Good Neighbor? State Farm Bills Hold Sticker Shock

MIAMI (CBS4) – I am a television news reporter, homeowner, and customer of State Farm Insurance.

If you looked up “slack-jawed” in the dictionary, you would see a picture of me when I opened the premium notice I got in the mail from State Farm a few days ago.

My home insurance bill for the coming year, totaling $1,579.92, represents a 36 percent increase over last year.

My State Farm policy excludes windstorm coverage. I pay Citizens Property Insurance about a billion dollars a year for windstorm, but that’s another story.

My State Farm policy, that covers me only for fire, theft and sundry other stuff, would have increased even more this year but I got a discount for never having a claim. If I had actually used my insurance coverage my premium this year would have increased 44 percent.

What’s going on here?

I called State Farm’s corporate office in Bloomington, IL and a spokesperson there referred me to a spokesperson in Tallahassee who referred me to Chris Neal, a spokesperson in Winter Haven.

Neal acknowledged that yes, there has not been a major hurricane to strike Florida in more than five years, but said the company has “experienced heavy claims” from casualties of other sorts. He singled out sinkholes as being particularly pesky.


I don’t know about you, but I haven’t seen an explosion of sinkholes in my neighborhood lately. Or houses burning down. Or people falling off their roofs and breaking their necks. Or burglars hauling valuables out front doors. But our State Farm premiums are exploding nonetheless.

Florida’s insurance commissioner, Kevin McCarty, said the average 18.8% premium increase that he approved for State Farm statewide reflects “both a rate need by the company as well as cost-drivers in the system.” The average increase is just that, as my bill demonstrates. In some places neighborhoods premiums have shot up 60 percent or more, indeed, have even doubled. Pity the folks in sinkhole country.

State Farm Insurance Companies in 2010 cleared $1.8 billion in pure profit. State Farm CEO, Ed Rust, Jr., was paid $10.2 million in 2010.

The insurance premium outlook for Florida homeowners promises to grow bleaker.

Governor Rick Scott late today signed a bill into law that critics say could cause premiums to double in the next few years and coverage to decline.

The legislature approved the controversial measure, Senate Bill 408, which permits insurance companies to pass a variety of expenses along to their customers without regulatory approval. Companies can pass on the cost of “reinsurance” premiums, even if they purchase the reinsurance from their own subsidiaries or parent companies. Supporters of the measure said it will shore up insurance companies and attract more competition to the Florida market.

The measure has fractured the Republican majority.

Mike Fasano, a Republican from New Port Richey, said the bill “virtually guarantees a 15 percent premium” hike annually for Florida policyholders, and has condemned the industry-friendly measure as “an onerous rate increase” for consumers.
Governor Scott signed the bill on the same day that an op-ed piece by Fasano, urging him to veto it, was published by CBS4’s news partner, The Miami Herald.
Scott will visit South Florida Tuesday night, attending a swearing-in ceremony for re-elected Sweetwater Mayor Manny Marono.

More from Gary Nelson
  • Dan

    We need a redistribution of wealth from the top to the bottom, not the bottom to the top. If the tea party is as American as they say they are they need to buck up and pay taxes. Under 400,000 should pay 45% and that’s generous. It’s greed that got us into this mess and these politics and big businesses will run our planet into the ground.

  • Leebo

    I was told by my insurance company I was being dropped, that I needed to seek coverage from another company, thier reason was my house is 25 years old and the roof has never been replaced. Talk about slack jaw! We bought our about two months before Wilma hit and took my roof with her! My insurance paid for most of the cost, my new roof is five years old, and I paid for the upgraded improvement to it. I told this story to a good friend of mine who said he too was being dropped by his insurance company, he inquired to his agent as to why he was being dropped, “we never had a claim”, the agent replied “exactly, satistics say you are due for a claim.
    That is some customer service, on both counts, by the way, these are two different insurance companies! And now Scott is giving these companies a pay raise! That one coporate head looking out for another! There is no reason for this type of action, other than GREED!

  • Scott

    I feel your pain.
    My bill went from $8300 to over $12,000.
    By law, StatevFarm must offer a policy to you in order to keep writing other insurance, i.e. automobile where they make big money. So how dp they cut out homeowners, make it unaffordable

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