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State Farm looking to increase Florida insurance by 14.9 percent

Posted On Fri, August 10, 2012

State Farm, the second largest private insurance provider in the state of Florida, is looking to increase homeowners insurance rates by 14.9 percent this fall, according to the Palm Beach Post.

In addition to general homeowners insurance, State Farm is prepared to increase the insurance premium prices for apartment renters by 49 percent, and by 27 percent for condominium owners.

State Farm is citing the extreme risk of keeping homeowners insurance policyholders in Florida, where hurricanes are a constant possibility. Due to the high risk of hurricane damage, the insurance provider has been steadily reducing its hurricane wind exposure coverage and threatening to pull out of the state entirely whenever the rate hikes are questioned.

Although the winds could change at any moment, Florida has not experienced serious hurricane damage since 2005. Moreover, according to members of the Florida Office of Insurance, State Farm has not written any new policies in years in an attempt to reduce risk.

The combination of these two facts has left State Farm in a bind with the Florida board of insurance regulation.  According to the Post, The board is holding that State Farm's increases must be justified, and unless the provider can state clear and justifiable reasoning behind the increase, it will be forced to make smaller adjustments or leave the state altogether.

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