State Farm shifts some of its Florida auto policies

Feb 5, 2009

Some State Farm auto insurance policies will be shifted to the parent company as part of its plan to cease writing homeowners coverage in Florida.

Miami Herald--February 5, 2009

As part of State Farm Florida’s plan to stop writing property casualty insurance in the state, the company must move about 161,000 auto insurance policies from an affiliated company that sells homeowners coverage nationwide but not in Florida.

The shift is State Farm’s attempt to comply with a state law that prohibits an insurance company or an affiliate from selling auto insurance in Florida if doesn’t offer homeowners coverage here as well.


State Farm Fire & Casualty, a national subsidiary of State Farm Mutual, sells auto insurance nationwide and has about 161,000 auto policies in Florida.

It also offers homeowners coverage, except in a few coastal states including Florida.

Drivers covered by State Farm Fire will be offered policies by State Farm Mutual Insurance, the parent company for both State Farm Fire & Casualty and State Farm Florida.

State Farm Mutual doesn’t sell homeowners coverage in any state.


The plan submitted late last week to the Office of Insurance Regulation said State Farm Fire policyholders will be offered the same rates and coverage that they now have.

Currently, State Farm Mutual auto policies cover the drivers with the best driving records.

Drivers with a few blemishes on their records, such as several tickets, have policies written by State Farm Fire.

State Farm Fire will cease writing all private passenger and commercial auto coverage.

Ed Domansky, an OIR spokesman, said the agency is reviewing State Farm’s auto insurance plan. But the courts might have to step in and decide whether State Farm’s proposal complies with state law.

State Farm Mutual must file rates for the policies it will be picking up from State Farm Fire.

State Farm Fire auto policyholders will be given 45 days notice that their polices will be shifted to the mutual company.

Timing for ending the auto coverage will depend on when State Farm Mutual’s rates are approved or when its sister company, State Farm Florida, finally unwinds its homeowners business.

The company has said it could take more than two years.


Chris Neal, a State Farm spokesman, said the company believes it won’t be in violation of the state law prohibiting it from selling auto insurance until the last homeowners policy is not renewed.