State Farm Won't Write New Home Insurance Policies in Miss.
State Farm won't write any new lines of home and commercial insurance in Mississippi, following a the legal battle over damage claims from Hurricane Katrina in 2005.
As you may recall, the claims stemmed the controversy over decimated homes that were insured against wind, but not flood.
State Farm Senior VP, Brice Trippel, issued a statement this afternoon saying, "It is no longer prudent for us to take on additional risk in a legal and business environment that is becoming more unpredictable."
According to a Reuters report (made available by CNN Money here), State Farm currently insures more than 30 percent of Mississippi homeowners. The insurer will continue to serve current policyholders and write new auto business but will leave the possibility of nonrenewals open if the situation worsens.
The situation for State Farm has a lot to do with legal fees, of course. "Hurricanes can be insured against, but litigation can't," noted Robert Hartwig who is the head of the Insurance Information Institute. "Those costs are extremely high."
State Farm joins their major competitor, Allstate, along with Nationwide Financial Services and American International Group in cutting back on writing new policies in coastal areas.
Pretty crazy stuff. With the socioeconomic infrastructure seeming to crumble along the coast, it makes you wonder how much longer folks will be able to sustain livelihood down there.
Comments
Like your "average" neighbor, State Farm "ain't" there!
Insurance is a gamble anyway but it is very obvious, "Pay us now, we will screw you later!"
State Farm needs to leave the state of Mississippi completely! We was supposed to have gotten rid of all the carpetbaggers over 100 years ago anyhow.
Jim King
Posted by: Jim King | February 14, 2007 04:32 PM
You force someone to provide a service that they don't pay for - flood coverage on a standard homeowners policy - and what's the incentive to stay?
Posted by: Nate | February 14, 2007 08:37 PM
I am with Jim King. After Hurricane Andrew in Florida the same bull came up. Face it, insurance companies just dont want to insure anything that they may have to pay on. I say if they wont write new home owner policies, they cant write new car or life or other safer policies. They cant win on every policy they write. Let the folks in non hurricane states with State Farm help pay for Miss. It works like the power companies. Crews are pulled from non devastated places to help out the problem areas. When a natural diaster hits them, Miss. crews go there. The money is spread out over the nation so no one is caught with thier pants down. Its time the rich insurance companies make a little less profit and pay people what they deserve. If they had done it right the first time instead of trying to screw someone, they would have paid alot less than the lawsuit settlement. My .02.
Posted by: Steve H | February 14, 2007 10:32 PM
STATE FARM SHOULD BE ASKED TO LEAVE THE STATE OF MISSISSIPPI ENTIRELY !IF WE ARE NOT GOOD ENOUGH FOR THEM THEN THEY NEED TO BE LEGISLATED OUT OF OUR STATE.THEY CONTINUE TO HAVE RECORD PROFITS EVEN AFTER KATRINA BUT I GUESS THE GOOD PEOPLE OF MISSISSIPPI ARE JUST NOT WORTHY OF STATE FARM INS.CO. THEY SHOULD NOT BE ALLOWED TO MAINTAIN THEIR BANKING CREDENTIALS IN OUR STATE EITHER.THE STATE BANKING DEPT,OCC,AND FDIC NEED TO UNDERSTAND THE ECONOMIC IMPACT THIS WILL HAVE ON ALL BUSINESSES IN THE STATE OF MS.IT WILL CAUSE TOTAL ECONOMIC MELTDOWN IN THE STATE WHICH WILL IMPACT OUR ENTIRE BANKING NETWORK AND STAVE OFF OTHER COMPANIES FROM COMING TO OUR STATE.OUR GOVENOR AND LEGISLATORS SHOULD PASS LEGISLATION NOW FORBIDDING THEM TO ISSUE ANY NEW POLICIES IN OUR STATE.THEY SHOULD NOT HAVE THE PRIVELEGE OF MAKING ANY MONEY FROM OUR CITIZENS ESPECIALLY SINCE THE EXISTING HOMEOWNERS HAVE TO WORRY NOW ABOUT EVEN HAVING THEIR POLICIES RENEWED FROM NOW ON.GEORGE DALE NEEDS TO BE TERMINATED FOR DOING THE POOREST JOB IN THE USA OF MANAGING THE RIGHTS OF OUR CITIZENS.HE IS TOTALLY OUT FOR HIMSELF INSTEAD OF LOOKING OUT FOR THE CONSUMERS IN THE STATE. ALL CURRENT STATE FARM AGENTS IN THE STATE WILL BE SEVERELY IMPACTED BY THIS DECISION FROM THEIR NON-CARING MONEY HUNGRY COMPANY WHO HAS NO CONCERN FOR THE PEOPLE WHO "BRUNG THEM TO THE DANCE".THEY ALSO NEED TO KNOW THAT "WHAT GOES AROUND COMES AROUND."THEY MUST LOVE TO KICK PEOPLE WHEN THEY ARE DOWN BY PICKING ON US AND THE POOR FOLKS WHO ARE STILL REELING FROM KATRINA.YOU CAN BET THIS IS A VERY POOR MGMT.DECISION AND WILL ULTIMATELY HURT STATE FARM. THE PEOPLE OF MISSISSIPPI WILL SURVIVE-WE ALWAYS DO BY STICKING TOGETHER AND DOING WHATEVER IS NECESSARY TO HELP EACH OTHER AND NOT RELYING ON OTHERS TO HELP US.
Posted by: J | February 14, 2007 10:53 PM
What people need to understand is that the insurance policy is a contract. The customer signs the contract. The contract has conditions and exclusions. If one is not happy with the conditions, coverages, and exclusions, they shouldn't sign the contract. It's pretty simple to me.
Posted by: Ann | February 15, 2007 03:18 AM
Thanks so much for your comments, everyone.
As expected, this has definitely become a hot topic.
Keep the two cents coming!
Posted by: Megan Mahan | February 15, 2007 09:35 AM
I live on Long Island, Suffolk County, four miles from the Great South Bay. I just received a letter from Liberty Mutual, who I have had for 27 years and no cliams, saying that they are not renewing my homeowners policy because of the hurricanes down South. This is happening to many people in this area. The law states that insurance companies can do this. I think it is time to lobby Washington so everyone across the Country can be protected against these high powered money grabbing insurance companies. Any thoughts?
Posted by: josephine murphy | June 27, 2007 10:44 AM