CrackInsurance

Officials with State Farm early this week again fell short in their efforts to win a rate increase in Florida. The insurer, the second-largest property insurer in Florida, had sought an average 47.1 percent rate increase in the state for homeowner coverage against hurricanes and other property losses, according to a story recently printed in Forbes.

This isn’t the first time that State Farm has sought the same increase. Kevin McCarty, Florida’s state insurance commissioner had previously denied the request, according to the story. State Farm then appealed, but an administrative law judge denied that request last month. The issue then went back to McCarty, who, not surprisingly, rejected the proposed increase again.

Once again, an insurance company displays incredibly bad timing. Asking for such a large rate increase — we’re talking nearly 50 percent here — during a recession takes some incredible courage. Or maybe it takes incredible arrogance, not sure which.

I’m sure that times aren’t great for State Farm, either. But State Farm’s customers in Florida are surely worried about their jobs or stressed about the declining values of their homes. A higher premium on their property insurance protection would be just one more hardship.

Later in the story, a spokesman for State Farm said that the company is studying its options in Florida. Because of its own weak financial condition, the agency said it will only provide 675,000 policies in the state. It currently has about 845,000 policies.

In ruling against the increase, an administrative law judge said that State Farm Florida did not show that its increase was not excessive or discriminatory.

The insurer and the state have had a sometimes rocky relationship in the past. In 2007, the state insurance commissioner and State Farm Florida agreed to reduce rates 9 percent. That followed on the heels of State Farm’s 52.8 percent rate increase one year earlier.

Here’s some free advice to State Farm and other insurers: We know you need to make money to survive. We know you need to sometimes raise rates. But if the country is in the middle of a recession, and if job losses are reaching record highs, you might want to tamper down those requests for higher rates just a bit.

Related posts:

1. State Farm Opposes Rate Increase for Citizens Property Insurance
2. Is State Farm Overstating Its Troubles In Florida?
3. State Farm Insurance Pulls Out of Florida
4. Rate Increase At Louisiana’s Insurer Of Last Resort
5. Florida Insurance Commissioner Suggests Withdrawal Plan For State Farm.