AAA insurer sells combined home, auto policies in Florida
Mar 4, 2009
South Florida Sun Sentinel–March 2, 2009
By Julie Patel
Some State Farm customers who are angry about the company’s recent announcement that it is leaving Florida’s property insurance market have threatened to drop automobile policies they have with the insurer in retaliation.
State Farm wants to keep its 2.8 million automobile insurance policies in Florida.
“I have been a homeowner, flood and auto policyholder with State Farm for over 30 years,” North Lauderdale resident Mary Hames-McBride wrote in an email. “The provider that offers all three coverages will get all of my insurance business.”
There’s a new insurer in Florida that’s selling just that kind of policy: The Auto Club Insurance Co. of Florida, an American Automobile Association affiliate, started offering combined home and auto policies in Florida in 2007 and expanded to South Florida late last year. It has 2,000 policies statewide and wants to grow to 35,000 by 2011.
AAA is offering the combined policy only in Florida so far. That arguably makes sense: Homes in hurricane-prone Florida are treated like hot potatoes by major insurers and homeowners like Hames-McBride seem to want to reward companies offering property insurance.
The phenomenon is a market-driven version of state programs that give loans and other perks to insurers that take a certain number of homeowner policies. In the same vain, there’s a Florida law (that has been tough to enforce) that punishes insurers that don’t want to sell homeowners insurance in Florida by not allowing them to sell automobile insurance.
Auto Club Chief Underwriting Officer Jim Santo said the company developed the combined policy for convenience: “You got your two biggest assets, you automobile and your home, covered in one policy.”