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Judge Recommends Denial of State Farm Rate Increase
Administrative Law Judge Daniel Manry of the Division of Administrative Hearings (DOAH) has recommended State Farm's bid for a 47 percent hike in property insurance rates be denied. This has speculation growing that Florida's biggest private insurer could drop a significant number of policies statewide. State Farm's original request was turned down by Florida Insurance Commissioner Kevin McCarty. In an appeal, the insurer said it could have justified a 67 percent increase because costs have spiked. State Farm said it is collecting less in premiums because of big discounts given to customers who strengthen their homes against hurricanes. Judge Manry rejected those arguments, writing that, "State Farm Florida did not show by a preponderance of the evidence that either the indicated rate or requested rate in the rate filing is not excessive, inadequate, or unfairly discriminatory." State Farm officials have repeatedly warned of potentially dire consequences if they were turned down — that they may have to shed a large number of policies or even pull out of Florida. With about 1-million property insurance policies in Florida, State Farm of Bloomington, Ill., is by far the state's biggest private insurer, second only to state-run insurer of last resort Citizens Property Insurance. About the Florida Office of Insurance RegulationThe Florida Office of Insurance Regulation (Office) has primary responsibility for regulation, compliance and enforcement of statutes related to the business of insurance and the monitoring of industry markets. The Office protects Florida consumers through regulatory oversight of: insurance company solvency, policy forms and rates, market conduct performance and new company entrants to the Florida market. For more information about the Office, please visit www.floir.com. If you would like to review and compare homeowners insurance rates in Florida, go to www.shopandcomparerates.com.
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