State Farm Insurance implemented an additional 2 percent rate reduction for Florida policyholders, according to the Florida Office of Insurance Regulation.
The rate reduction comes on the heels of a 7 percent State Farm rate decrease enacted earlier this year. The additional reduction will result in approximately $23 million in savings to their policyholders, the OIR said.
In addition, State Farm has agreed to change its method for non-renewing policies in coastal zones in Florida. As was announced in July, the company still plans to non-renew up to 50,000 policies of policyholders with properties along the coast; however, non-renewals will not be based upon tying to other insurance products with the company.
State Farm also has agreed to refund excess surcharges. The excess amount, $23 million, plus 5 percent simple interest, will be refunded to State Farm policyholders beginning in six months.
“State Farm has reduced its rates and has agreed to stop business practices that the Office found objectionable,” said Insurance Commissioner Kevin McCarty. “Our governor and our legislature required this by law, so I am happy to see that State Farm has reached this agreement for the benefit of its policyholders.”
As a result of a comprehensive investigation by the Office of the Attorney General, with the assistance of the OIR, State Farm will begin a program of automatically notifying its auto policyholders that are eligible to transfer to the less-costly State Farm Mutual Company.
Further, State Farm will pay the OIR $500,000, as reimbursement for attorneys’ fees and costs associated with the matters settled in the agreement. State Farm will also pay $1 million to the OAG, payable to the Department of Legal Affairs Trust Fund, as reimbursement for attorneys’ fees and costs associated with the agreement and to cover the OAG’s costs of administering the fund and for use in continuing enforcement efforts.
Source: Florida Office of Insurance Regulation.
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