Our views: Block the ripoff
Regulators should reject State Farm’s bid to skirt law, levy huge rate hikes
July 29, 2009
State Farm just doesn’t quit when it comes to being a lousy neighbor to policyholders.
After an appeals court last week backed the Office of Insurance Regulation’s December rejection of the insurer’s request for a 47 percent rake hike, State Farm now wants to hit consumers this way:
Reducing or eliminating discounts for homeowners who mitigate against potential storm damage such as by hardening garage doors or installing shutters. The giant insurer was one of the biggest backers of mitigation discounts as one way to ease the insurance crisis in the state after the bad storms of 2004-05.
State Farm also wants to gut longstanding discounts for multiple policies, installing burglar alarms or never having filed a claim.
State Sen. Mike Fasano, R-New Port Richey, rightly calls the move an outrageous attempt to “go around the law” that could cause premiums to skyrocket 40 to 44 percent, including for some 34,000 policyholders in Brevard County.
Keep in mind State Farm is a lucrative operation, pocketing $5.5 billion in profits last year.
And that, despite being granted a 52 percent premium rate increase in 2006, it’s threatening to leave Florida, dumping 1.2 million policies statewide if regulators don’t allow more huge and unwarranted hikes.
Insurance Commissioner Kevin McCarty should make sure this latest shady tactic to rip off consumers is rejected too.
For its part, State Farm should drop plans to abandon faithful clients and start playing by the rules. That means submitting reasonable rate increase requests based on independently verifiable risk models, not rigged numbers.