way, you will be getting a cancellation letter from State Farm in the next couple of weeks” he said.
I replied, "I thought you said if I bought all my insurance from you, including automobile, business insurance, commercial auto, rental home etc that I would be immune from any impending cancellation from last years mandate of 50,000 policies reduction in Florida. He said “I really thought so, but the State of Florida decided that it would be too restrictive and provided favorable treatment to certain customers, so State Farm went back to the drawing board and decided 75000 policies would have to be eliminated including yours”. He also said, “Don’t worry I’m in the same boat and was cancelled as well”. That certainly did not make me feel better but it appeared Citizens the insurance of last resort was where I was headed.
Last week I read an article that said if we wanted to clear this insurance problem up.. All we needed was to let private insurers charge what they wanted and let competition do the rest. It sounded good but I’m afraid all the insurers are on the good buddy list and have already gotten together to price us out of the state. Another option was to let the state take over the windstorm portion of our policies and private insurers would do the rest. That also sounded reasonable, but again I do not trust these good buddies from changing the rules and decide the other portion would need to be priced higher as well.
As much as I dislike it, the only truly reasonable solution, is to have all national insurers price their products actuarial on nationwide losses. In other words, get rid of all the smaller statewide companies that are spin-offs from corporate companies and base your prices from the parent companies actual national losses. Florida is not going to be large enough to take all the losses by itself and we need a way to spread all our nations’ losses equally.
In the meantime I have decided to go through all my policies from State Farm and now shop them through competition rather than pledging them to one company in the hopes of not getting cancelled. Fear is a terrible thing, but once you get over it, the mailbox seems to be less threatening than it once was.
June 26, 2008
State wind storm pool?
Some businessmen recommend a state wind storm fund. Some advantages of this would be spreading the risk over the entire state. Public insurance pools do have advantages but would we still have problems with extracting our savings from insurance companies. We certainly do not need another excuse for keeping rates high. What do you think? posted June 26, 2008
