Florida Insurance Commissioner Kevin McCarty ordered State Farm Florida to issue credits or refunds totaling $120 million to current and former policyholders who did not apply for or who did not receive the Windstorm Loss Reduction Rating Plan discount for making their homes more resistant to wind damage. In addition, State Farm must pay a $1 million penalty to the Florida Insurance Regulatory Trust Fund.
"I am very pleased that State Farm policyholders will now be getting the appropriate monetary credit for the important wind mitigation devices they put on their homes," said McCarty. "Taking steps to fortify our homes against wind damage is very important. Everything Florida consumers can do to reduce storm damage helps to keep property insurance costs down."
In an interview with the Associated Press, State Farm Florida spokesman Justin Glover said that the company has been cooperative throughout the process by reporting problems to regulators and agreeing to provide policyholders with the refunds and credits. "We view it as working together," Glover said.
The order follows a July notice to State Farm of an investigation by the Florida Office of Insurance Regulation as to whether the company was properly implementing the mitigation discount program. As the result of an internal review, State Farm identified about 98,000 current or former policyholders to whom it will provide credits or refunds.
State Farm policyholders who are entitled to the refunds will receive a notice from the company. Refunds will be credited to the renewal premium for all renewing policyholders entitled to the refund. Otherwise, the company will issue a check. In addition, the refund must include seven percent interest on the amount due to each policyholder until paid.
