After State Farm's Florida unit announced it wants to get out of the business of property insurance in the state, Gov. Charlie Crist said: good riddance.
The company, Florida's largest private insurer of homes and condos with 1.2 million policies, wants to keep only auto insurance, it said in a statement. Other State Farm units would still sell life, health and other financial services, it said in a statement.
Under State Farm's proposal, it would phase out of the property insurance business over two years, giving existing customers time to find new coverage. Crist isn't shedding any tears.
"They probably charge the highest rates in the state anyway,'' he said. "Floridians will be much better off without them."
When asked if State Farm was posturing, Crist said, "I don't know and I don't really care." Crist also said he'd support any effort to strengthen the Legislature's attempts in 2007 to prevent property insurers that drop homeowners' policies from writing more profitable lines in Florida, like auto insurance.
By contrast, Sen. Mike Fasano, R-New Port Richey, was adamant that government must get involved to stop State Farm from dropping policies, especially riskier ones in the Tampa Bay area, which could be forced on to Citizens insurance.
"We must stop this from happening. The Legislature has a duty to stop State Farm from dropping customers. That is unconscionable what they’re doing. There’s no way that we as a legislative body and Cabinet as a whole can accept this," said Fasano, who plans to push hard to pass a law that would prevent private property insurers from dropping more than 2 percent of their policyholders in a given year. "That would stop them dead in their tracks," Fasano said.
House Speaker Ray Sansom also signaled concern in a letter he sent to lawmakers, especially noting the impact on State Farm agents and employees. He said he planned to invite State Farm to next Tuesday's House insurance committee meeting to present the plan for dropping customers.
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-- Jennifer Liberto and Bea Garcia