State Farm drops plan to withdraw from Fla. property insurance market, obtains rate increase

By AP
Wednesday, December 16, 2009

State Farm drops plan to withdraw from Fla. market

TALLAHASSE, Fla. — State Farm Florida has dropped plans to withdraw from Florida’s property insurance market.

Florida Insurance Commissioner Kevin McCarty on Wednesday announced a settlement with the insurer that includes a 14.8 percent rate increase.

State Farm Florida, the state’s largest private homeowner insurer, will also be allowed to not renew 125,000 of its 810,000 policies.

The subsidiary of Illinois-based State Farm Insurance had announced it would withdraw from Florida after McCarty rejected a 47.1 percent rate hike. Company officials had said a large increase was needed to remain financially viable in the hurricane-prone state.

State Farm Florida President Jim Thompson said Wednesday’s settlement would allow the company to stabilize its financial condition.

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