Most of the 1.2 million home and condominium policies State Farm Florida wants to drop from its rolls in Florida are older and more vulnerable to hurricanes, according an online insurance buyers guide.
The average year of construction for State Farm-insured homes was 1981, with many built between 1950 and 1970, while 72.1 percent of the homes were built prior to stronger building codes of 1995, according to figures from Lake Worth, Fla.-based "Home Insurance Buyers Guide."
Among the State Farm insured homes, 72.9 percent do not even have hurricane shutters, the Buyers Guide reported.
Michael Letcher, president of the Buyers Guide, said in a statement that his operation collects real-time data directly from consumers who are using the Web site "as they respond to cancellations and overpriced, hard-to-find Florida home insurance."
The Web site–www.homeinsurancebuyers.org–offers a searchable database where homeowners can find, screen and contact Florida homeowners insurers still writing new business.
Chris Neal, a spokesman for State Farm Florida, said Mr. Letcher was basing his information only on customers who had contacted his site. Mr. Neal said he had no idea which of the company's customers had been on the site, and no way of verifying the information reported.
Another State Farm representative, Michal Connolly, said she could not tell whether the company even kept such data.
The Buyers Guide said customers who subscribed to its service had provided "a rare, inside look at what the Florida home insurance market will face as it attempts to absorb hundreds of thousands of policy cancellations."
The Guide said that despite the insurer's pullout announcement, long-time State Farm customers had remained loyal to the end, giving the company an average satisfaction rating of six on a scale of one-to-10.
The State Farm Florida customers' average policy expiration date is July 6, according to the Buyers Guide, which noted that because most have older home stock, it will dramatically increase the chances they will end up in the state-run insurer of last resort–Citizens Property Insurance Corp.–or be only temporarily accepted by a private company.
State Farm filed for a withdrawal from the state's property market last week when it could not get a 47.1 percent rate increase, projecting it will become insolvent in 2011–assuming no hurricane losses occur during the next two hurricane seasons.
The company then asked the state for permission to end renewals of all property policies within two years.
The withdrawal plan also indicates that merely $175 million in hurricane losses will accelerate insolvency to the second half of 2010, indicating that a more severe hurricane during the 2009 hurricane season could accelerate an even earlier insolvency.
The Florida Office of Insurance Regulation–which has 90 days to review the company's withdrawal plan and approve or deny it–has given the company a subpoena, answerable next Monday, for computerized data with names, addresses, policy types, policy limits and premium information for each of State Farm's Florida policyholders.
Mr. Letcher said State Farm insureds are beginning a "long, painful process."
"As the Florida home insurance crisis continues, we'll be there to help Floridians find, screen and contact the Florida home insurance companies looking to compete for their business," he said.
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