So here is my 2nd post.
Today I want to discuss about the article found on Jan.28,2009 from Wall Street Journal.
As the title indicates its pretty clear, State Farm (The nation's largest insurer of autos and home) decided it is pulling out of the Florida homeowners insurance market.
Reason: The risk Florida faces against Hurricanes are enourmous.
In order to insure these risks State Farm must charge higher premiums to insureds.
However, 47% raise in their rate has made the Florida regulators to reject this request.
Now, that Florida has uninsured homeowners left in state, it is interesting to see who is gonna take over the market.
However, one thing we can expect is Florida's homeowners will suffer the somewhat high rate regardless of who is going to be the insurance provider.
Who will be willing to take on the risk which State Farm has withdrawn from?
Would it be someone that focuses on niche market or someone that writes general coverages?
State Farm is saying that it takes about 2 years to drop all the policies.
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