State Farm To Fla.: We're No Longer There

Florida's largest private homeowners insurer - State Farm Florida - is planning to stop selling property insurance in the state.

The Illinois-based insurer can't do anything before completing a regulatory review in 90 days and is then prohibited by law from discontinuing any policy before giving a six-month notice.

Spokesman Chris Neal said State Farm's 2.8 million auto customers in the state are not affected by the company's decision.

In a statement, State Farm said it has been unable to obtain regulatory approval from Florida officials on adequate rates for its property insurance lines.

When asked if the state had been too tough on State Farm, Ed Domansky of the Florida Office of Insurance Regulation said, "The obligation of the Office of Insurance Regulation is to protect Florida consumers and to ensure that the rates that insurance companies charge are not excessive, and at this point, so far, it's been Commissioner [Kevin] McCarty's opinion and that of an administrative law judge that State Farm did not make a proper case for the rates it was requesting."

Gary Landry of the Florida Insurance Council, which represents insurance companies, said it will be a very big challenge to find new coverage for homeowners. He said he fears many people will end up in the state-operated Citizens Property Insurance Corporation.

"I think it's going to be a very big challenge here in the state of Florida at a time when companies are struggling already to get an adequate rate for the risk they're undertaking. This adds to the instability that exists in the Florida market. This just underscores the big problem we have in Florida with how do we finance hurricanes."

Gov. Charlie Crist said that Floridians will be much better off without State Farm. "They probably charge the highest rates in the state anyway," he said.

When asked if he thought the insurance company was bluffing by making the announcement, Crist said, "I don't really know and I don't really care.

"My concern is that we have a good market for Floridians to get homeowners' insurance, and as I have been informed since Floridians' great legislature again reformed homeowners insurance in this state back in the '07 special session in January, about 30 new companies have come into the state."

He encouraged consumers to go to the state's Web site for consumers, shopandcomparerates.com, in order to find a competitive or cheaper rates for homeowners insurance.