State Farm and State of Florida May Reach Agreement
There is a glimmer of hope tonight that perhaps as many as half of the current customers of State Farm Insurance will be able to stay with the company. Negotiation continue between State Farm and the State.
State Farm and the State of Florida have been battling for more than a year after the company requested a 47 percent rate hike and angered Governor Charlie Crist. State Farm expressed their disappointment by saying it was dropping all 800,000 of its homeowners policies.
The sticking point is who would pick up those policies. Industry insiders say there are not enough private insurers to handle the avalanche.
Three people with knowledge of the negotiations say State Farm is being offered rate hikes in the neighborhood of 15 percent for two years running and an end to costly hurricane mitigation credits. In exchange the company would keep about half it's policies.
The insurance council says State Farm staying would be good news. However, some insiders believe State Farm capitulating to the state would make it hard for other companies to negotiate with the state in the future.
The state has consistently said customers will have at least six months notice before a State Farm policy is canceled.
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