GTPILAW, Obviously you believe that this statement means they should continue on in Florida as a non-profit. I live in Florida, am insured by SF, and undoubtably will be searching for new coverage. I only have a single question. When did it become such a horrible offense to society that a buisness be “for profit”. I have had nothing but the best of service from SF. But now, because this country has forgotten that everything we want is not necessarily a right, SF is expected to provide for Floridians until the company completely collapses. A simple spelling lesson for America: PROFIT is not a 4-letter word.
What happened to the Magic Wand they have in Florida? Wave it and all is well and profitable, insure a million dollar property for $100 a year. Sure you can make a profit doing that!
Let State Farm raise their rates. If they are too high they lose good business to the competitive domestics and they are left with the cr*p that causes loss.
If they are not too high, the business stays. What in the world is so hard to understand about how this? And I don’t have a reason to particularly like State Farm!
The business model can be reduced to a simple equation: Profit = earned premium + investment income – incurred loss – underwriting expenses.
Insurers make money in two ways: (1) through underwriting, the process by which insurers select the risks to insure and decide how much in premiums to charge for accepting those risks and (2) by investing the premiums they collect from insured parties.
The most complicated aspect of the insurance business is the underwriting of policies. Using a wide assortment of data, insurers predict the likelihood that a claim will be made against their policies and price products accordingly. To this end, insurers use actuarial science to quantify the risks they are willing to assume and the premium they will charge to assume them. Data is analyzed to fairly accurately project the rate of future claims based on a given risk. Actuarial science uses statistics and probability to analyze the risks associated with the range of perils covered, and these scientific principles are used to determine an insurer’s overall exposure. Upon termination of a given policy, the amount of premium collected and the investment gains thereon minus the amount paid out in claims is the insurer’s underwriting profit on that policy. Of course, from the insurer’s perspective, some policies are winners (i.e., the insurer pays out less in claims and expenses than it receives in premiums and investment income) and some are losers (i.e., the insurer pays out more in claims and expenses than it receives in premiums and investment income).
An insurer’s underwriting performance is measured in its combined ratio. The loss ratio (incurred losses and loss-adjustment expenses divided by net earned premium) is added to the expense ratio (underwriting expenses divided by net premium written) to determine the company’s combined ratio. The combined ratio is a reflection of the company’s overall underwriting profitability. A combined ratio of less than 100 percent indicates underwriting profitability, while anything over 100 indicates an underwriting loss.
Insurance companies also earn investment profits on “float”. “Float” or available reserve is the amount of money, at hand at any given moment, that an insurer has collected in insurance premiums but has not been paid out in claims. Insurers start investing insurance premiums as soon as they are collected and continue to earn interest on them until claims are paid out.
I’ve been off the boards for a while, but it seems clear that GTPILAW is following one of two career paths, law or politics. This is obvious because his post is clearly factually correct, most likely copied and pasted from elsewhere, and while entirely accurate, makes absolutely no point whatsoever. The ALL CAPS at the end makes me think that, between law and politics, he studied the former.
State Farms agents have nothing to cry over. Greed got to the best of them. They reinsured the homeowners with their auto insurance company. The got sued for not providing the proper credits, haven’t paid a divident in years. Haven’t hired new agents in a year. The agency force are dying dinosaurs.
Clearly GTPILAW, you have a much better understanding of the insurance industry than I do. That I will gladly concede. However, while investment is a large source of revenue for insurance companies, the fact still remains that when the losses from claims cut into those revenues, SF or any other company has the right as a for profit company to pick up their toys and go home. Obviously goodwill is a consideration when a company makes a decision with the ramifications that this one will have. But if the bottom line is not there, goodwill only goes so far. The whole thing comes down to profit. The same profit that employs or otherwise supports a whole lot of people. Free market forces will correct the ills in Florida (if the gubment will stay the @#%^ out of it). The end result will be substantially higher homeowners insurance rates. I don’t want to pay it, but that is the cost of living where the wind blows. Same should apply to California, Louisianna, etc. If my property is the risky one, I should be paying the high premiums. Don’t tell my wife I said that.
ONE THING STATE FARM FORGETS TO TELL ALL OF YOU IS THAT IN FLORIDA WHEN THE WIND HIT HOMES PEOPLE WERE COVERED, BUT STATE FARM JUST DECIDED IT WAS ALL WATER SO NO CLAIMS WERE PAID. THEN THEY CRIED TO THE GOVERNMENT TO COVER ALL FLOODS AND HAVE PASSED LAWS SO THE GOVERNMENT WILL COVER WIND DAMAGE AS WELL. I SAY IF YOU TAKE ALL THE BILLONS IN PREMIUM AND THEN CONVENIENTLY DO NOT COVER ANYTHING—WHAT A RACKET. STATE FARM MUST STOP HIDING THE TRUTH BY SEALING RECORDS IN OUR COURT ROOMS. THIS BIG GIANT HAS SCREWED THE AMERICAN PEOPLE FOR TO DARN LONG. WE SAY PLEASE LEAVE ALL 50 STATES MY GOOD NEIGHBOR, AND TAKE YOUR BS COMMERCIAL OFF THE AIR. I THINK ITS HIGH TIME THE ETHICS BOARD OPENED UP THEIR EYES AND TAKE A CLOSE LOOK AT STATE FARM AND ANY INDUSTRY THAT CAN RAPE PEOPLE AT THE LOWEST TIMES OF THERE LIFE AND THE LITTLE JUNIOR OF A CEO ED RUST WHO HAS TAKEN A GREAT COMPANY THAT HIS GREAT GRANDFATHER STARTED AND TURNED IT INTO HIS LITTLE BANK. WAKE UP PEOPLE AND LOOK AT THE HISTORY. I DID NOT MAKE IT UP. I WISH THAT I DID NOT KNOW THE TRUTH, BUT I DO SO I AM TRYING TO TELL YOU. I HOPE WITH ALL HOPE AND THE LOVE OF THIS GREAT AMERICA SOMEONE ELSE MAY CARE.
: @ ELSE MAY CARE.
Posted On: January 27, 2009, 9:04 pm CST
Posted By: profits over its own policyhol
Comment:
Study reveals worst insurers
By ANITA LEE
— Allstate is the nation’s worst insurance company for consumers, an association of lawyers who sue big business concludes in a report released Wednesday.
“The rankings show a distinct pattern of insurance industry greed amongst 10 companies that refuse to pay just claims, employ hardball tactics against policyholders, reward executives with extravagant salaries, and raise premiums while hoarding excessive profits,” the American Association for Justice concludes.
Researchers spent six months compiling information from court documents, SEC and FBI records, state insurance department investigations and complaints, nationwide news accounts, and testimony of former insurance agents and adjusters.
“We’re not surprised we’re being targeted by the trial and personal injury lawyers because Allstate has been at the forefront of the fight against insurance fraud and the effort to resist unreasonable demands made by lawyers,” Allstate spokesman Michael Siemienas said Wednesday.
The AAJ says the U.S. insurance industry collects more than $1 trillion in premiums annually, and has $3.8 trillion in assets, surpassing the Gross Domestic Products of all countries but the United States and Japan.
Robert Hartwig of the industry-sponsored Insurance Information Institute said consumers should consider the source: litigious attorneys who help drive up insurance costs. He also said the industry has paid out nearly $300 billion to tens of millions of policyholders across the country over the past 20 years.
The top 5 offenders on the list:
1. ALLSTATE – CEO, Thomas Wilson; 2007 compensation, $10.7 million; 2007 profits, $4.6 billion; assets: $156.4 billion. “According to investigations and documents Allstate was forced to make public, the company systematically placed profits over its own policyholders… The amount Allstate paid in claims dropped from 79 percent of its premium income in 1996 to just 58 percent 10 years later. In auto claims, payouts dropped from 63 percent to just 47 percent.
2. UNUM – CEO, Thomas Watjen; 2007 compensation, $7.3 million; 2007 profits, $679 million; assets, $52.4 billion. “Unum, one of the nation’s leading disability insurers, has long had a reputation for unfairly denying and delaying claims..”
3. AIG – CEO, Robert Willumstad; 2007 compensation for former CEO, 14.3 million; 2007 profits: $6.2 billion; assets, $1.06 trillion; “AIG executives have also come under fire for opportunistically seeking price increases during catastrophes. Now the company has been labeled ‘the new Enron’ because of charges of multibillion-dollar corporate fraud.”
4. STATE FARM – CEO: Edward B. Rust Jr.; 2007 compensation, $11.7 million; 2007 profits: $5.5 billion; assets, $181.4 billion. “In many cases, the company has gone to extreme lengths to avoid paying claims, including forging signatures on earthquake waivers after the deadly Northridge earthquake, and altering engineering reports regarding damage after Hurricane Katrina.”
5. CONSECO – CEO, C. James Prieur; 2007 compensation: $2.6 million; 2007 profits: $179.9 million; assets: $33.5 billion. “Conseco sells long-term-care policies, typically to the elderly. Unfortunately, Conseco uses the deteriorating health of its policyholders to its advantage because the company knows if it waits long enough to pay out claims, its customers will die
Juries in two states, Texas and Oklahoma, have found Haag provided biased reports to State Farm to minimize or deny policyholder claims.
4. STATE FARM – CEO: Edward B. Rust Jr.; 2007 compensation, $11.7 million; 2007 profits: $5.5 billion; assets, $181.4 billion. “In many cases, the company has gone to extreme lengths to avoid paying claims, including forging signatures on earthquake waivers after the deadly Northridge earthquake, and altering engineering reports regarding damage after Hurricane Katrina.”
HEADLINE:State Farm Claims Actions Under Fire: Use of Biased Reporting Found
By Anita Lee, The Sun Herald, Biloxi, Miss.
Nov. 16–As instructed, State Farm catastrophe manager Alexis “Lecky” King refused to answer questions an Oklahoma attorney fired at her for one hour and 10 minutes.
Instead, she repeated the same phrase 87 times: “Because of the ongoing state and federal investigation, on advice of counsel, at this time, I must invoke my constitutional right to remain silent.”
She would not tell the attorney why State Farm ordered a second damage report on property when the first showed a policyholder’s losses were covered. Nor was she willing to discuss why State Farm went with that second report, finding little or no covered damage.
It happened after an Oklahoma tornado and, records show, on the Mississippi Coast after Hurricane Katrina.
“Do you believe as a team manager — catastrophe team manager — that you owe any of either the policyholders in Oklahoma who endured their catastrophe of May 1999 or the policyholders who suffered losses in Katrina any type of apology?” asked the Oklahoma policyholders’ attorney, Jeff D. Marr.
Same answer.
“Can you tell myself and this jury what it will take, what the next jury in January, or any juries down in the Gulf Coast states need to do in order to ensure that State Farm stops this kind of behavior?” Marr asked.
State Farm’s attorney objected to the question.
It didn’t matter. King feared answers might incriminate her because she is the target of a state grand jury investigation in Mississippi regarding the insurance industry’s claims practices after Katrina. She was even unwilling to say what route she took to reach the Nov. 3 meeting in Pensacola, Fla., where she lives.
The Oklahoma Supreme Court compelled King, along with State Farm executives from Bloomington, Ill., headquarters, to submit under oath to Marr’s questions.
An Oklahoma jury in May found that State Farm “recklessly disregarded” its duty to deal fairly with policyholders, doing so “intentionally and with malice” through the use of biased expert opinions after the 1999 tornado. The tornado, one of many to strike May 3, 1999, reached a strength of F5, the most catastrophic on the Fujita scale.
As a result, the first of Marr’s tornado clients collected $13 million in damages. Marr hopes to show State Farm’s behavior continued in Mississippi. By doing so, he could secure higher damages for 70 more members of his class-action lawsuit in Oklahoma.
State Farm issued a statement Friday in response to Sun Herald questions about the legal activity: “The tornado that struck Oklahoma City in 1999 and Hurricane Katrina are two separate events,” the company said. “We handle claims individually and pay what we owe based on the contract with the policyholder.”
Marr is sharing information with Mississippi attorneys representing hundreds of State Farm policyholders whose homes Hurricane Katrina damaged or destroyed.
He also is sharing information with the Mississippi attorney general, who has convened the grand jury investigation, and with the U.S. Justice Department, which has launched a probe of its own.
In fact, Marr has announced to the world on his Web site, http://www.marrlawfirm.com., where to secure court records about State Farm.
State Farm attorneys have fought to keep employee testimony private in Oklahoma and Mississippi. In fact, at State Farm’s request, an Oklahoma judge has forbade further discussion of the case by Marr and the other attorneys. State Farm is using court protections and procedures, the company said, available to all parties in a lawsuit.
As cases in both states grind forward, more information comes to light.
Executives for the nation’s largest property and casualty insurer deny any intentional misconduct. They said the company worked with nationally recognized engineering firms to help determine what policyholders were owed in less than 2 percent of 84,000 Katrina claims in Mississippi.
In sworn testimony this summer in Oklahoma, company chairman and CEO Edward B. Rust Jr. said: “And that is ultimately my concern, also, is that we want to be fair with our customers. After all, the success of this organization is driven by our ability to retain current customers and to attract new customers. The last thing we want to do is be unfair with our customers.”
Rust has not testified in Mississippi, but Lecky King did. Her testimony in a federal lawsuit filed in Gulfport is under wraps on orders from U.S. Magistrate Judge Robert H. Walker. Attorneys can’t discuss what she did or did not say.
Two State Farm whistleblowers said, King and assistant Lisa Wachter were the only employees in the Coast office allowed to communicate with engineering firms the company used to help sort out what State Farm owed some policyholders after Katrina. Normally, the whistleblowers have said, State Farm adjusters communicated directly with engineering firms.
When a report blamed the covered peril of wind for damage, the whistleblowers said, King ordered another to show the culprit was water, covered by the federal flood insurance program. The company finally called a halt to the reports altogether, the whistleblowers said, because too many showed wind damage.
Joe Hollomon, once a federal prosecutor himself, said his clients, King and Wachter, had nothing to gain by denying claims and were here to help policyholders. In Oklahoma, King’s testimony is a matter of public record, but the attorneys are not allowed to hand it out.
Hollomon told Marr before the questions started: “Obviously, we’re, you know, that’s a matter of concern to myself and my client. She’s going to assert her constitutional privilege and, of course, the dissemination of that could obviously prejudice her if we one day find ourselves in front of a jury somewhere in Mississippi, so, you know, we’re very concerned about that.”
——
State Farm engineering reports
Below are engineering reports recently filed as part of the Oklahoma lawsuit:
Larry Lowe residence, Oklahoma City
May 24, 1999: Strum Engineering, Oklahoma City, hired by State Farm, concluded high winds racked the roof, causing rafters to separate from the ridge, which could lead to leaks from rain and eventually create safety issues. Repairs recommended.
June 11, 1999: State Farm asked Haag Engineering to examine the house. Haag concluded in a report issued July 21: “It is our opinion that the Love (sic) residence was not structurally damaged by wind, and the frame requires no repairs.”
Michael and Lisa Pole property, Oklahoma City
July 19, 1999: Strider Associates, hired by the Poles, found tornado damage to roof framing, decking and brick veneer, all requiring replacement.
July 27, 1999: A State Farm claims representative makes note of the Strider report and repairs recommended, then concluded, “I believe we should hire a structural engineer to inspect and provide us with their expert opinion.”
Aug. 18, 1999: Inspecting for State Farm,Haag Engineering concluded, “The primary structural system of the Pole residence had not been damaged by wind.” Wind damaged only a few roof shingles, the report says.
Terri Mullins property, Kiln, Miss.
Oct. 23, 2005: Forensic Analysis & Engineering Corp., hired by State Farm, concluded “the primary and predominant cause of damage to the subject property was due to hurricane force winds. This is based on the displacement of the house and the absence of water damage to the same.”
Jan. 3, 2006: A second Forensic Analysis report says wind caused “tree failures,” the cause of interior damage is undetermined and that “movement of the house across the street with “minimal obvious wind damage is consistent with a buoyant force applied to the building by rising water allowing the wind to blow the house northwards until it reached an obstruction.” (State Farm interprets its policies to say wind damage is not covered when water contributes.)
Thomas and Pamela McIntosh property, Biloxi
Oct. 12, 2005: Forensic Analysis & Engineering Corp. concluded roof, door, carport and window damage was caused by wind, along with interior damage. The report State Farm ordered included a sticky note on the first page that said, “Put in Wind file — DO NOT Pay Bill, DO NOT discuss.”
Oct. 20, 2005: Forensic concluded wind damaged shingles, along with the second story floor and first floor ceilings, but said “damage to first floor walls and floors appears to be predominately caused by rising water.”
State Farm issued the following statement Friday regarding its handling of policyholder claims. It reads, in part:
“The tornado that struck Oklahoma City in 1999 and Hurricane Katrina are two separate events. We handle claims individually and pay what we owe based on the contract with the policyholder.
“State Farm occasionally seeks the help of nationally recognized engineering firms to assist us in determining the cause of loss.
“Following last year’s hurricanes, we sought assistance from these firms in less than 2 percent of the 84,000 claims filed in Mississippi. Katrina was an unprecedented event and in a small number of claims there was more than one engineering report due to multiple reasons.
“Our intent was to seek assistance to help us settle claims with our policyholders.”
McCarty is going to run the Florida insurers in the ground with his egomanaical, condescending, know-it-all attitude. Private insurers will only take the very, very limited cream of the crop and everyone else will be forced into Citizens. What a joke we have for an Office of Insurance Regulation…
“…Florida already has new companies who are eagerly looking to grow their businesses and will welcome the opportunity to add more customers.” Well, I am affected by this. Who are these new eager companies??
Who wants to have their claims settled by a boring financially stable insurer anyhow? Thanks in advance for the upcoming thrill ride, Mr. Commissioner!
This might be the beginning of the end of the private insurance market in Florida. Two big storms in a 12 month period and its all over in Florida. Can’t imagine the florida insurance commissioner is butting heads with any company trying to to get adequate rate. Give them their rate increase and let the consumers decide who to do business with. Sad day.
It is about time the state took a strong stand. They should have taking a strong stand when Allstate & State Farm started redlining and refusing to write coastal areas after Andrew and everyone else followed. Lets hope they tell them to non-renew the rest of their lines and leave the State all together.
I believe it was Ben Frankin who said something to the effect, “Its better to keep your mouth shut and have people think you are an idiot, than to open your mouth and let them know that you are.”
What does Obama have to do with the mess we have here in Florida?
We the consumer are not idiots. Let State Farm raise their rate and then let us decide who to go to for insurance. At least that way we would have a choice. These small upstart companies are small and undercapitalized. One Cat 5 could wipe them out in hours. And I don’t want the government as my insurance company. We saw them in action with Rita and Katrina.
the state has taken a stand; that’s why State Farm and other smart carriers are leaving the property market in the state to others; Insurance is not welfare, nor is it a charity. Florida is a high risk state with a repeated history of large cat losses; if the state dept of ins will not allow a carrier to collect enough premium to cover losses, there is not much choice but for them to leave. One has to wonder how this is better for Florida; it appears it would have been better to allow State Farm to take their proposed increase and remain; after all, there are free market factors involved.
I live in the midwest and we have been hit with large earthquake increases even though there has not been a related cat loss to drain the collected resources. Asking (or forcing) carriers to lose money simply because customers don’t want to pay for their true risks doesn’t fit a capitalistic model; the sharing of risk requires that we all at least share a reasonable portion of that risk. So maybe there is a bit of an Obama overtone afterall…
Somebody has got to put a stop to this nonsense – now he’s gone and driven away the biggest insurer – a couple big hurricanes and the state and these so-called “domestic insurers” will be insolvent and unable to pay claims. Then guess who they’re going to turn to (hint: the U.S. taxpayer)?
I think of the State of FL thinks they can do a better job, let them have the market. The politicians don’t get the joke. Rates in FL are below the risk they demand and if they were adequate, we would not need the Citizens Fund. not only are lower rates not good for business but artificially(politically) lowered rates on the shore are environmentally unsound. It encourages people to build where they quite frankly should’t.
State Farm and the Allstates started these Florida Pup companies so losses would not effect the parent company. They are not funded any better then some of the Regional players.
I was an Allstate agent in NY (Long Island) when Andrew hit. Once the numbers came out our managers told us if Andrew would have hit Miami, Ft Lauderdale or any other large populated area they would have gone under along with the State Farms, Geico’s etc.
I agree with Ha!. God bless the hardworking agents who have put their entire careers and investments into growing their business with State Farm. Those who chose to round coverage and write all they can are now effectively being put out of business. What seemed to be a no-risk franchise has been turned on its head. You’d think someone would have learned from the last time we went through this – anyone remember Independent Fire?
This has to be the stupidest thing I’ve seen in print in a while “McCarty noted that he has been working with state Sen. Mike Fasano, R-New Port Richey, on legislation that would limit the number of non-renewals an insurance company can issue in a year.” Yeah, that’s the answer. Limit non-renewals. Give me a break.
There are some very reasonable solutions out there to cure the market woes of this beautiful state. Sadly, there is no political courage in Tallahassee to do so. It would seem that Gov. Crist has gotten his wish and will undoubtedly chuckle as he escorts State Farm from the Sunshine State. I think he’s made a mistake.
As an independent, SF has always been a competitor of mine. But they are a good player overall, and on the corporate side, they’re smart cookies. These guys pay claims, and they have both money in the bank and the trained staff to know how to deploy it.
We’ll take up the slack on the independent side, no doubt, but don’t for one minute think that those clients that go to Citizens or one of these thinly capitalized takeout carriers will be better off. They may pay less, but the product is grossly inferior, and I don’t think we have the available capacity with *well capitalized, quality* carriers available to serve everyone.
Only one solution will fix this, like many politically difficult problems: complete meltdown. We’ll have a couple of very bad storms, see small carriers crumble, and watch Citizens completely implode. Only then, when our hand is forced, will the Cabinet and Legislature do something positive.
Farewell, big red. You’ve been a fine competitor and I’m sad to see you go.
The insurance commisioner talks about the number of insurance companies willing to take on the new business, but at the same time is trying to get legislation to limit how many can be non-renewed. OK, so if there are interested insurers, why would you want to limit how much new business they can get from those willing to pull out. Unless you know how much this really will hurt Florida’s economy. I wouldn’t believe much that comes out of this guy’s mouth. He should think about runnning for governor of Illinois.
Anyone who thinks that Floridians are better off by State Farms absence understands nothing about property insurance. If State Farm cannot get rate adequate, THE ONLY HONORABLE THING TO DO IS TO PULL OUT!! The promise we make clients is that we will pay their claims. SF is underfunded and they know they will be underfunded in the future. Has it occured to you that when State Farm pulls out, the guaranty fund in Florida loses the company best able to support other underfunded insurers. Ad Bruce, that would mean all of them.
Building in high risk areas is expensive, and is only sustainable by spending large sums of money, including the insurance part. Too bad the elected leadership isn’t more interested in leading the citizens of Florida, instead of pandering to them. Like children, voters need to be told what to do sometimes.
“State Farm Florida was established in 1998 as a stand-alone, well-capitalized company to address the unique risks posed by the state of Florida. After billions of dollars of losses from a series of 2004 storms, State Farm Florida was able to continue to operate only by borrowing $750 million from State Farm Mutual. State Farm Florida has not been able to repay the note due to its financial condition.”
Do these ‘johnny come latelys have a mother mutual to borrow, then not repay, $750M? And you know who REALLY picked up the $750M tab? Homeowners and SF policyhholders in the other 49 states.
Yeah, I really want to pick up the tab for F@#$%%^g Florida.
It was my understanding that the messiah campaigned in Florida promising a Federal subsidy program for coastal areas. As a result, this lastest move by State officials only reinforces the “need” for assistance from Washington. Already a debitor State, those of us in left in Michigan simply can’t wait for our tax dollars to be funneled to the poor folks who live in catastrophe prone areas.
Florida Insurance Commissioners had always been antagonistic towards SF. It’s a piss ant state of the dead and dying who think that everytime their retirement huts gets damaged, “somebody” must continue to pay to fix it time after time. It can’t afford to be experience rated and has to rely on the rest of the country for rate subsidies. Florida has a big problem and making it an unfriendly place to do business isn’t helping.
McCarty seems to represent exactly what is going wrong with this country. Businesses are in business to make a profit!!! No apology!!!! Obviously State Farm wasn’t making a profit! So as business owners they are choosing to leave. Good for them!!! And the Insurance Commissioner wants to “pursue all legal options” against them???? Sounds like McCarty should have made more friends, not emenies, to solve his growing problem.
Of course some little companies will start up in Florida…..and when they start losing money, they’ll leave too.
When will the residents of Florida realize at least part of their problem IS THE INSURANCE COMMISSIONER????
Another stupid political decision by our elected officials. Get out of the insurance business and let free commerce do its thing! State Farm has shown the need for an increase; let them have it. Why should a State Farm policy cost the same as a policy from some underfunded dumpy take out company? It shouldn’t. Let the people decide who they are going to buy from. The insurance dummies will buy from Peoples Trust and the like; and the insurance savvy will pay a bit more for a stable company.
More importantly though on this issue: I hope McCarty didn’t tick off State Farm so much so that they pull their sponsoring of the tow truck on the turnpike. Did anybody think of that?!
Insurance 101 dictates that insurance must be affordable and the rate must be adequate to cover losses & expenses. The problem with FL is that if a carrier were to charge an adequate rate, the product would not be affordable. So, if SF had been approved for the 47%+ rate increase they had requested some time ago, the premiums would have skyrocketed, people would have shopped & ultimately placed their cov. with a lower-priced domestic.
We can not necessarily lay the blame on the situation in Florida squarely on the shoulders of one individual.
The Governor and the Legislature are equally at fault. Their pandering to the property owners is simply a function of their getting re-elected, and then hoping that the wind won’t blow on their watch.
Keep in mind that the Governor is a Republican, the legislature is controlled by Republicans. Yet they seem hell bent on creating a socialist insurance system, so long as it is politically expedient.
Instead of regulating rates, the DOI should be regulating for solvency.
While the State of Florida will not allow State Farm to increase their already low rates, they will allow Citizens to increase thier rates, in addition to impacting every auto policy in the State with a surcharge to pay for the “catastrophe fund” what a joke!
Sorry man, there are no “insurance 101” rules about affordability. That has no bearing on the constructs of insurance rates. Actuarial soundness rules the day here. And besides, what’s affordable? Five bucks? Sure, but if you charge ten, some folks will cry fowl. A better plan, let the companies decide how much to charge, what coverage to offer and let competition will ensure.
Insurance 101 does not dictate that “insurance be affordable”. What is affordable to one, may not be affordable to another. Affordability is a matter of personal choice and financial priorities. When the government starts “requiring things to be affordable” it is NOT CAPITALISM. I personally would choose NOT TO INVEST in Florida real estate in part due to the insurance problems. But for the citizens who CHOOSE to own real estate and DESIRE insurance, they must evaluate the insurance coverage options available to them, and either be insured, or uninsured. If your lender is requiring insurance, and you can’t “afford” it, then you should get a smaller loan, ie buy less house or don’t buy the house.
And to the Florida agent….this has EVERYTHING TO DO WITH OBAMA. This is the attitude of liberal democrats….thinking that they should pass laws requiring businesses to do things that cause them to lose money….businesses close!!!! They can’t borrow from China!!!!
Gill Fin, good points. SF leaving FLA is not good for homeowners or it’s agents. If there is so much capacity available from “low priced domestic carriers” then McCarty should let SF have it’s rate increase and let the customers decide if they want to pay the SF rate or flock to these new domestic carriers.
I never see McCarty discuss anything about the actual SF policy & coverage. The SF policy offers some things that small domestics would never consider. Additionally thay have a “brand” to protect and can’t duck & run like others did after 2004/2005. Maybe that’s why they charge more?
Just saw Crist on the news on TV. His comment on State Farm leaving: “Their rates are the highest in the state, so it is good for Florida that they leave.”
Politicians have no clue; they act to get re-elected or elected to new posts. They also interviewed Alex Cink; at least she knows what is going on and will take this seriously.
I wonder how quick the state issue a order and stops this. That is the reason that Farmers issued non-renewal to all State of Texas policies in one night so the state could not stop them. They came back and changed their mind when the state backed down. This is not good for any coastal state!
Gee, it was just 2 weeks ago I predicted this would happen after the rate rejection.
Here is another prediction. They will non renew about half the policies, mostly in coastal areas. Keep some commerical and some condos. But this will only be after the Ins Commissioner files a suit against them for not comforming to the orderly withdraw requirements and being a bad neighbor. Ooh and look for some comments from Citizens as well, they are the ones that stand to take the largest hit at this point since all those State Farm agents will attempt to start moving all that business over to them ASAP.
So who is going to start the petition to have an elected Insurance Commissioner again. It is clear that he does not answer to the residents of this state now, he is the Governors puppet and is not doing anything to strenghten the insurance industry or keep solvency in the marketplace. So the Governor thinks this is a win for him. It will bite him in the A$$, but then I hear he likes that.
FL in sad shape from politicians who are practicing their trade in being political. They unfortunately know NOT of what they speak and the citizens will stand to suffer. Wait for an assessment (again) to pay for a couple of big storms and there will AGAIN be an outcry for reform. By then these clowns will have used the FL Ins commissioner postion as political step-stone and moved on up…just look at our Sr Senator.
“Definition of good neighbor: someome to be trusted; a courteous, frinedly source of help when help is needed; someone you can count on; someone who cares.” Edward B. Rust, Jr., President of State Farm.
State Farm was built on face-to-face Good Neighbor service. Today, even though we have more than 64 million policies, we still believe and live by Good Neighbor service. It’s more than a slogan; it’s the way we set ourselves apart from other companies. It’s been that way since G.J. Mecherle founded the Company in 1922. It’s a State Farm tradition. State Farm’s mission is to help people manage the risks of everyday life, recover from the unexpected, and realize their dreams.
We are people who make it our business to be like a good neighbor; who built a premier company by selling and keeping promises through our marketing partnership; who bring diverse talents and experiences to our work of serving the State Farm customer.
Our success is built on a foundation of shared values — quality service and relationships, mutual trust, integrity and financial strength.
Our vision for the future is to be the customer’s first and best choice in the products and services we provide. We will continue to be the leader in the insurance industry and we will become a leader in the financial services arena. Our customers’ needs will determine our path. Our values will guide us.
Insurance 101 says rates must be not excessive, inadequate, or unfairly discriminatory. This is for both the protection of the insurer and the insurance market as a whole.
The Florida regulators have violated their duty by demanding inadequate rates.
I SAY GOOD BYE STATE FARM WE ARE ALL SICK OF YOUR WHIPPING US AND SMILE WELL YOU SCREW US . THE ONLY PERSON LEFT ON THIS PLANT THAT THINKS STATE FARM IS SO GREAT IS MR [nobody important]. GOOD BYE AND GOOD RIDANCE STATE FARM. AND TAKE ALL YOUR CRAP POLICIES WITH YOU.
Nov. 16–As instructed, State Farm catastrophe manager Alexis “Lecky” King refused to answer questions an Oklahoma attorney fired at her for one hour and 10 minutes.
Instead, she repeated the same phrase 87 times: “Because of the ongoing state and federal investigation, on advice of counsel, at this time, I must invoke my constitutional right to remain silent.”
She would not tell the attorney why State Farm ordered a second damage report on property when the first showed a policyholder’s losses were covered. Nor was she willing to discuss why State Farm went with that second report, finding little or no covered damage.
It happened after an Oklahoma tornado and, records show, on the Mississippi Coast after Hurricane Katrina.
“Do you believe as a team manager — catastrophe team manager — that you owe any of either the policyholders in Oklahoma who endured their catastrophe of May 1999 or the policyholders who suffered losses in Katrina any type of apology?” asked the Oklahoma policyholders’ attorney, Jeff D. Marr.
Same answer.
“Can you tell myself and this jury what it will take, what the next jury in January, or any juries down in the Gulf Coast states need to do in order to ensure that State Farm stops this kind of behavior?” Marr asked.
State Farm’s attorney objected to the question.
It didn’t matter. King feared answers might incriminate her because she is the target of a state grand jury investigation in Mississippi regarding the insurance industry’s claims practices after Katrina. She was even unwilling to say what route she took to reach the Nov. 3 meeting in Pensacola, Fla., where she lives.
The Oklahoma Supreme Court compelled King, along with State Farm executives from Bloomington, Ill., headquarters, to submit under oath to Marr’s questions.
An Oklahoma jury in May found that State Farm “recklessly disregarded” its duty to deal fairly with policyholders, doing so “intentionally and with malice” through the use of biased expert opinions after the 1999 tornado. The tornado, one of many to strike May 3, 1999, reached a strength of F5, the most catastrophic on the Fujita scale.
As a result, the first of Marr’s tornado clients collected $13 million in damages. Marr hopes to show State Farm’s behavior continued in Mississippi. By doing so, he could secure higher damages for 70 more members of his class-action lawsuit in Oklahoma.
State Farm issued a statement Friday in response to Sun Herald questions about the legal activity: “The tornado that struck Oklahoma City in 1999 and Hurricane Katrina are two separate events,” the company said. “We handle claims individually and pay what we owe based on the contract with the policyholder.”
Marr is sharing information with Mississippi attorneys representing hundreds of State Farm policyholders whose homes Hurricane Katrina damaged or destroyed.
He also is sharing information with the Mississippi attorney general, who has convened the grand jury investigation, and with the U.S. Justice Department, which has launched a probe of its own.
In fact, Marr has announced to the world on his Web site, http://www.marrlawfirm.com., where to secure court records about State Farm.
State Farm attorneys have fought to keep employee testimony private in Oklahoma and Mississippi. In fact, at State Farm’s request, an Oklahoma judge has forbade further discussion of the case by Marr and the other attorneys. State Farm is using court protections and procedures, the company said, available to all parties in a lawsuit.
As cases in both states grind forward, more information comes to light.
Executives for the nation’s largest property and casualty insurer deny any intentional misconduct. They said the company worked with nationally recognized engineering firms to help determine what policyholders were owed in less than 2 percent of 84,000 Katrina claims in Mississippi.
In sworn testimony this summer in Oklahoma, company chairman and CEO Edward B. Rust Jr. said: “And that is ultimately my concern, also, is that we want to be fair with our customers. After all, the success of this organization is driven by our ability to retain current customers and to attract new customers. The last thing we want to do is be unfair with our customers.”
Rust has not testified in Mississippi, but Lecky King did. Her testimony in a federal lawsuit filed in Gulfport is under wraps on orders from U.S. Magistrate Judge Robert H. Walker. Attorneys can’t discuss what she did or did not say.
Two State Farm whistleblowers said, King and assistant Lisa Wachter were the only employees in the Coast office allowed to communicate with engineering firms the company used to help sort out what State Farm owed some policyholders after Katrina. Normally, the whistleblowers have said, State Farm adjusters communicated directly with engineering firms.
When a report blamed the covered peril of wind for damage, the whistleblowers said, King ordered another to show the culprit was water, covered by the federal flood insurance program. The company finally called a halt to the reports altogether, the whistleblowers said, because too many showed wind damage.
Joe Hollomon, once a federal prosecutor himself, said his clients, King and Wachter, had nothing to gain by denying claims and were here to help policyholders. In Oklahoma, King’s testimony is a matter of public record, but the attorneys are not allowed to hand it out.
Hollomon told Marr before the questions started: “Obviously, we’re, you know, that’s a matter of concern to myself and my client. She’s going to assert her constitutional privilege and, of course, the dissemination of that could obviously prejudice her if we one day find ourselves in front of a jury somewhere in Mississippi, so, you know, we’re very concerned about that.”
——
State Farm engineering reports
Below are engineering reports recently filed as part of the Oklahoma lawsuit:
Larry Lowe residence, Oklahoma City
May 24, 1999: Strum Engineering, Oklahoma City, hired by State Farm, concluded high winds racked the roof, causing rafters to separate from the ridge, which could lead to leaks from rain and eventually create safety issues. Repairs recommended.
June 11, 1999: State Farm asked Haag Engineering to examine the house. Haag concluded in a report issued July 21: “It is our opinion that the Love (sic) residence was not structurally damaged by wind, and the frame requires no repairs.”
Michael and Lisa Pole property, Oklahoma City
July 19, 1999: Strider Associates, hired by the Poles, found tornado damage to roof framing, decking and brick veneer, all requiring replacement.
July 27, 1999: A State Farm claims representative makes note of the Strider report and repairs recommended, then concluded, “I believe we should hire a structural engineer to inspect and provide us with their expert opinion.”
Aug. 18, 1999: Inspecting for State Farm,Haag Engineering concluded, “The primary structural system of the Pole residence had not been damaged by wind.” Wind damaged only a few roof shingles, the report says.
Terri Mullins property, Kiln, Miss.
Oct. 23, 2005: Forensic Analysis & Engineering Corp., hired by State Farm, concluded “the primary and predominant cause of damage to the subject property was due to hurricane force winds. This is based on the displacement of the house and the absence of water damage to the same.”
Jan. 3, 2006: A second Forensic Analysis report says wind caused “tree failures,” the cause of interior damage is undetermined and that “movement of the house across the street with “minimal obvious wind damage is consistent with a buoyant force applied to the building by rising water allowing the wind to blow the house northwards until it reached an obstruction.” (State Farm interprets its policies to say wind damage is not covered when water contributes.)
Thomas and Pamela McIntosh property, Biloxi
Oct. 12, 2005: Forensic Analysis & Engineering Corp. concluded roof, door, carport and window damage was caused by wind, along with interior damage. The report State Farm ordered included a sticky note on the first page that said, “Put in Wind file — DO NOT Pay Bill, DO NOT discuss.”
Oct. 20, 2005: Forensic concluded wind damaged shingles, along with the second story floor and first floor ceilings, but said “damage to first floor walls and floors appears to be predominately caused by rising water.”
State Farm issued the following statement Friday regarding its handling of policyholder claims. It reads, in part:
“The tornado that struck Oklahoma City in 1999 and Hurricane Katrina are two separate events. We handle claims individually and pay what we owe based on the contract with the policyholder.
“State Farm occasionally seeks the help of nationally recognized engineering firms to assist us in determining the cause of loss.
“Following last year’s hurricanes, we sought assistance from these firms in less than 2 percent of the 84,000 claims filed in Mississippi. Katrina was an unprecedented event and in a small number of claims there was more than one engineering report due to multiple reasons.
“Our intent was to seek assistance to help us settle claims with our policyholders.”
mr no one I WANT YOU TO KNOW I DO NOT GET MONEY FOR THIS..ITS JUST TIME TO WAKE UP…..
ONE THING STATE FARM FORGETS TO TELL ALL OF YOU IS THAT IN FLORIDA WHEN THE WIND HIT HOMES PEOPLE WERE COVERED, BUT STATE FARM JUST DECIDED IT WAS ALL WATER SO NO CLAIMS WERE PAID. THEN THEY CRIED TO THE GOVERNMENT TO COVER ALL FLOODS AND HAVE PASSED LAWS SO THE GOVERNMENT WILL COVER WIND DAMAGE AS WELL. I SAY IF YOU TAKE ALL THE BILLONS IN PREMIUM AND THEN CONVENIENTLY DO NOT COVER ANYTHING—WHAT A RACKET. STATE FARM MUST STOP HIDING THE TRUTH BY SEALING RECORDS IN OUR COURT ROOMS. THIS BIG GIANT HAS SCREWED THE AMERICAN PEOPLE FOR TO DARN LONG. WE SAY PLEASE LEAVE ALL 50 STATES MY GOOD NEIGHBOR, AND TAKE YOUR BS COMMERCIAL OFF THE AIR. I THINK ITS HIGH TIME THE ETHICS BOARD OPENED UP THEIR EYES AND TAKE A CLOSE LOOK AT STATE FARM AND ANY INDUSTRY THAT CAN RAPE PEOPLE AT THE LOWEST TIMES OF THERE LIFE AND THE LITTLE JUNIOR OF A CEO ED RUST WHO HAS TAKEN A GREAT COMPANY THAT HIS GREAT GRANDFATHER STARTED AND TURNED IT INTO HIS LITTLE BANK. WAKE UP PEOPLE AND LOOK AT THE HISTORY. I DID NOT MAKE IT UP. I WISH THAT I DID NOT KNOW THE TRUTH, BUT I DO SO I AM TRYING TO TELL YOU. I HOPE WITH ALL HOPE AND THE LOVE OF THIS GREAT AMERICA SOMEONE ELSE MAY CARE.
Subject Posted By Posted On
RE: RE: State Farm’s Business Decision – Calypso Ratemake
Can someone please tell the few stupid posters not to blog and use hallucinogenic drugs at the same time! wtf ?
Folks, ding ding….we live in a free market system, tell the lawmakers this….they should not be setting rates, just approving them. Consumers will sort it out.
If companies want to come to Fla, leave Fla or stay, it is their right to do so….And stfu you whiners. I am going to hurl if I hear another of you bellyache about this junk….
Floridians should be embarrased for suckling off of the other states insurance reserves, What are you thinking….does the population in the other 49 states really have to pay for your losses in the sunshine state ?????? Arrogant, Intitled welfare babies…GO TEAM OBAMA. Yea Economic Justice for all (as long as you live in Fla) Should the other states feel Patriotic for paying for your cat claims ? Pathetic Loosers !
I have been spectator of the Fla insurance circus for many years now..and sad to say, I think the end is in sight…Soon,.one big ugly storm and its over….lights out….and guess what, it may be the best way out: total collapse of the system…then maybe, just maybe, somehow it may get better.
Below I have attached two prior news articles concerning SF’s finance. The rate increase they requested was not and is not justifiable. I feel that SF’s bluff needs to be called and if they carry threw on it the remainder of their business should be pulled. This would entice another player to enter Florida. Also if this was not a bluff then they would be out of here in under one year not two.
3:21 p.m. February 29, 2008
BLOOMINGTON, Ill. – State Farm Insurance, the nation’s largest insurer, said Friday that profit rose 3 percent last year on the strength of higher auto policyholder dividends despite a steep decline in property-casualty underwriting.
The company said nearly half of the 79 percent drop in underwriting, to $621 million from $3 billion in 2006, was due to a fourth consecutive year of auto rate decreases.
Overall, State Farm said net income edged up to $5.46 billion in 2007 from $5.32 billion a year earlier. It was the fifth straight profitable year for the insurer after significant losses in 2001-02.
Total revenue increased 1.8 percent to $61.6 billion from $60.5 billion.
Chief Financial Officer Michael Tipsord downplayed the decline in property-casualty. “Because there can be significant volatility in the insurance business, we must avoid the temptation of attributing too much significance to short-term financial results – long-term sustainability is the key,” he said in a statement.
2nd article:
State Farm Insurance’s chairman and CEO received an 82 percent raise after the company posted a record profit last year, a statement from the Bloomington-Ill.-based insurer said this week.
Chairman and Chief Executive Officer Ed Rust Jr. got a $5.26 million raise. He earned $11.66 million in 2006 with a base salary of $1.77 million and results-based bonus of $9.89 million, the statement said. Rust made $6.4 million in 2005 and $5.5 million in 2004.
The absence of a major catastrophe helped the insurer generate a record $5.32 billion profit last year, compared to $3.24 billion in 2005 when Hurricane Katrina hit the Mississippi Gulf Coast, release said.
Copyright 2009 Associated Press
This is a ploy. State Farm makes money by the “Law of Large Numbers. Policy holders in Nebraska, Wyoming, Tennessee and throughout the United states pay premiums which are payable to claims anywhere within the company.
State Farm created “State Farm Florida” to exaggerate the proble.
If I were the Commissioner, I would say if you pull out of property, you MUST pull out of Automobile and Life Insurance also.
The NAIC should also advise if they pull out of Florida, they must also pull out of the other 49 states. The NAIC is THE GROUP of INSURANCE COMMISSIONERS and should work together.
first of all, it is a business and as a business it has a right to make a profit. as far as being regulated, it needs to be solvent. fair to handle any claims filed by any policyholder.
we find that during the latest battles between ph (policyholder), insurance company, and the state – we not sure who is actually right or wrong. we like to place blame anywhere but on our own shoulders and act properly. if you look at the many claims filed, how many were actually covered correctly? how many folks were asking for more than what they were paying for? that state needs help because it created it’s casualty insurance to assist when other could not.
we know that the state has no clue on insurance because it is asking all policies in fl to add additional $$ to the fl catastrophe fund. if you read and look, that is still to cover already exisiting losses, not future ones! for a new resident of the state, why should they pay for back losses when they did not live there. if it were me, i’d be suing the state back for my money.
here’s another look at this as well. one person said it earlier, most folks living in fl are retired and living on a fix income. with the economy the way it is, that income has shortened. the cost of living has gone up. cost to rebuild a house is not near it was not even 5 yrs ago. so we run into a conundrum of sorts, one where the insurance company wants to raise rates to handle the possible risks and one where state wants to restrict rates even when they are behind in paying on their own claims. now add that to the cost of expenses/living. whose is going to win? nobody!!
I’m gonna go out on a limb here and state the obvious: the last several commentors don’t have clue what they’re talking about.
First, cutting and pasting articles about how much profit the entire State Farm organization made last year does in no way prove whether rates are inadequate or excessive in a given state, or whether a rate change request is justifiable.
Property/Casualty insurance is regulated by each state, and each state DOI is charged with several separate responsibilities. Three of these are: Market Conduct (“fair” dealings with policyholders), Rate Regulation (rates shall not be excessive, inadequate or unfairly discriminatory, blah blah blah), and Solvency (does the company hold enough money in reserves to pay all outstanding claims, whether reported or unreported, for policyholders IN THAT STATE?).
The “conduct” of State Farm when settling claims is not a factor in whether to approve or deny a proposed rate change. The amount of premium a company collects, as well as all their losses and expenses in a state, including investments – this is all public information. If you think a company is ripping you off premium-wise, just go look at their loss and expense ratios and compare them to other insurance companies (as you would when deciding which mutual fund to invest with).
NO, the NAIC should NOT “punish” State Farm for pulling out of Florida. This is Florida’s bed and Floridians have to lay in it. I have chosen not to live in Florida and I do NOT want to pay to rebuild your house every time the wind blows.
Making them “stay” in Florida is Socialism, not Capitalism. Apparently I didn’t get the memo that we’re switching.
Caveat: I am a friggin’ hypocrite, b/c I hate health insurers as much as anyone and actually wouldn’t mind radical socialist overhaul . . .
Here is another thought. If State Farm Florida, who according to Governor Crist is the hightest priced insurer in the state of Florida, is losing money then think about all the little start up insurance companies in Florida who are under cutting the premiums of their competition to get dollars on the books and who are less capitalized, and how much money they must be losing and eating into their reserves, if they have any.
Other States have done it. By doing so you are telling the insurance company we are running the State not you. If they don’t like it they can make a business choice and leave. Most don’t.
Spencer, a State Farm customer in Florida and elsewhere for 30 years, hopes to find wind coverage from someone other than Citizens.
“They are just dumping us into the Citizens pool,” he said. “It is not as good a coverage. If they are just dumping liability back to the government, why not just have government insurance?”
Malins said his agency tries to avoid putting customers into Citizens because they may later become “take-out” policies by other carriers.
Citizens was criticized for poor customer service after the 2004 hurricanes, but regulators and others say it has improved.
“You have to give them credit for trying to act more like an insurance company,” Malins said.
Some homeowners with other State Farm lines, such as auto, are thinking about taking that business elsewhere.
Citizens does not offer auto insurance, and those homeowners could miss out on multi-line discounts they now enjoy.
State Farm, Florida’s largest auto carrier, expects some of those customers will leave.
“It would be naive of us to think we won’t lose some of our auto business because of the nonrenewals,” Neal said.
….they should not be setting rates, just approving them. Consumers will sort it out.
policyholders.”
Two former insurance adjusters for State Farm will stand trial before a federal judge who earlier determined they breached employment contracts when they copied thousands of insurance records in an attempt to prove policyholders were being cheated after Hurricane Katrina
State Farm began the policy cancellations last fall but was soon blocked by the Florida Office of Insurance Regulation. The original plan was to drop customers who lived within several miles of the coast or other bodies of water, while retaining any of those with other company policies, such as auto.
The insurance regulators objected to that practice. After reaching an agreement with OIR over who would be canceled — along with promising a 9 percent rate cut — State Farm began resending nonrenewal notices in January. That premium reduction followed an average 53 percent rate hike in 2006.
The company is now cutting all windstorm policyholders who live within one mile of the coast, regardless of any other coverage they have
Make em quit auto as well. What a dumb idea. They should also make them sell hamburgers too since the regulators believe it is their job to decide wether a company can make a profit or not. The Fla. OIR sets rates! Period, end of story. Ask any Fl. Company. They supress rates and mandate credits for bogus bs. I say all at the OIR get fired + the Gov.
Anyone read the comments today by People’s Trust Insurance Company’s CEO? This coming from a man who has been in the insurance business every bit of 1-2 years, which I believe is the same age of his insurance company he works for. Sure he sells his policies for half price, but keep in mind he has never had to deal with a storm in his “insurance career”. His company may just well be one large hurricane away from insolvancy unless he has plenty of reinsurance, and not the reinsurance through the state.
One Katrina/Andrew hurricane going through any metro area of FL will put under most of these new start up companies, and leave the citizens of FL with huge assessments for the next 10 years.
He has this great idea to fix the catastrophe situation in the state, that he will announce in a couple of weeks. Good timing of this idea, to announce it right after the pullout was announced. Where has this idea been for the last two years?
State Farm Florida was established in 1998 as a stand alone company. After billions of dollars of losses from a series of 2004 storms, State Farm Florida borrowed $750 million from State Farm Mutual. State Farm Florida has not been able to repay the note due to its financial condition, according to the company.
The building ordinances need to change in Florida if they really want to prevent losses. If those cheaply built homes were here in Michigan they would collapse on the first snow fall. The only solution is to adopt the construction style of the homes on Bermuda. They don’t blow over with the first windstorm.
You can’t be serious. If there was a meltdown, that would make the policiticians even more bold. They would blame all the carriers for the governments mistake,(because we are easy targets) saying how greedy the insurance industry is for pulling out. They would seize the opportunity to show the US that a National Hurricane fund is needed and make the US tax payer pay for FL’s idiocy and inadequate rates. Just look at Katrina.
Yeah a meltdown will create change but not the right change.
Your numbers do not reflect State Farm Florida. These are numbers for the national company, if you do not know what you are talking about please do not interject your ignorant response. State Farm Florida is a seprate company.
There are many people who have had great experiences with insurance carriers and others who have not and there are many angles that each of us can come from and attack or applaud. However we should be interested in the long term fix for us individually, not in what has happened because it has been decided on already. Unless there is some form of negotiation between STATE FARM (SF) and the DEPT OF INSURANCE that takes place before SF formally submits its request to pullout, let’s face it they are a leaving. Now I too agree that things will be settled when the wind blows I don’t want it to blow as a fellow homeowner however it’s just a matter of time till then we can just make our best decision based on the information that our hired Professionals (INDEPENDENT INSURANCE AGENTS) provide us. Unfortunately, if you as a consumer leave yourself subject to a CAPTIVE AGENT like SF, or ALLSTATE, or NATIONWIDE, you could be tossed aside when your policy is not deemed profitable, it has even happened in AUTO INSURANCE. Again lets face it insurance companies are here to turn a profit yet if their profit margin has needs to be greater then it is they are going to increase rates. Most of you here are very informed individuals however there are many moms and pops who just pay their mortgage escrow accounts and would be forced after the fact to pay an increased payment after the fact that is way out of their budget (47% higher) and this is why the state has to make decisions like this. There are other more specialized INSURANCE CARRIERS who specialize in Florida and who have the PROPER REINSURANCE to sustain viability available to every Floridian. I urge you to visit http://WWW.SEVERALQUOTES.COM so you do as I did and work with an INDEPENDENT AGENT who can provide you with proposals from many carriers where citizens isn’t the only option offered no matter the age of the home. God bless you all for your input and best wishes to all.
Hey all you Socialists out there that want to force a for profit company to stay in business in an area that is high risk and according to them if they stay, they will not be able to pay your claims. You do realize that by cancelling policies that they will not make any money. They are not raping anyone by leaving. According to them they are doing you a favor by making you pick another carrier that should be able to pay your claim.
A good neighbor would tell you if they could no longer support their end of a contract. that is what State Farm is doing.
Sad to see the government drive them away, but let them go.
You are not entitled to demand anything from State Farm, they are however required to abide by certain financial standards and they have admitted that they can not do that anymore.
And can someone tell my why the attorneyspeak does not jive with any independent analysis done by consumer reports or JD Powers? Why do the independent analysts reach a different conclusion than the blood sucking attorneys? Why is it that policyholders answer my claims questionnaire with nothing but positive responses about their claims experience? Why do people cut and paste the accusatory headlines but not the retractions or subsequent exoneration of State Farm lawsuits? Why the hard on for State Farm? Jealous?
Not able to win in court? Turned down for insurance by State Farm? Turned down for a job by State Farm?
The cut and pasters MUST have a sad State Farm story of their own to tell. And certainly the SF haters are nothing but objective.
This from Ed Rust ‘We are struck by the irony of this situation. At a time when the whole world is learning almost daily about the importance of financial strength and stability, State Farm Florida hasn’t been allowed to take prudent, responsible steps that would allow it to meet its obligations and remain a contributing component of Florida’s economy.’
Think how pissed a homeowner must be to learn he will not be able to insure with SF. For those of you who don’t want to pay more for SF – why would you care if I want to?
Why is anyone actually suprised with this action? State Farm has been the favorite whipping boy for the Florida government and the professional State Farm hate posters on this site for years. It had to come. There is nothing to be surprised about. If you run a grocery store chain and don’t make money in an area, you close the store. By the way, there are a lot of insurance companies that are auto, wc, life, health and bond only. When will these professional cut and pasters start demanding these other companies write property or get out? They are paid idiots.
Why does a business leave a state when they are making money! Insurance companies need to make money to pay claims. Insurance companies are not like the government who can just print some more. It is popular to think insurance companies are evil and there is an endless supply of money . Come on people take responsibility for your own life, learn the truth and then make informed decisions. Does it really make sense that State Farm is making money!
I am an independent insurance agent in Clearwater, FL. We work with over 15 insurance carriers that are currently writing homeowner’s insurance up to 100 years old throughout the state.
If there are State Farm policyholder’s that are looking for coverage in the private marketplace feel free to e-mail me at info@tampabayinsurance.net, call us at 727-213-1890 or request a quote online at http://www.tampabayinsurance.net.
Best regards,
Doug Leavy
Principal Agent
Strategic Insurance Services
Floridians stand up! This is not an insurance issue any more, this is an economic issue. we can’t afford to let the state farm jobs leave the state of florida. surely we can find a compromise.
Haag denies bias, but State Farm suspended business with the company in June and ordered an independent investigation after an Oklahoma jury awarded a total of $13 million to a policyholder over tornado damages. Subsequent trials are set to determine damages for 70 other policyholders, all of whom had claims investigated by Haag.
In past court cases, judges have chastised and even fined State Farm for withholding records the company was ordered to produce. Evidence the company destroyed documents has been presented in several cases.
In the Oklahoma case, after State Farm finally turned over to the court a “claims legal research” DVD and other records, Judge Richard G. Van Dyck told company attorneys
“As I was watching these tapes I just want to say this for the record, the hair on the back of my neck did — did stand up because I was seeing things there that early on in this case I was told by (State Farm) defense counsel didn’t exist and couldn’t be produced. So I’m not real happy with that and I want to remind all counsel that their ethical responsibilities as attorneys outweigh the wishes of their clients.”
Gary T. Fye, an expert in the analysis of disputed insurance claims who lives in Nevada, often testifies in insurance cases. Fye, who said he has testified on behalf of policyholders and insurance companies, has provided the courts information on State Farm’s history of destroying and withholding records.
It’s in black & white. They’ve been doing this for years. Every year, they found another exclusion to insert into the contract to Protect their Finances, and not the Policyholder.
ONE THING STATE FARM FORGETS TO TELL ALL OF YOU IS THAT IN FLORIDA WHEN THE WIND HIT HOMES PEOPLE WERE COVERED, BUT STATE FARM JUST DECIDED IT WAS ALL WATER SO NO CLAIMS WERE PAID. THEN THEY CRIED TO THE GOVERNMENT TO COVER ALL FLOODS AND HAVE PASSED LAWS SO THE GOVERNMENT WILL COVER WIND DAMAGE AS WELL. I SAY IF YOU TAKE ALL THE BILLONS IN PREMIUM AND THEN CONVENIENTLY DO NOT COVER ANYTHING—WHAT A RACKET. STATE FARM MUST STOP HIDING THE TRUTH BY SEALING RECORDS IN OUR COURT ROOMS. THIS BIG GIANT HAS SCREWED THE AMERICAN PEOPLE FOR TO DARN LONG. WE SAY PLEASE LEAVE ALL 50 STATES MY GOOD NEIGHBOR, AND TAKE YOUR BS COMMERCIAL WITH YOU. I THINK ITS HIGH TIME THE ETHICS BOARD OPENED UP THEIR EYES AND TAKE A CLOSE LOOK AT STATE FARM AND ANY INDUSTRY THAT CAN RAPE PEOPLE AT THE LOWEST TIMES OF THERE LIFE AND THE LITTLE JUNIOR OF A CEO ED RUST WHO HAS TAKEN A GREAT COMPANY THAT HIS GREAT GRANDFATHER STARTED AND TURNED IT INTO HIS LITTLE BANK. WAKE UP PEOPLE AND LOOK AT THE HISTORY. I would find a new job and better insurance SF IS GOING DOWN. TO MUCH HISTORY OF BAD FAITH. 44% INCRESS WAS NOT GOOD ENOUGH .
The Insurance Industry has lobbied over the years to see that there is no federal agency which oversees the insurance industry, essentially leaving no federal law or enforcement to protect Insureds against Unfair Insurance Claims Practices. Currently this authority lays at the state level only.
Some states laws allow (some don’t) for judges to award attorney’s fees as well as punitive damages on behalf of the plaintiff suing an Insurance Company in a bad-faith insurance matter (an Insurer’s unreasonable withholding of insurance policy benefits). The importance in having the threat of punitive damages (in an amount sufficient enough to deter malicious, fraudulent or oppressive conduct) being awarded in bad faith cases is enormous as it is the only financial incentive for an Insurer to abide by fair dealing and acceptable good faith standards with Insureds. In the absence of the threat of punitive damages, financially, an Insurer is actually encouraged to engage in unfair claims practices.
The fact that each state has its own system for overseeing insurance companies poses a great problem for policyholders particularly in those states where recent legislative changes and court decisions favorable to the insurance industry may encourage bad faith conduct. Victims of insurance company unfair claims practices are badly in need of federal regulations that, if nothing more, would at least establish a minimum single uniform national standard of Insurer conduct.
In the absence of such a national standard, and according to varying standards independently set by each state, Unfair Insurance Claim Settlement Practices are generally defined as “if the Insurer knowingly commits or performs with such frequency as to indicate a general business practice” according to the following:
Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue;
Failing to acknowledge and act with reasonable promptness upon communications with respect to claims arising under insurance policies;
Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies;
Refusing to pay claims without conducting a reasonable investigation based upon all available information;
Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed;
Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear;
Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by such insureds;
Attempting to settle a claim for less than the amount to which a reasonable man would have believed he was entitled by reference to written or printed advertising material accompanying or made part of an application;
Attempting to settle claims on the basis of an application which was altered without notice to, or knowledge or consent of the insured;
Making claims payments to insureds or beneficiaries not accompanied by statements setting forth the coverage under which the payments are being made;
Making known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration;
Delaying the investigation or payment of claims by requiring an insured, claimant, or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information;
Failing to promptly settle claims, where liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage;
Failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement;
Using as a basis for cash settlement with a first party automobile insurance claimant an amount which is less than the amount which the insurer would pay if repairs were made unless such amount is agreed to by the insured or provided for by the insurance policy.
tool goes here The 5th U.S. Circuit Court of Appeals handed a victory to Louisiana policyholders this week in a Katrina insurance case, but the ruling won’t benefit Mississippians because the state lacks a law requiring timely payment of claims.
In the Louisiana case of Grilletta v. Lexington Insurance Co., a trial judge levied a penalty equal to 25 percent of the undisputed amount paid for wind damage because the company failed to act on the claim within 30 days of receiving proof of the loss. In fact, the appellate ruling said, “Lexington arbitrarily sat on the claim for over two months” after an adjuster concluded wind had destroyed the house. Lexington then hired an engineering firm that blamed the loss on storm surge, excluded from coverage. The April 2006 report also noted wind damage.
In June 2006, Lexington sent the policyholder a $311,055.38 check for the wind damage.
A trial judge levied a 25 percent penalty on that amount for the arbitrary late payment. The judge rejected penalties for the additional amount awarded at trial, $248,325.42, reasoning there was a legitimate coverage dispute.
The appellate court ordered the judge to assess the 25 percent penalty on coverage awarded at trial, saying failure to make timely payment on a covered claim exposes the insurer to penalties on the entire claim.
Mississippians, hundreds of whom waited more than two years for Katrina payments, lack similar protection and are unlikely to get it from the current Legislature, say policyholder attorneys and state Sen. David Baria. Baria is sponsoring a bill that mandates timely payment of claims.
“I believe that would get the insurance companies’ attention as far as treating policyholders more fairly,” said attorney Ben Galloway of Owen Galloway & Myers in Gulfport. “Right now, the deck is stacked against the policyholder. We’ve seen it over and over in Katrina litigation.
“There’s really not much incentive for insurance companies to be fair with insureds on a claim.”
Baria’s bill sets time frames for processing and paying claims, with extensions for insurance companies in catastrophes. Failure to make timely payment subjects companies to 18 percent annual interest and attorney’s fees. The policyholder bill of rights includes other consumer protections.
“It encourages the insurance companies to do the right thing in a timely manner,” said Baria, D-Bay St. Louis. “The insurance company obviously benefits from not paying in a timely manner, whereas the insured’s condition worsens over time. Then the policyholder settles the case for far less than they are entitled to because they’re under duress. That’s what this type provision is designed to prevent.”
Baria holds little hope for passage of the time provision. A much-weaker bill of rights passed the House last year, but Senate Insurance Committee Chair Eugene S. “Buck” Clark never even brought it up for discussion.
“The insurance industry is very powerful,” Baria said. “They exert their influence over various pieces of legislation, in Mississippi and nationally.”
Clark said he is willing to look at Baria’s bill. They plan to meet next week.
However, Clark said, “I’m not going to promise now which bills I might bring up.” Clark also acknowledged insurance lobbyists aplenty roam the state Capitol.
“There’s a lobbyist for every insurance company, and then they have contract lobbyists,” he said. “Oh yeah, they’re up there. I talk to all of them.” He said the lobbyists had nothing to do with his failure to allow committee discussion of the 2008 policyholder bill.
“We’re all policyholders,” Clark said. “I wouldn’t say it was the lobbyists at all. It’s just me talking to some of my colleagues.”
It’s amazing how these insurance companies can collected premiums for years on end and when the insured need to use their policy, they suddenly don’t hold up their end of the contract. My husband and I had State Farm for over 20 years, faithfully paid over $35,000 in insurance premiums (home and auto) and when it came time to pay out for the minor hurricane damage we sustained in Katrina (minus our deductible) they rejected it. Then they pull the plug and decide they made their money and it’s time to get out of the home or renter’s insurance and find some other avenue to collect $ without having to pay out. Sad and unfair to those who faithfully paid their premiums and then were left high and dry and some legal loophole that the damage was caused by “flood” not WIND hurricane. State Farm They lined their pockets and got the heck out.
Don’t respond to Melanie William. She regularly whines about this issue. It doesn’t matter if she paid for the coverage or not, she wants it. The morons are taking over this site on this issue and many others.
Will you beoches THINK just for a second, don’t rail against State Farm, they are REACTING to a situation. The cause of that SITUATION is FULLY ON THE REGULATORS !
THERE IS NO DENYING THIS…….NO WAY. THANK YOUR LEADERS IN STATE GOVT.
Nov. 16–As instructed, State Farm catastrophe manager Alexis “Lecky” King refused to answer questions an Oklahoma attorney fired at her for one hour and 10 minutes.
Instead, she repeated the same phrase 87 times: “Because of the ongoing state and federal investigation, on advice of counsel, at this time, I must invoke my constitutional right to remain silent.”
She would not tell the attorney why State Farm ordered a second damage report on property when the first showed a policyholder’s losses were covered. Nor was she willing to discuss why State Farm went with that second report, finding little or no covered damage.
It happened after an Oklahoma tornado and, records show, on the Mississippi Coast after Hurricane Katrina.
“Do you believe as a team manager — catastrophe team manager — that you owe any of either the policyholders in Oklahoma who endured their catastrophe of May 1999 or the policyholders who suffered losses in Katrina any type of apology?” asked the Oklahoma policyholders’ attorney, Jeff D. Marr.
Same answer.
“Can you tell myself and this jury what it will take, what the next jury in January, or any juries down in the Gulf Coast states need to do in order to ensure that State Farm stops this kind of behavior?” Marr asked.
State Farm’s attorney objected to the question.
It didn’t matter. King feared answers might incriminate her because she is the target of a state grand jury investigation in Mississippi regarding the insurance industry’s claims practices after Katrina. She was even unwilling to say what route she took to reach the Nov. 3 meeting in Pensacola, Fla., where she lives.
The Oklahoma Supreme Court compelled King, along with State Farm executives from Bloomington, Ill., headquarters, to submit under oath to Marr’s questions.
An Oklahoma jury in May found that State Farm “recklessly disregarded” its duty to deal fairly with policyholders, doing so “intentionally and with malice” through the use of biased expert opinions after the 1999 tornado. The tornado, one of many to strike May 3, 1999, reached a strength of F5, the most catastrophic on the Fujita scale.
As a result, the first of Marr’s tornado clients collected $13 million in damages. Marr hopes to show State Farm’s behavior continued in Mississippi. By doing so, he could secure higher damages for 70 more members of his class-action lawsuit in Oklahoma.
State Farm issued a statement Friday in response to Sun Herald questions about the legal activity: “The tornado that struck Oklahoma City in 1999 and Hurricane Katrina are two separate events,” the company said. “We handle claims individually and pay what we owe based on the contract with the policyholder.”
Marr is sharing information with Mississippi attorneys representing hundreds of State Farm policyholders whose homes Hurricane Katrina damaged or destroyed.
He also is sharing information with the Mississippi attorney general, who has convened the grand jury investigation, and with the U.S. Justice Department, which has launched a probe of its own.
In fact, Marr has announced to the world on his Web site, http://www.marrlawfirm.com., where to secure court records about State Farm.
State Farm attorneys have fought to keep employee testimony private in Oklahoma and Mississippi. In fact, at State Farm’s request, an Oklahoma judge has forbade further discussion of the case by Marr and the other attorneys. State Farm is using court protections and procedures, the company said, available to all parties in a lawsuit.
As cases in both states grind forward, more information comes to light.
Executives for the nation’s largest property and casualty insurer deny any intentional misconduct. They said the company worked with nationally recognized engineering firms to help determine what policyholders were owed in less than 2 percent of 84,000 Katrina claims in Mississippi.
In sworn testimony this summer in Oklahoma, company chairman and CEO Edward B. Rust Jr. said: “And that is ultimately my concern, also, is that we want to be fair with our customers. After all, the success of this organization is driven by our ability to retain current customers and to attract new customers. The last thing we want to do is be unfair with our customers.”
Rust has not testified in Mississippi, but Lecky King did. Her testimony in a federal lawsuit filed in Gulfport is under wraps on orders from U.S. Magistrate Judge Robert H. Walker. Attorneys can’t discuss what she did or did not say.
Two State Farm whistleblowers said, King and assistant Lisa Wachter were the only employees in the Coast office allowed to communicate with engineering firms the company used to help sort out what State Farm owed some policyholders after Katrina. Normally, the whistleblowers have said, State Farm adjusters communicated directly with engineering firms.
When a report blamed the covered peril of wind for damage, the whistleblowers said, King ordered another to show the culprit was water, covered by the federal flood insurance program. The company finally called a halt to the reports altogether, the whistleblowers said, because too many showed wind damage.
Joe Hollomon, once a federal prosecutor himself, said his clients, King and Wachter, had nothing to gain by denying claims and were here to help policyholders. In Oklahoma, King’s testimony is a matter of public record, but the attorneys are not allowed to hand it out.
Hollomon told Marr before the questions started: “Obviously, we’re, you know, that’s a matter of concern to myself and my client. She’s going to assert her constitutional privilege and, of course, the dissemination of that could obviously prejudice her if we one day find ourselves in front of a jury somewhere in Mississippi, so, you know, we’re very concerned about that.”
——
State Farm engineering reports
Below are engineering reports recently filed as part of the Oklahoma lawsuit:
Larry Lowe residence, Oklahoma City
May 24, 1999: Strum Engineering, Oklahoma City, hired by State Farm, concluded high winds racked the roof, causing rafters to separate from the ridge, which could lead to leaks from rain and eventually create safety issues. Repairs recommended.
June 11, 1999: State Farm asked Haag Engineering to examine the house. Haag concluded in a report issued July 21: “It is our opinion that the Love (sic) residence was not structurally damaged by wind, and the frame requires no repairs.”
Michael and Lisa Pole property, Oklahoma City
July 19, 1999: Strider Associates, hired by the Poles, found tornado damage to roof framing, decking and brick veneer, all requiring replacement.
July 27, 1999: A State Farm claims representative makes note of the Strider report and repairs recommended, then concluded, “I believe we should hire a structural engineer to inspect and provide us with their expert opinion.”
Aug. 18, 1999: Inspecting for State Farm,Haag Engineering concluded, “The primary structural system of the Pole residence had not been damaged by wind.” Wind damaged only a few roof shingles, the report says.
Terri Mullins property, Kiln, Miss.
Oct. 23, 2005: Forensic Analysis & Engineering Corp., hired by State Farm, concluded “the primary and predominant cause of damage to the subject property was due to hurricane force winds. This is based on the displacement of the house and the absence of water damage to the same.”
Jan. 3, 2006: A second Forensic Analysis report says wind caused “tree failures,” the cause of interior damage is undetermined and that “movement of the house across the street with “minimal obvious wind damage is consistent with a buoyant force applied to the building by rising water allowing the wind to blow the house northwards until it reached an obstruction.” (State Farm interprets its policies to say wind damage is not covered when water contributes.)
Thomas and Pamela McIntosh property, Biloxi
Oct. 12, 2005: Forensic Analysis & Engineering Corp. concluded roof, door, carport and window damage was caused by wind, along with interior damage. The report State Farm ordered included a sticky note on the first page that said, “Put in Wind file — DO NOT Pay Bill, DO NOT discuss.”
Oct. 20, 2005: Forensic concluded wind damaged shingles, along with the second story floor and first floor ceilings, but said “damage to first floor walls and floors appears to be predominately caused by rising water.”
State Farm issued the following statement Friday regarding its handling of policyholder claims. It reads, in part:
“The tornado that struck Oklahoma City in 1999 and Hurricane Katrina are two separate events. We handle claims individually and pay what we owe based on the contract with the policyholder.
“State Farm occasionally seeks the help of nationally recognized engineering firms to assist us in determining the cause of loss.
“Following last year’s hurricanes, we sought assistance from these firms in less than 2 percent of the 84,000 claims filed in Mississippi. Katrina was an unprecedented event and in a small number of claims there was more than one engineering report due to multiple reasons.
Goodbye insurance market. Goodbye a lot of money when the next big storm hits. Goodbye common sense from a lot of posters on this site. These cut and paste posters take a few problems out of millions of claims and make it seem a problem 100% of the time. I will say it again, there are profession posters on this site a lot lately. I was in Florida last week when the announcement came out and some of the people there are starting to realize the mess the government has caused. Wait till the next real storm to see what this mess will amount to. You cut and pasters just love chasing all the companies out of the state in favor of Citizens and underfunded start ups. Idiots.
“criminal” wrongdoings getting away completely Scott-free .TALLAHASSEE, Fla. (AP) — Gov. Charlie Crist said Tuesday if State Farm wants to pull out of the state’s property insurance market it should not be allowed to do any business in Florida.
Mutual OF Omaha pullout of NEW YORK REMMBER AND AT ONE TIME THEY WERE THE BIGGEST IN THE WORLD NOT SO TODAY. STATE FARM GET A 44% INCRESS AND STATE FARM DID NOT PAY FOR THINGS THEY SHOULD HAVE I DO NOT HAVE TO WAIT FOR THE NEXT STORM TO LOOK AT ALL OF THE BAD FAITH HISTORY THE INSURANCE INDUSTRY WANTS THE GOVERMENT TO STEP IN ALL THE TIME WITH EITHER MONEY OR MORE LAWS TO PROTECT THEM THAT MY FRIEND IS COMMON SENSE.
DVD and other records, Judge Richard G. Van Dyck told company attorneys
.Ok, less than 1 percent of the claims handled involve problems or issues. were did you get your numbers from?
State Farm has history of not releasing recordsBy Anita Lee McClatchy Newspapers In some cases, State Farm’s top leadership prefers not to share or even keep records that offer insight into how policyholder claims are handled, according to court records. Chairman and CEO Edward B. Rust Jr. said in sworn testimony earlier this month that no minutes are kept of quarterly meetings held by the company’s top management, the Chairman’s Council, and that policyholders have no right to information about an investigation State Farm Insurance Cos. has ordered of its relationship with Haag Engineering Co. State Farm spokesman Phil Supple said the company doesn’t “intend to-;try this-;case in the media.” “State Farm stands by testimony given by President and Vice Chairman Vince Trosino, who said when asked about these allegations, ‘It’s not part of our system. It’s not part of our core values. It’s not what made us the most successful property and casualty insurer, life insurer, in the country.'” Juries in two states, Texas and Oklahoma, have found Haag provided biased reports to State Farm to minimize or deny policyholder claims. Mississippi’s attorney general currently is conducting a grand jury investigation to determine whether State Farm and other insurers denied Hurricane Katrina claims through the use of fraudulent engineering reports. Haag denies bias, but State Farm suspended business with the company in June and ordered an independent investigation after an Oklahoma jury awarded a total of $13 million to a policyholder over tornado damages. Subsequent trials are set to determine damages for 70 other policyholders, all of whom had claims investigated by Haag. In past court cases, judges have chastised and even fined State Farm for withholding records the company was ordered to produce. Evidence the company destroyed documents has been presented in several cases. In the Oklahoma case, after State Farm finally turned over to the court a “claims legal research” DVD and other records, Judge Richard G. Van Dyck told company attorneys “As I was watching these tapes I just want to say this for the record, the hair on the back of my neck did — did stand up because I was seeing things there that early on in this case I was told by (State Farm) defense counsel didn’t exist and couldn’t be produced. So I’m not real happy with that and I want to remind all counsel that their ethical responsibilities as attorneys outweigh the wishes of their clients.” Gary T. Fye, an expert in the analysis of disputed insurance claims who lives in Nevada, often testifies in insurance cases. Fye, who said he has testified on behalf of policyholders and insurance companies, has provided the courts information on State Farm’s history of destroying and withholding records. In 1998, Fye wrote in a Florida case “I have been witnessing document destruction, concealment, and obstruction of discovery by State Farm for many years in connection with my review of internal claim practices documents of the insurer. I have accumulated certain Exhibits which show the company’s goals and objectives for document handling by its employees. The documents show close to 28 years of intentional destruction, concealment and distortion of claim practices records.” In some cases, company executives did not keep records. Jeff Marr, the attorney suing State Farm in Oklahoma, took sworn testimony Sept. 6 from Rust. Topics included Rust’s Chairman’s Council, made up of top State Farm executives. The group, which includes the company’s general counsel, meets quarterly. Marr was fishing for records of those meetings that he could subpoena for his lawsuit. “Certainly,” Marr asked Rust, “you keep records of the quarterly meetings where the entire Chairman’s Council is present?” “We have an agenda,” Rust said, “but minutes in that, no.” “Why not?” Marr asked. Rust replied, “Never felt a need to.” Marr later asked, “Are there any written agendas that are available should I choose to request them in the lawsuit?” “I’m not sure what might be available,” Rust said. Rust also said policyholders, who essentially own the private mutual company, are not entitled to know what the Chairman’s Council discusses or decides about litigation against State Farm, citing attorney-client privilege. Marr questioned why the company would withhold information from policyholders, who own State Farm. “Well, again,” said Rust (who has a law degree), “I’m not an expert in the area, but I think as you find — even if I’m a shareholder in a publicly traded company, there are things that are not — you know, I do not have access to.” Marr later asked if policyholders have a right to see documents from State Farm’s investigation of Haag. “No,” Rust said. “Why not?” Marr asked. “Is it privileged?” Rust said, “I believe so.” The Sun Herald (Biloxi, Miss
In Utah, the company was fine $25 million in punitive damages, in part for the “systematic destruction of documents and systematic manipulation of individual claim files to conceal claim mishandling”. An Idaho appeals court fined the company $9.5 million in punitive damages for making use of “a completely bogus” outside bill review company that helped lower the cost of medical bills- THIS GOES ON AND ON! Millions AFTER Millions! WHAT A WASTE. AND TO THINK THE PEOPLE WE PAY FOR ALL THIS WASTE SPENT THE MONEY ON ADS FOR THE SUPER BOWL AND WHO SPENT 450 MILLON DOLLARS ON THE MOVIE “CARS” AND THEN THE BIG WAGES FOR ED RUST, JR CEO OF STATE FARM. JUST GO TO ANY SPORTS VENUE AND YOU WILL SEE STATE FARM HAS PAID Millions AND Millions OF THEIR COSTOMERS MONEY TO MAKE US ALL THINK THAT THEY CARE WHEN IN FACT THE CONSUMER IS THE LAST TO GET A PIECE OF THE PIE THAT THEY PAY FOR. THIS IS NOT WORKING ANY MORE.
State Farm Hit With Civil RICO Claim Over Sham Medical Exams
State Farm has been sued for racketeering in New York with a claim that it conspired with “Independent Medical Exam” companies and medical practitioners to produce fraudulent and sham medical reports. The suit, filed January 30th in the Eastern District of New York, is brought under the Racketeer Influenced Corrupt Organization Act (RICO). (This story has been previously reported.
State Farm opens and closes around 25,000 claims EVERY DAY. Their pattern and practice satisfies over 99% of these claims without a problem. Ok, less than 1 percent of the claims handled involve problems or issues. With that, even that one percent of problem claims involved, that is still a large number of raw problem claims. These are the ones that are splashed on the front of the newspaper and spread over the nightly news. All that I am saying is don’t discount the companies efforts, they still satisfy 99 % of the people ALL of the time.
Next Sunday State Farm is the sponsor of the NFL’s Pro Bowl. Once they pull out of Florida and rid themselves of the financial drain, they will sponsor the whole Super Bowl!!!
Well said, nobody important. In spite of the many mindless postings accusing State Farm of being greedy and crooked, they seemed to have found a way to convince Floridians to purchase in excess of 1,000,000 policies.
The bottom line is State Farm is losing money in Florida and the state will not approve higher rates necessary to stop the bleeding. State Farm is simply making a legitimate business decision to stop losing money.
Individuals and competitors are already crying foul, though, for some reason. If State Farm is so bad, then Floridians and competitors should be elated with the announcment of their departure. For some reason, I am not seeing the widespread glee I would expect after reading the State Farm horror stories in Insurance Journal postings and other publications.
Simply put, State Farm writes a significant amount of property in Florida most carriers are not interested in, especially at the price offered by State Farm. Floridians and their state government will reap what they have sewn the next time the wind blows….count on it.
Sorry Charlie, You rolled snake eyes this time with your playing politics. State farm is the 600 pound Gorilla that you just agrivated. Look for Charlie to come running back to State Farm and give them what ever they want to stay. He and his puppet Kevin McCarty(FL Ins Commish) Will soon figure out that insurance is a private sector business that needs to earn a profit, unlike the way they are running (ruining) our state. It will be laughable to see them squirm when 1.2 million people start sending emails to Charlie Crist’s office.
million in punitive damages, in part for the “systematic destruction of documents and systematic manipulation of individual claim files to conceal claim mishandling”. WAGES FOR ED RUST, JR CEO OF STATE FARM. JUST GO TO ANY SPORTS VENUE AND YOU WILL SEE STATE FARM HAS PAID Millions AND Millions OF THEIR COSTOMERS MONEY TO MAKE US ALL THINK THAT THEY CARE WHEN IN FACT THE CONSUMER IS THE LAST TO GET A PIECE OF THE PIE THAT THEY PAY FOR. THIS IS NOT WORKING ANY MORE.
and knuckleheads here complain about 99% plus customer satisfaction that State Farm enjoys. Where to find the statistics? JD Powers, Consumer reports, ANY INDEPENDENT ANALYSIS.
I can only conclude that the attorneys who post here with such silly, uneducated opinions have lost in court to State Farm or have been unable to purchase insurance from State Farm.
What is your end game, evil attorneys?
No choice for anyone? Government insurance for all?
Ben Stein has it right in his book ‘How to wreck America’.
For those attorney who posses enough intellect to actually read something.
Now, now, Gill Fin. We cannot allow facts or minor details to get in the way of those wanting to make a point or take a stand against some evil company or non-government entity.
pressuring its engineers to alter reports on storm-damaged homes so that water, not wind, could be blamed for damage.
Is it ethical for State Farm to do this to customer ?What will the State do with that information?
Let’s see, if we only write business in areas where we have no risk of paying claims. What a novel way to make money.And has been sued racketeering Is it ethical for State Farm to do this to customer?
She would not tell the attorney why State Farm ordered a second damage report on property when the first showed a policyholder’s losses were covered. Nor was she willing to discuss why State Farm went with that second report, finding little or no covered damage.
Oct. 12, 2005: Forensic Analysis & Engineering Corp. concluded roof, door, carport and window damage was caused by wind, along with interior damage. The report State Farm ordered included a sticky note on the first page that said, “Put in Wind file — DO NOT Pay Bill, DO NOT discuss.” is this ethics journalists maybe you should ask Patricia Harned at the ethics resource she is the President ask her about the code of ethics.202-872-4771
Your response must have some meaning, but I can’t figure out what it is. You might want to read these before posting them. Why is it such a big deal to all of you State Farm haters if they pull out if they are so evil? Why were so many people taken in by their evilness to buy their policies at what you say are outrageous rates? Why does such a low percentage of complaints with the insurance department exist? Because you are lying morons! I just can’t understand why you keep posting the same lying drivel.
She would not tell the attorney why State Farm ordered a second damage report on property when the first showed a policyholder’s losses were covered. Nor was she willing to discuss why State Farm went with that second report, finding little or no covered damage.
Oct. 12, 2005: Forensic Analysis & Engineering Corp. concluded roof, door, carport and window damage was caused by wind, along with interior damage. The report State Farm ordered included a sticky note on the first page that said, “Put in Wind file — DO NOT Pay Bill, DO NOT discuss.” is this ethics journalists maybe you should ask Patricia Harned at the ethics resource she is the President ask her about the code of ethics.202-872-4771
BLOOMINGTON — State Farm Insurance Cos. rewarded its leader with an 82 percent pay raise after profits hit an all-time high last year.
State Farm reported a record $5.32 billion profit in 2006, up from $3.24 billion in 2005, and the insurer’s net worth grew nearly 16 percent to $58.1 billion.
Rust, meanwhile, made $11.66 million last year, including a $9.89 million bonus. That’s a $5.26 million bump from his 2005 income of $6.4 million.
State Farm already settled a class-action suit in Mississippi for a reported $80 million. It settled several other Katrina disputes out of court for an undisclosed sum also, but more lawsuits linger. If the current settlement trend continues, not many will make it to a jury.
The financial impacts of these suits aren’t too severe to State Farm, but Rust said the outcomes could impact the prices and availability of insurance.
Rust continues to evaluate risk by region, showing willingness to refuse service if the cost is too high.
“Frankly we have not written anything along the water in Florida since (1992),” Rust said.
nobody important. Put in Wind file — DO NOT Pay Bill, DO NOT discuss.” is this ethics journalists how about it nobody important??? Why will you not answer the question is this ethics .
You don’t post questions, you post cut and paste complaints. Complaints are filed all the time. That doesn’t make all the company evil. Answer my question, why is the percentage of complaints for this evil company so low? Because out of millions of transactions, there will always be either valid or invalid complaints. Can’t satisfy everyone. My ethics are above board, at least I don’t cut and paste the same old garbage responding to every article. At least I don’t get paid to post nonsense. State Farm is a huge part of the Florida market. Why if they are so bad and so overpriced? Because they aren’t bad or overpriced. I wish you could take the time to learn about why the insurance market is such a mess in Florida. That would take effort and expertise and you are exercising neither.
”State Farm haters if they pull out if they are so evil”? PULL ALL THE WHY OUT EVERYTHING NO MORE STATE FARM IN FLORIDA PERIOD NO CHERRY PICKING THAT IS THEY WAY IT NEEDS TO BE. AS FOR YOUR WORDS ABOUT lying morons THE TRUTH WILL NOT STAY SILENT ANYMORE. YOUR WORDS AGAIN Why were so many people taken in by their evilness to buy their policies at what you say are outrageous rates? IS COMMON SENSE STATE FARM SPENTS BILLIONS TELL THE CONSUMER WHAT A GREAT NEIGHBOR THEY ARE. THEY DO NOT TELL THEM ALL THE CHARGES THAT HAVE BEEN UPHELD IN THE COURTS IN FACT THEY SPENDS MILLONS TO HAVE ATTORSIES HIDE THIS FROM THE PUBLIC. AS FOR outrageous rates WHY WOULD IT MATTER IF ITS CHEAP IF ITS NO GOOD?
Nobody Important – As I have said before, logic and facts mean nothing to many of the IJ posters whether they be professional posters and/or uninformed.
It appears their aim is to simply stir the pot with nonsense and, possibly, annoy the heck out of those of us who prefer a more cerebral approach to discussions.
I think this particular thread has run its course, so I’m going to extricate myself from it. Take my advice and do the same
Buckeye. Put in Wind file — DO NOT Pay Bill, DO NOT discuss.” is this ethics journalists how about it nobody important AND Buckeye??? Why will you not answer the question is this ethics .
BAD IS STATE FARM ALL THAT MONEY WHY DON’T EVERYONE AND THE WAKE UP FOR YEARS THE TRUTH WON’T HIDE THEN YOU’LL SEE. IF YOU THINK THEN YOUR WRONG AND THE INETHICAL WILL BE JUDGED ONE DAY?? HOW COME DONT THE BAILOUT TREATING SHOULD BE ASHAMED. IF SOCIALISM IS SO BAD WHY DO EVERYONE USE MYSPACE? IT IS A STATISTICAL FACT THAT 95% OF THE PEOPLE WHO USE ALL CAPS WHEN POSTING COMMENTS MEET THE LEGAL DEFINITION OF MENTAL RETARDATION, THEREFORE ARE ON DISABILITY AND HAVE THE TIME TO CUT AND PASTE IRRELAVENT INFORMATION THAT THE REST OF US HAVE TO SCROLL THROUGH TO LOOK FOR ORIGINAL THOUGHT.
Buckeye, you are on target. The idiots have taken over this site entirely. I will retire from this thread. No amount of argument or fact is of any importance to them since they have either a massive hate going or they are simply being paid to post this garbage. I just hate letting these hypocrites have the last word. Cut and paste away idiots.
COME ON JUST ANSWER THE QUESTION ABOUT STATE FARM ETHICS. YOU DO NOT HAVE TO RUN FROM THIS? simply being paid to post NO WRONG IT JUST TIME TO WAKE UP.
Looks like goverment shot themselves in the foot again. Wait till the next big storm season and see how these bureaucrates have helped the people of Florida expand their choices. If State Farm can not make it work my guess is the Florida insurance market is not as strong as the commissioner is making it sound!
For those of you that claim State Farm Florida is making money, read the following excerpt from that article
****
Insurers’ profits stem from two areas: underwriting property; and investing the money they get from policyholders. The financial meltdown has eliminated their investment income. Now, as State Farm sees it, intrusive Florida politicians and bureaucrats have made it nearly impossible to make money from underwriting, their other income source.
“When markets are doing well, there’s more opportunity to get investment returns. When markets are bad, there is no cushion at all,” Ferguson said. “If they can’t make money underwriting, then where is the income?”
State Farm Florida president Jim Thompson said the firm loses $20 million a month on its property business, paying out $1.21 for every dollar coming in.
“When you look at our financial situation, we have no alternative,” Thompson said. “We’re going to be out of this business. We will not have the resources to pay claims.”
****
This company is paying out more then they are taking in on a monthly basis. This is NOT a way to run a business and make money. With this info in front of us, is it truely a suprise that the company has decided to pull out? I think that they are making the only good choice that they have available now.
THIS the sort of thing that the Insurance Department should take into consideration for when a request for a rate increase is filed. Yet all requests for such were denied flat without even a comprimise solution/minimal increase that would allow the company to at least break even and maintain their financial obligations.
A lot of companies got rate increases since 2004, and some healthy ones too, right up until election year in 2006. Citizens has been on a rate freeze for the third year now and that is the primary cause of the adequate rate issue in Florida. They should give State Farm their requested increase so that they don’t leave the state. If they leave, there is a small shield of property insurers for a hurricane to pierce before the state begins to pay claims, FIGA claims and Cat Fund claims, and then the state can declare bankruptcy!
To the idiot that keeps posting info on STATE FARM (parent company), not STATE FARM FLORIDA.
Those are TWO seperate companies and the profits that State Farm (the parent company) does NOT reflect/represent the income of STATE FARM FLORIDA. SF Florida is LOSING money each month. (refer to my prior post) What you are posting is like saying that GMAC Insurance (which is earning money) is the same as GM Auto Manufacturers(which are losing money). They are two TOTALLY separate entities.
BTW
To the idiot posting that claim of ethics violations.. Was that one of those handled by now disbarred and imprisioned attorney Richard “Dickie” Scruggs? Please cite your sources next time and the particular lawsuit that was part of.
pressuring its engineers to alter reports on storm-damaged homes so that water, not wind, could be blamed for damage.
Is it ethical for State Farm to do this to customer ?What will the State do with that information?
Let’s see, if we only write business in areas where we have no risk of paying claims. What a novel way to make money.And has been sued racketeering Is it ethical for State Farm to do this to customer?
I have been a customer and have used no other insurance company for over 45 years and have never yet to date placed a claim against home owners also I have been accident free for the last 30+ years .. it is a shame but I will cancel ALL my state farm policies over this
OK, I’ve read enough of the yea’s and nay’s against SF Florida withdrawing from the state and think that, to the consumer out there, you need to arm yourself on the “start up companines” willing to take your business from SF. Check the insurance rating companies BEFORE you are so eager to switch. (one company is giving ALL companies an A rating…unfairly). The OIR decision has not been handed down, and every Homeowner has 6 months prior to their renewal to receive their notice and the exact date of the non-renewal and will have plenty of time get sound advice from their SF agency.
If you haven’t heard from your agents, call them. The offices are responding to 9+ hours of phone calls per day among 3-4 (sometimes more) staff people and the agent. The agents and staff haven’t forgotten that “good neighbor promise”, all though the sky is falling around them. They are there for you still, to calm you, listen to your “hate philosopy” on the company they have devoted their careers to, trying to give you updates and guidance on the situation, while at the same time, wondering if they’ll be in the unemployment lines when the non-renewals start happening.
The agents offices are working in the same capacity with long hours, calls and concerns for the Policyholders as when the triplets (charley, jeanne and frances) hit the state.
So now, when the time has come for SF Florida to take a stand after years of fights with the OIR for insurance reform, to get rates reduced, to change how insurance in Florida is written…you scoff at them and think it’s time for a mutiny! (did you feel that way when your agent wrote you a check, on the spot, no questions asked…in 2004?)
If you’re keeping up with the media frenzy, then you have the mindset that SF Florida is doing this withdraw to benefit the company, and has no regard for the policyholder. You’re not giving your agent (or Susan, Lisa, Linda….etc, those “girls in the office”) that you have a relationship with, half the chance to follow thru with that “promise” they’re so committed to.
A business can’t continue to lose money (and the state can’t MAKE a company stay if they are losing money) and keep that “promise” to pay on the claims filed. SF Florida would be no better than the companies that shut their doors after Andrew. So instead, a pro-active approach is being taken with the withdraw.
Do you really think SF Florida wants to withdraw? Do you think the agents want to lose their businesses that, the majority, have put 20+ years into? Do you think they enjoy cutting hours? Pay? Laying employees off? NO ONE wants this withdraw to happen except those who insist that SF Florida is trying to hurt them by this decision, stating they have had no claims, no tickets or accidents….well, I’m among the “claimless” also, and am insured with SF Florida as well.
I work in a SF agency. I live this everyday… and yes, I wonder if my future is unemployment. My pay has been cut, and hours have been reduced to keep everyone else in the office employed. I go to work everyday with a smile, treat everyone fairly and with consideration, biting my tongue at the bad language and bad press I hear on the phone everyday. I’m keeping my Good Neighbor Promise because that’s what I signed up for.
How many of you would do the same?
Since you are a State Farm agent, perhaps you can confirm this story I read. Is it true that, if I (a State Farm home owner’s policy holder) go to you for help finding new insurance, you are obligated to send me to Citizens?
We aren’t obligated to send you to any insurance company. You own the home, you make the decision. We’re here to help you make that decision.
And on that note… if your home is insured with a company that claims insolvency at the time of a CAT loss, the FHCF (Florida Hurricane Cat Fund) is in a deficit already…who’s picking up the bill to repair/rebuild your home?
Time to question McCarty and Charlie on that one.
The “big 3” won’t be around to pick up the tab as was the case with Andrew.
If anyone is thinking about pulling their car insurance from SF, I would like to say that I have been insured with AMICA for many years and have gotten excellent service. Thumbs up to them (even though I can’t insure my home through them).
i have not worked for state farm long (thus i have no real “loyalty” to say) however i have worked in the insurance industry for years. the sad thing is that most people do not understand what this means for the state of florida. if things do not change, we are all unfortunately, going to be in a position of self- insuring. the state of florida is not in a good position. there are too many insurers who are insolvent & can’t pay out claims & if the companies that manage themselves are all forced to leave then we are stuck with citizens (state insurance) who has to sell their policies to other carriers because they can’t handle the capacity either- and they certainly could not take on the number of policies state farm alone has.
although i am not a state farm “customer” i would encourage you to at least wait until it is known what will happen. if you leave, i also encourage you to at least ensure you are getting sufficient coverage. what is the point of paying for insurance if, in the event of a catastrophic loss, it does not indemnify?
make sure you have endorsements (which do cost additional money but are necessary if you do not have funds to rebuild/ repair yourself) such as personal property replacement cost, mold/ fungus, theft, and i would also encourage at least $300,000 in liability (it is typically less than $50 a year to have $300 vs $100).
i only attempt to educate as i have been through some life altering experiences myself and feel it necessary. i know before i worked in insurance it was a “foreign” language.
Got a letter from State Farm saying my police has been selected for renewal. So I have to get insurance elsewhere. Anyone know who is still writing policies? One thing in the letter that bothers me: (Re: State Farm and OIR settlement) “The settlement requires (???) State Farm to nonrenew 125,000 polices throughout the state.”
There are many other insurance companies serving Florida, that are willing to insure your properties with Wind, keep in mind that Florida insurance Guarantee Association protect your property up to $300,000 in case the company went of business, for more details about Homeowners insurance Florida, go to https://floridainsurance.ws/personal-insurance/homeowners-insurance-florida/
GTPILAW, Obviously you believe that this statement means they should continue on in Florida as a non-profit. I live in Florida, am insured by SF, and undoubtably will be searching for new coverage. I only have a single question. When did it become such a horrible offense to society that a buisness be “for profit”. I have had nothing but the best of service from SF. But now, because this country has forgotten that everything we want is not necessarily a right, SF is expected to provide for Floridians until the company completely collapses. A simple spelling lesson for America: PROFIT is not a 4-letter word.
What happened to the Magic Wand they have in Florida? Wave it and all is well and profitable, insure a million dollar property for $100 a year. Sure you can make a profit doing that!
Let State Farm raise their rates. If they are too high they lose good business to the competitive domestics and they are left with the cr*p that causes loss.
If they are not too high, the business stays. What in the world is so hard to understand about how this? And I don’t have a reason to particularly like State Farm!
The business model can be reduced to a simple equation: Profit = earned premium + investment income – incurred loss – underwriting expenses.
Insurers make money in two ways: (1) through underwriting, the process by which insurers select the risks to insure and decide how much in premiums to charge for accepting those risks and (2) by investing the premiums they collect from insured parties.
The most complicated aspect of the insurance business is the underwriting of policies. Using a wide assortment of data, insurers predict the likelihood that a claim will be made against their policies and price products accordingly. To this end, insurers use actuarial science to quantify the risks they are willing to assume and the premium they will charge to assume them. Data is analyzed to fairly accurately project the rate of future claims based on a given risk. Actuarial science uses statistics and probability to analyze the risks associated with the range of perils covered, and these scientific principles are used to determine an insurer’s overall exposure. Upon termination of a given policy, the amount of premium collected and the investment gains thereon minus the amount paid out in claims is the insurer’s underwriting profit on that policy. Of course, from the insurer’s perspective, some policies are winners (i.e., the insurer pays out less in claims and expenses than it receives in premiums and investment income) and some are losers (i.e., the insurer pays out more in claims and expenses than it receives in premiums and investment income).
An insurer’s underwriting performance is measured in its combined ratio. The loss ratio (incurred losses and loss-adjustment expenses divided by net earned premium) is added to the expense ratio (underwriting expenses divided by net premium written) to determine the company’s combined ratio. The combined ratio is a reflection of the company’s overall underwriting profitability. A combined ratio of less than 100 percent indicates underwriting profitability, while anything over 100 indicates an underwriting loss.
Insurance companies also earn investment profits on “float”. “Float” or available reserve is the amount of money, at hand at any given moment, that an insurer has collected in insurance premiums but has not been paid out in claims. Insurers start investing insurance premiums as soon as they are collected and continue to earn interest on them until claims are paid out.
SO THERE YOU GO!
I’ve been off the boards for a while, but it seems clear that GTPILAW is following one of two career paths, law or politics. This is obvious because his post is clearly factually correct, most likely copied and pasted from elsewhere, and while entirely accurate, makes absolutely no point whatsoever. The ALL CAPS at the end makes me think that, between law and politics, he studied the former.
State Farms agents have nothing to cry over. Greed got to the best of them. They reinsured the homeowners with their auto insurance company. The got sued for not providing the proper credits, haven’t paid a divident in years. Haven’t hired new agents in a year. The agency force are dying dinosaurs.
GOOD RIDDANCE AND FIRE YOUR STATE FARM AGENT
Clearly GTPILAW, you have a much better understanding of the insurance industry than I do. That I will gladly concede. However, while investment is a large source of revenue for insurance companies, the fact still remains that when the losses from claims cut into those revenues, SF or any other company has the right as a for profit company to pick up their toys and go home. Obviously goodwill is a consideration when a company makes a decision with the ramifications that this one will have. But if the bottom line is not there, goodwill only goes so far. The whole thing comes down to profit. The same profit that employs or otherwise supports a whole lot of people. Free market forces will correct the ills in Florida (if the gubment will stay the @#%^ out of it). The end result will be substantially higher homeowners insurance rates. I don’t want to pay it, but that is the cost of living where the wind blows. Same should apply to California, Louisianna, etc. If my property is the risky one, I should be paying the high premiums. Don’t tell my wife I said that.
ONE THING STATE FARM FORGETS TO TELL ALL OF YOU IS THAT IN FLORIDA WHEN THE WIND HIT HOMES PEOPLE WERE COVERED, BUT STATE FARM JUST DECIDED IT WAS ALL WATER SO NO CLAIMS WERE PAID. THEN THEY CRIED TO THE GOVERNMENT TO COVER ALL FLOODS AND HAVE PASSED LAWS SO THE GOVERNMENT WILL COVER WIND DAMAGE AS WELL. I SAY IF YOU TAKE ALL THE BILLONS IN PREMIUM AND THEN CONVENIENTLY DO NOT COVER ANYTHING—WHAT A RACKET. STATE FARM MUST STOP HIDING THE TRUTH BY SEALING RECORDS IN OUR COURT ROOMS. THIS BIG GIANT HAS SCREWED THE AMERICAN PEOPLE FOR TO DARN LONG. WE SAY PLEASE LEAVE ALL 50 STATES MY GOOD NEIGHBOR, AND TAKE YOUR BS COMMERCIAL OFF THE AIR. I THINK ITS HIGH TIME THE ETHICS BOARD OPENED UP THEIR EYES AND TAKE A CLOSE LOOK AT STATE FARM AND ANY INDUSTRY THAT CAN RAPE PEOPLE AT THE LOWEST TIMES OF THERE LIFE AND THE LITTLE JUNIOR OF A CEO ED RUST WHO HAS TAKEN A GREAT COMPANY THAT HIS GREAT GRANDFATHER STARTED AND TURNED IT INTO HIS LITTLE BANK. WAKE UP PEOPLE AND LOOK AT THE HISTORY. I DID NOT MAKE IT UP. I WISH THAT I DID NOT KNOW THE TRUTH, BUT I DO SO I AM TRYING TO TELL YOU. I HOPE WITH ALL HOPE AND THE LOVE OF THIS GREAT AMERICA SOMEONE ELSE MAY CARE.
: @ ELSE MAY CARE.
Posted On: January 27, 2009, 9:04 pm CST
Posted By: profits over its own policyhol
Comment:
Study reveals worst insurers
By ANITA LEE
— Allstate is the nation’s worst insurance company for consumers, an association of lawyers who sue big business concludes in a report released Wednesday.
“The rankings show a distinct pattern of insurance industry greed amongst 10 companies that refuse to pay just claims, employ hardball tactics against policyholders, reward executives with extravagant salaries, and raise premiums while hoarding excessive profits,” the American Association for Justice concludes.
Researchers spent six months compiling information from court documents, SEC and FBI records, state insurance department investigations and complaints, nationwide news accounts, and testimony of former insurance agents and adjusters.
“We’re not surprised we’re being targeted by the trial and personal injury lawyers because Allstate has been at the forefront of the fight against insurance fraud and the effort to resist unreasonable demands made by lawyers,” Allstate spokesman Michael Siemienas said Wednesday.
The AAJ says the U.S. insurance industry collects more than $1 trillion in premiums annually, and has $3.8 trillion in assets, surpassing the Gross Domestic Products of all countries but the United States and Japan.
Robert Hartwig of the industry-sponsored Insurance Information Institute said consumers should consider the source: litigious attorneys who help drive up insurance costs. He also said the industry has paid out nearly $300 billion to tens of millions of policyholders across the country over the past 20 years.
The top 5 offenders on the list:
1. ALLSTATE – CEO, Thomas Wilson; 2007 compensation, $10.7 million; 2007 profits, $4.6 billion; assets: $156.4 billion. “According to investigations and documents Allstate was forced to make public, the company systematically placed profits over its own policyholders… The amount Allstate paid in claims dropped from 79 percent of its premium income in 1996 to just 58 percent 10 years later. In auto claims, payouts dropped from 63 percent to just 47 percent.
2. UNUM – CEO, Thomas Watjen; 2007 compensation, $7.3 million; 2007 profits, $679 million; assets, $52.4 billion. “Unum, one of the nation’s leading disability insurers, has long had a reputation for unfairly denying and delaying claims..”
3. AIG – CEO, Robert Willumstad; 2007 compensation for former CEO, 14.3 million; 2007 profits: $6.2 billion; assets, $1.06 trillion; “AIG executives have also come under fire for opportunistically seeking price increases during catastrophes. Now the company has been labeled ‘the new Enron’ because of charges of multibillion-dollar corporate fraud.”
4. STATE FARM – CEO: Edward B. Rust Jr.; 2007 compensation, $11.7 million; 2007 profits: $5.5 billion; assets, $181.4 billion. “In many cases, the company has gone to extreme lengths to avoid paying claims, including forging signatures on earthquake waivers after the deadly Northridge earthquake, and altering engineering reports regarding damage after Hurricane Katrina.”
5. CONSECO – CEO, C. James Prieur; 2007 compensation: $2.6 million; 2007 profits: $179.9 million; assets: $33.5 billion. “Conseco sells long-term-care policies, typically to the elderly. Unfortunately, Conseco uses the deteriorating health of its policyholders to its advantage because the company knows if it waits long enough to pay out claims, its customers will die
Juries in two states, Texas and Oklahoma, have found Haag provided biased reports to State Farm to minimize or deny policyholder claims.
4. STATE FARM – CEO: Edward B. Rust Jr.; 2007 compensation, $11.7 million; 2007 profits: $5.5 billion; assets, $181.4 billion. “In many cases, the company has gone to extreme lengths to avoid paying claims, including forging signatures on earthquake waivers after the deadly Northridge earthquake, and altering engineering reports regarding damage after Hurricane Katrina.”
HEADLINE:State Farm Claims Actions Under Fire: Use of Biased Reporting Found
By Anita Lee, The Sun Herald, Biloxi, Miss.
Nov. 16–As instructed, State Farm catastrophe manager Alexis “Lecky” King refused to answer questions an Oklahoma attorney fired at her for one hour and 10 minutes.
Instead, she repeated the same phrase 87 times: “Because of the ongoing state and federal investigation, on advice of counsel, at this time, I must invoke my constitutional right to remain silent.”
She would not tell the attorney why State Farm ordered a second damage report on property when the first showed a policyholder’s losses were covered. Nor was she willing to discuss why State Farm went with that second report, finding little or no covered damage.
It happened after an Oklahoma tornado and, records show, on the Mississippi Coast after Hurricane Katrina.
“Do you believe as a team manager — catastrophe team manager — that you owe any of either the policyholders in Oklahoma who endured their catastrophe of May 1999 or the policyholders who suffered losses in Katrina any type of apology?” asked the Oklahoma policyholders’ attorney, Jeff D. Marr.
Same answer.
“Can you tell myself and this jury what it will take, what the next jury in January, or any juries down in the Gulf Coast states need to do in order to ensure that State Farm stops this kind of behavior?” Marr asked.
State Farm’s attorney objected to the question.
It didn’t matter. King feared answers might incriminate her because she is the target of a state grand jury investigation in Mississippi regarding the insurance industry’s claims practices after Katrina. She was even unwilling to say what route she took to reach the Nov. 3 meeting in Pensacola, Fla., where she lives.
The Oklahoma Supreme Court compelled King, along with State Farm executives from Bloomington, Ill., headquarters, to submit under oath to Marr’s questions.
An Oklahoma jury in May found that State Farm “recklessly disregarded” its duty to deal fairly with policyholders, doing so “intentionally and with malice” through the use of biased expert opinions after the 1999 tornado. The tornado, one of many to strike May 3, 1999, reached a strength of F5, the most catastrophic on the Fujita scale.
As a result, the first of Marr’s tornado clients collected $13 million in damages. Marr hopes to show State Farm’s behavior continued in Mississippi. By doing so, he could secure higher damages for 70 more members of his class-action lawsuit in Oklahoma.
State Farm issued a statement Friday in response to Sun Herald questions about the legal activity: “The tornado that struck Oklahoma City in 1999 and Hurricane Katrina are two separate events,” the company said. “We handle claims individually and pay what we owe based on the contract with the policyholder.”
Marr is sharing information with Mississippi attorneys representing hundreds of State Farm policyholders whose homes Hurricane Katrina damaged or destroyed.
He also is sharing information with the Mississippi attorney general, who has convened the grand jury investigation, and with the U.S. Justice Department, which has launched a probe of its own.
In fact, Marr has announced to the world on his Web site, http://www.marrlawfirm.com., where to secure court records about State Farm.
State Farm attorneys have fought to keep employee testimony private in Oklahoma and Mississippi. In fact, at State Farm’s request, an Oklahoma judge has forbade further discussion of the case by Marr and the other attorneys. State Farm is using court protections and procedures, the company said, available to all parties in a lawsuit.
As cases in both states grind forward, more information comes to light.
Executives for the nation’s largest property and casualty insurer deny any intentional misconduct. They said the company worked with nationally recognized engineering firms to help determine what policyholders were owed in less than 2 percent of 84,000 Katrina claims in Mississippi.
In sworn testimony this summer in Oklahoma, company chairman and CEO Edward B. Rust Jr. said: “And that is ultimately my concern, also, is that we want to be fair with our customers. After all, the success of this organization is driven by our ability to retain current customers and to attract new customers. The last thing we want to do is be unfair with our customers.”
Rust has not testified in Mississippi, but Lecky King did. Her testimony in a federal lawsuit filed in Gulfport is under wraps on orders from U.S. Magistrate Judge Robert H. Walker. Attorneys can’t discuss what she did or did not say.
Two State Farm whistleblowers said, King and assistant Lisa Wachter were the only employees in the Coast office allowed to communicate with engineering firms the company used to help sort out what State Farm owed some policyholders after Katrina. Normally, the whistleblowers have said, State Farm adjusters communicated directly with engineering firms.
When a report blamed the covered peril of wind for damage, the whistleblowers said, King ordered another to show the culprit was water, covered by the federal flood insurance program. The company finally called a halt to the reports altogether, the whistleblowers said, because too many showed wind damage.
Joe Hollomon, once a federal prosecutor himself, said his clients, King and Wachter, had nothing to gain by denying claims and were here to help policyholders. In Oklahoma, King’s testimony is a matter of public record, but the attorneys are not allowed to hand it out.
Hollomon told Marr before the questions started: “Obviously, we’re, you know, that’s a matter of concern to myself and my client. She’s going to assert her constitutional privilege and, of course, the dissemination of that could obviously prejudice her if we one day find ourselves in front of a jury somewhere in Mississippi, so, you know, we’re very concerned about that.”
——
State Farm engineering reports
Below are engineering reports recently filed as part of the Oklahoma lawsuit:
Larry Lowe residence, Oklahoma City
May 24, 1999: Strum Engineering, Oklahoma City, hired by State Farm, concluded high winds racked the roof, causing rafters to separate from the ridge, which could lead to leaks from rain and eventually create safety issues. Repairs recommended.
June 11, 1999: State Farm asked Haag Engineering to examine the house. Haag concluded in a report issued July 21: “It is our opinion that the Love (sic) residence was not structurally damaged by wind, and the frame requires no repairs.”
Michael and Lisa Pole property, Oklahoma City
July 19, 1999: Strider Associates, hired by the Poles, found tornado damage to roof framing, decking and brick veneer, all requiring replacement.
July 27, 1999: A State Farm claims representative makes note of the Strider report and repairs recommended, then concluded, “I believe we should hire a structural engineer to inspect and provide us with their expert opinion.”
Aug. 18, 1999: Inspecting for State Farm,Haag Engineering concluded, “The primary structural system of the Pole residence had not been damaged by wind.” Wind damaged only a few roof shingles, the report says.
Terri Mullins property, Kiln, Miss.
Oct. 23, 2005: Forensic Analysis & Engineering Corp., hired by State Farm, concluded “the primary and predominant cause of damage to the subject property was due to hurricane force winds. This is based on the displacement of the house and the absence of water damage to the same.”
Jan. 3, 2006: A second Forensic Analysis report says wind caused “tree failures,” the cause of interior damage is undetermined and that “movement of the house across the street with “minimal obvious wind damage is consistent with a buoyant force applied to the building by rising water allowing the wind to blow the house northwards until it reached an obstruction.” (State Farm interprets its policies to say wind damage is not covered when water contributes.)
Thomas and Pamela McIntosh property, Biloxi
Oct. 12, 2005: Forensic Analysis & Engineering Corp. concluded roof, door, carport and window damage was caused by wind, along with interior damage. The report State Farm ordered included a sticky note on the first page that said, “Put in Wind file — DO NOT Pay Bill, DO NOT discuss.”
Oct. 20, 2005: Forensic concluded wind damaged shingles, along with the second story floor and first floor ceilings, but said “damage to first floor walls and floors appears to be predominately caused by rising water.”
State Farm issued the following statement Friday regarding its handling of policyholder claims. It reads, in part:
“The tornado that struck Oklahoma City in 1999 and Hurricane Katrina are two separate events. We handle claims individually and pay what we owe based on the contract with the policyholder.
“State Farm occasionally seeks the help of nationally recognized engineering firms to assist us in determining the cause of loss.
“Following last year’s hurricanes, we sought assistance from these firms in less than 2 percent of the 84,000 claims filed in Mississippi. Katrina was an unprecedented event and in a small number of claims there was more than one engineering report due to multiple reasons.
“Our intent was to seek assistance to help us settle claims with our policyholders.”
—–
Copyright (c) 2006, The Sun Herald, Biloxi, Miss.
McCarty is going to run the Florida insurers in the ground with his egomanaical, condescending, know-it-all attitude. Private insurers will only take the very, very limited cream of the crop and everyone else will be forced into Citizens. What a joke we have for an Office of Insurance Regulation…
“…Florida already has new companies who are eagerly looking to grow their businesses and will welcome the opportunity to add more customers.” Well, I am affected by this. Who are these new eager companies??
Who wants to have their claims settled by a boring financially stable insurer anyhow? Thanks in advance for the upcoming thrill ride, Mr. Commissioner!
This might be the beginning of the end of the private insurance market in Florida. Two big storms in a 12 month period and its all over in Florida. Can’t imagine the florida insurance commissioner is butting heads with any company trying to to get adequate rate. Give them their rate increase and let the consumers decide who to do business with. Sad day.
IT’S ALL ABOUT CHANGE!!!
THE OBAMA PROMISED WE’D HAVE IT AND HERE IT IS!!!
for all the State Farm agents who have invested their lives in building their agencies only to have the state effectively put them out of business.
Good luck to you all
It is about time the state took a strong stand. They should have taking a strong stand when Allstate & State Farm started redlining and refusing to write coastal areas after Andrew and everyone else followed. Lets hope they tell them to non-renew the rest of their lines and leave the State all together.
I believe it was Ben Frankin who said something to the effect, “Its better to keep your mouth shut and have people think you are an idiot, than to open your mouth and let them know that you are.”
What does Obama have to do with the mess we have here in Florida?
I agree with Bruce, The State tells the Farm to take it all out of Florida…
We the consumer are not idiots. Let State Farm raise their rate and then let us decide who to go to for insurance. At least that way we would have a choice. These small upstart companies are small and undercapitalized. One Cat 5 could wipe them out in hours. And I don’t want the government as my insurance company. We saw them in action with Rita and Katrina.
Bruce
the state has taken a stand; that’s why State Farm and other smart carriers are leaving the property market in the state to others; Insurance is not welfare, nor is it a charity. Florida is a high risk state with a repeated history of large cat losses; if the state dept of ins will not allow a carrier to collect enough premium to cover losses, there is not much choice but for them to leave. One has to wonder how this is better for Florida; it appears it would have been better to allow State Farm to take their proposed increase and remain; after all, there are free market factors involved.
I live in the midwest and we have been hit with large earthquake increases even though there has not been a related cat loss to drain the collected resources. Asking (or forcing) carriers to lose money simply because customers don’t want to pay for their true risks doesn’t fit a capitalistic model; the sharing of risk requires that we all at least share a reasonable portion of that risk. So maybe there is a bit of an Obama overtone afterall…
Somebody has got to put a stop to this nonsense – now he’s gone and driven away the biggest insurer – a couple big hurricanes and the state and these so-called “domestic insurers” will be insolvent and unable to pay claims. Then guess who they’re going to turn to (hint: the U.S. taxpayer)?
I think of the State of FL thinks they can do a better job, let them have the market. The politicians don’t get the joke. Rates in FL are below the risk they demand and if they were adequate, we would not need the Citizens Fund. not only are lower rates not good for business but artificially(politically) lowered rates on the shore are environmentally unsound. It encourages people to build where they quite frankly should’t.
State Farm and the Allstates started these Florida Pup companies so losses would not effect the parent company. They are not funded any better then some of the Regional players.
I was an Allstate agent in NY (Long Island) when Andrew hit. Once the numbers came out our managers told us if Andrew would have hit Miami, Ft Lauderdale or any other large populated area they would have gone under along with the State Farms, Geico’s etc.
I agree with Ha!. God bless the hardworking agents who have put their entire careers and investments into growing their business with State Farm. Those who chose to round coverage and write all they can are now effectively being put out of business. What seemed to be a no-risk franchise has been turned on its head. You’d think someone would have learned from the last time we went through this – anyone remember Independent Fire?
This has to be the stupidest thing I’ve seen in print in a while “McCarty noted that he has been working with state Sen. Mike Fasano, R-New Port Richey, on legislation that would limit the number of non-renewals an insurance company can issue in a year.” Yeah, that’s the answer. Limit non-renewals. Give me a break.
There are some very reasonable solutions out there to cure the market woes of this beautiful state. Sadly, there is no political courage in Tallahassee to do so. It would seem that Gov. Crist has gotten his wish and will undoubtedly chuckle as he escorts State Farm from the Sunshine State. I think he’s made a mistake.
As an independent, SF has always been a competitor of mine. But they are a good player overall, and on the corporate side, they’re smart cookies. These guys pay claims, and they have both money in the bank and the trained staff to know how to deploy it.
We’ll take up the slack on the independent side, no doubt, but don’t for one minute think that those clients that go to Citizens or one of these thinly capitalized takeout carriers will be better off. They may pay less, but the product is grossly inferior, and I don’t think we have the available capacity with *well capitalized, quality* carriers available to serve everyone.
Only one solution will fix this, like many politically difficult problems: complete meltdown. We’ll have a couple of very bad storms, see small carriers crumble, and watch Citizens completely implode. Only then, when our hand is forced, will the Cabinet and Legislature do something positive.
Farewell, big red. You’ve been a fine competitor and I’m sad to see you go.
The insurance commisioner talks about the number of insurance companies willing to take on the new business, but at the same time is trying to get legislation to limit how many can be non-renewed. OK, so if there are interested insurers, why would you want to limit how much new business they can get from those willing to pull out. Unless you know how much this really will hurt Florida’s economy. I wouldn’t believe much that comes out of this guy’s mouth. He should think about runnning for governor of Illinois.
Anyone who thinks that Floridians are better off by State Farms absence understands nothing about property insurance. If State Farm cannot get rate adequate, THE ONLY HONORABLE THING TO DO IS TO PULL OUT!! The promise we make clients is that we will pay their claims. SF is underfunded and they know they will be underfunded in the future. Has it occured to you that when State Farm pulls out, the guaranty fund in Florida loses the company best able to support other underfunded insurers. Ad Bruce, that would mean all of them.
Building in high risk areas is expensive, and is only sustainable by spending large sums of money, including the insurance part. Too bad the elected leadership isn’t more interested in leading the citizens of Florida, instead of pandering to them. Like children, voters need to be told what to do sometimes.
“State Farm Florida was established in 1998 as a stand-alone, well-capitalized company to address the unique risks posed by the state of Florida. After billions of dollars of losses from a series of 2004 storms, State Farm Florida was able to continue to operate only by borrowing $750 million from State Farm Mutual. State Farm Florida has not been able to repay the note due to its financial condition.”
Do these ‘johnny come latelys have a mother mutual to borrow, then not repay, $750M? And you know who REALLY picked up the $750M tab? Homeowners and SF policyhholders in the other 49 states.
Yeah, I really want to pick up the tab for F@#$%%^g Florida.
It was my understanding that the messiah campaigned in Florida promising a Federal subsidy program for coastal areas. As a result, this lastest move by State officials only reinforces the “need” for assistance from Washington. Already a debitor State, those of us in left in Michigan simply can’t wait for our tax dollars to be funneled to the poor folks who live in catastrophe prone areas.
Florida Insurance Commissioners had always been antagonistic towards SF. It’s a piss ant state of the dead and dying who think that everytime their retirement huts gets damaged, “somebody” must continue to pay to fix it time after time. It can’t afford to be experience rated and has to rely on the rest of the country for rate subsidies. Florida has a big problem and making it an unfriendly place to do business isn’t helping.
McCarty seems to represent exactly what is going wrong with this country. Businesses are in business to make a profit!!! No apology!!!! Obviously State Farm wasn’t making a profit! So as business owners they are choosing to leave. Good for them!!! And the Insurance Commissioner wants to “pursue all legal options” against them???? Sounds like McCarty should have made more friends, not emenies, to solve his growing problem.
Of course some little companies will start up in Florida…..and when they start losing money, they’ll leave too.
When will the residents of Florida realize at least part of their problem IS THE INSURANCE COMMISSIONER????
Another stupid political decision by our elected officials. Get out of the insurance business and let free commerce do its thing! State Farm has shown the need for an increase; let them have it. Why should a State Farm policy cost the same as a policy from some underfunded dumpy take out company? It shouldn’t. Let the people decide who they are going to buy from. The insurance dummies will buy from Peoples Trust and the like; and the insurance savvy will pay a bit more for a stable company.
More importantly though on this issue: I hope McCarty didn’t tick off State Farm so much so that they pull their sponsoring of the tow truck on the turnpike. Did anybody think of that?!
Insurance 101 dictates that insurance must be affordable and the rate must be adequate to cover losses & expenses. The problem with FL is that if a carrier were to charge an adequate rate, the product would not be affordable. So, if SF had been approved for the 47%+ rate increase they had requested some time ago, the premiums would have skyrocketed, people would have shopped & ultimately placed their cov. with a lower-priced domestic.
Won’t that be the end result of SF’s pull out?
We can not necessarily lay the blame on the situation in Florida squarely on the shoulders of one individual.
The Governor and the Legislature are equally at fault. Their pandering to the property owners is simply a function of their getting re-elected, and then hoping that the wind won’t blow on their watch.
Keep in mind that the Governor is a Republican, the legislature is controlled by Republicans. Yet they seem hell bent on creating a socialist insurance system, so long as it is politically expedient.
Instead of regulating rates, the DOI should be regulating for solvency.
State farm has every right to pull the plug!
While the State of Florida will not allow State Farm to increase their already low rates, they will allow Citizens to increase thier rates, in addition to impacting every auto policy in the State with a surcharge to pay for the “catastrophe fund” what a joke!
Sorry man, there are no “insurance 101” rules about affordability. That has no bearing on the constructs of insurance rates. Actuarial soundness rules the day here. And besides, what’s affordable? Five bucks? Sure, but if you charge ten, some folks will cry fowl. A better plan, let the companies decide how much to charge, what coverage to offer and let competition will ensure.
Insurance 101 does not dictate that “insurance be affordable”. What is affordable to one, may not be affordable to another. Affordability is a matter of personal choice and financial priorities. When the government starts “requiring things to be affordable” it is NOT CAPITALISM. I personally would choose NOT TO INVEST in Florida real estate in part due to the insurance problems. But for the citizens who CHOOSE to own real estate and DESIRE insurance, they must evaluate the insurance coverage options available to them, and either be insured, or uninsured. If your lender is requiring insurance, and you can’t “afford” it, then you should get a smaller loan, ie buy less house or don’t buy the house.
And to the Florida agent….this has EVERYTHING TO DO WITH OBAMA. This is the attitude of liberal democrats….thinking that they should pass laws requiring businesses to do things that cause them to lose money….businesses close!!!! They can’t borrow from China!!!!
Gill Fin, good points. SF leaving FLA is not good for homeowners or it’s agents. If there is so much capacity available from “low priced domestic carriers” then McCarty should let SF have it’s rate increase and let the customers decide if they want to pay the SF rate or flock to these new domestic carriers.
I never see McCarty discuss anything about the actual SF policy & coverage. The SF policy offers some things that small domestics would never consider. Additionally thay have a “brand” to protect and can’t duck & run like others did after 2004/2005. Maybe that’s why they charge more?
Don’t fool yourself. King Crist is a Republican in label only. He knew he would have a difficult time being elected Governor under a Democrat label.
He is a liberal Democrat and has surrounded himself with the same ilk.
State republicans should be ashamed they ever voted him in.
I don’t know jack about Crist…wasn’t referring to him.
But I have noticed this nationwide trend of liberal democrats running as republicans so they can win.
What does that tell us????????????/ Jeez, next election there won’tbe any democrats running!
Just saw Crist on the news on TV. His comment on State Farm leaving: “Their rates are the highest in the state, so it is good for Florida that they leave.”
Politicians have no clue; they act to get re-elected or elected to new posts. They also interviewed Alex Cink; at least she knows what is going on and will take this seriously.
I wonder how quick the state issue a order and stops this. That is the reason that Farmers issued non-renewal to all State of Texas policies in one night so the state could not stop them. They came back and changed their mind when the state backed down. This is not good for any coastal state!
Gee, it was just 2 weeks ago I predicted this would happen after the rate rejection.
Here is another prediction. They will non renew about half the policies, mostly in coastal areas. Keep some commerical and some condos. But this will only be after the Ins Commissioner files a suit against them for not comforming to the orderly withdraw requirements and being a bad neighbor. Ooh and look for some comments from Citizens as well, they are the ones that stand to take the largest hit at this point since all those State Farm agents will attempt to start moving all that business over to them ASAP.
So who is going to start the petition to have an elected Insurance Commissioner again. It is clear that he does not answer to the residents of this state now, he is the Governors puppet and is not doing anything to strenghten the insurance industry or keep solvency in the marketplace. So the Governor thinks this is a win for him. It will bite him in the A$$, but then I hear he likes that.
FL in sad shape from politicians who are practicing their trade in being political. They unfortunately know NOT of what they speak and the citizens will stand to suffer. Wait for an assessment (again) to pay for a couple of big storms and there will AGAIN be an outcry for reform. By then these clowns will have used the FL Ins commissioner postion as political step-stone and moved on up…just look at our Sr Senator.
“Definition of good neighbor: someome to be trusted; a courteous, frinedly source of help when help is needed; someone you can count on; someone who cares.” Edward B. Rust, Jr., President of State Farm.
State Farm was built on face-to-face Good Neighbor service. Today, even though we have more than 64 million policies, we still believe and live by Good Neighbor service. It’s more than a slogan; it’s the way we set ourselves apart from other companies. It’s been that way since G.J. Mecherle founded the Company in 1922. It’s a State Farm tradition. State Farm’s mission is to help people manage the risks of everyday life, recover from the unexpected, and realize their dreams.
We are people who make it our business to be like a good neighbor; who built a premier company by selling and keeping promises through our marketing partnership; who bring diverse talents and experiences to our work of serving the State Farm customer.
Our success is built on a foundation of shared values — quality service and relationships, mutual trust, integrity and financial strength.
Our vision for the future is to be the customer’s first and best choice in the products and services we provide. We will continue to be the leader in the insurance industry and we will become a leader in the financial services arena. Our customers’ needs will determine our path. Our values will guide us.
OK SINCE THIS IS WHAT THEY PROCLAIM, DO IT!
No further statements are needed.
“Affordable” doesn’t enter into it at all.
Insurance 101 says rates must be not excessive, inadequate, or unfairly discriminatory. This is for both the protection of the insurer and the insurance market as a whole.
The Florida regulators have violated their duty by demanding inadequate rates.
I SAY GOOD BYE STATE FARM WE ARE ALL SICK OF YOUR WHIPPING US AND SMILE WELL YOU SCREW US . THE ONLY PERSON LEFT ON THIS PLANT THAT THINKS STATE FARM IS SO GREAT IS MR [nobody important]. GOOD BYE AND GOOD RIDANCE STATE FARM. AND TAKE ALL YOUR CRAP POLICIES WITH YOU.
By Anita Lee, The Sun Herald, Biloxi, Miss.
Nov. 16–As instructed, State Farm catastrophe manager Alexis “Lecky” King refused to answer questions an Oklahoma attorney fired at her for one hour and 10 minutes.
Instead, she repeated the same phrase 87 times: “Because of the ongoing state and federal investigation, on advice of counsel, at this time, I must invoke my constitutional right to remain silent.”
She would not tell the attorney why State Farm ordered a second damage report on property when the first showed a policyholder’s losses were covered. Nor was she willing to discuss why State Farm went with that second report, finding little or no covered damage.
It happened after an Oklahoma tornado and, records show, on the Mississippi Coast after Hurricane Katrina.
“Do you believe as a team manager — catastrophe team manager — that you owe any of either the policyholders in Oklahoma who endured their catastrophe of May 1999 or the policyholders who suffered losses in Katrina any type of apology?” asked the Oklahoma policyholders’ attorney, Jeff D. Marr.
Same answer.
“Can you tell myself and this jury what it will take, what the next jury in January, or any juries down in the Gulf Coast states need to do in order to ensure that State Farm stops this kind of behavior?” Marr asked.
State Farm’s attorney objected to the question.
It didn’t matter. King feared answers might incriminate her because she is the target of a state grand jury investigation in Mississippi regarding the insurance industry’s claims practices after Katrina. She was even unwilling to say what route she took to reach the Nov. 3 meeting in Pensacola, Fla., where she lives.
The Oklahoma Supreme Court compelled King, along with State Farm executives from Bloomington, Ill., headquarters, to submit under oath to Marr’s questions.
An Oklahoma jury in May found that State Farm “recklessly disregarded” its duty to deal fairly with policyholders, doing so “intentionally and with malice” through the use of biased expert opinions after the 1999 tornado. The tornado, one of many to strike May 3, 1999, reached a strength of F5, the most catastrophic on the Fujita scale.
As a result, the first of Marr’s tornado clients collected $13 million in damages. Marr hopes to show State Farm’s behavior continued in Mississippi. By doing so, he could secure higher damages for 70 more members of his class-action lawsuit in Oklahoma.
State Farm issued a statement Friday in response to Sun Herald questions about the legal activity: “The tornado that struck Oklahoma City in 1999 and Hurricane Katrina are two separate events,” the company said. “We handle claims individually and pay what we owe based on the contract with the policyholder.”
Marr is sharing information with Mississippi attorneys representing hundreds of State Farm policyholders whose homes Hurricane Katrina damaged or destroyed.
He also is sharing information with the Mississippi attorney general, who has convened the grand jury investigation, and with the U.S. Justice Department, which has launched a probe of its own.
In fact, Marr has announced to the world on his Web site, http://www.marrlawfirm.com., where to secure court records about State Farm.
State Farm attorneys have fought to keep employee testimony private in Oklahoma and Mississippi. In fact, at State Farm’s request, an Oklahoma judge has forbade further discussion of the case by Marr and the other attorneys. State Farm is using court protections and procedures, the company said, available to all parties in a lawsuit.
As cases in both states grind forward, more information comes to light.
Executives for the nation’s largest property and casualty insurer deny any intentional misconduct. They said the company worked with nationally recognized engineering firms to help determine what policyholders were owed in less than 2 percent of 84,000 Katrina claims in Mississippi.
In sworn testimony this summer in Oklahoma, company chairman and CEO Edward B. Rust Jr. said: “And that is ultimately my concern, also, is that we want to be fair with our customers. After all, the success of this organization is driven by our ability to retain current customers and to attract new customers. The last thing we want to do is be unfair with our customers.”
Rust has not testified in Mississippi, but Lecky King did. Her testimony in a federal lawsuit filed in Gulfport is under wraps on orders from U.S. Magistrate Judge Robert H. Walker. Attorneys can’t discuss what she did or did not say.
Two State Farm whistleblowers said, King and assistant Lisa Wachter were the only employees in the Coast office allowed to communicate with engineering firms the company used to help sort out what State Farm owed some policyholders after Katrina. Normally, the whistleblowers have said, State Farm adjusters communicated directly with engineering firms.
When a report blamed the covered peril of wind for damage, the whistleblowers said, King ordered another to show the culprit was water, covered by the federal flood insurance program. The company finally called a halt to the reports altogether, the whistleblowers said, because too many showed wind damage.
Joe Hollomon, once a federal prosecutor himself, said his clients, King and Wachter, had nothing to gain by denying claims and were here to help policyholders. In Oklahoma, King’s testimony is a matter of public record, but the attorneys are not allowed to hand it out.
Hollomon told Marr before the questions started: “Obviously, we’re, you know, that’s a matter of concern to myself and my client. She’s going to assert her constitutional privilege and, of course, the dissemination of that could obviously prejudice her if we one day find ourselves in front of a jury somewhere in Mississippi, so, you know, we’re very concerned about that.”
——
State Farm engineering reports
Below are engineering reports recently filed as part of the Oklahoma lawsuit:
Larry Lowe residence, Oklahoma City
May 24, 1999: Strum Engineering, Oklahoma City, hired by State Farm, concluded high winds racked the roof, causing rafters to separate from the ridge, which could lead to leaks from rain and eventually create safety issues. Repairs recommended.
June 11, 1999: State Farm asked Haag Engineering to examine the house. Haag concluded in a report issued July 21: “It is our opinion that the Love (sic) residence was not structurally damaged by wind, and the frame requires no repairs.”
Michael and Lisa Pole property, Oklahoma City
July 19, 1999: Strider Associates, hired by the Poles, found tornado damage to roof framing, decking and brick veneer, all requiring replacement.
July 27, 1999: A State Farm claims representative makes note of the Strider report and repairs recommended, then concluded, “I believe we should hire a structural engineer to inspect and provide us with their expert opinion.”
Aug. 18, 1999: Inspecting for State Farm,Haag Engineering concluded, “The primary structural system of the Pole residence had not been damaged by wind.” Wind damaged only a few roof shingles, the report says.
Terri Mullins property, Kiln, Miss.
Oct. 23, 2005: Forensic Analysis & Engineering Corp., hired by State Farm, concluded “the primary and predominant cause of damage to the subject property was due to hurricane force winds. This is based on the displacement of the house and the absence of water damage to the same.”
Jan. 3, 2006: A second Forensic Analysis report says wind caused “tree failures,” the cause of interior damage is undetermined and that “movement of the house across the street with “minimal obvious wind damage is consistent with a buoyant force applied to the building by rising water allowing the wind to blow the house northwards until it reached an obstruction.” (State Farm interprets its policies to say wind damage is not covered when water contributes.)
Thomas and Pamela McIntosh property, Biloxi
Oct. 12, 2005: Forensic Analysis & Engineering Corp. concluded roof, door, carport and window damage was caused by wind, along with interior damage. The report State Farm ordered included a sticky note on the first page that said, “Put in Wind file — DO NOT Pay Bill, DO NOT discuss.”
Oct. 20, 2005: Forensic concluded wind damaged shingles, along with the second story floor and first floor ceilings, but said “damage to first floor walls and floors appears to be predominately caused by rising water.”
State Farm issued the following statement Friday regarding its handling of policyholder claims. It reads, in part:
“The tornado that struck Oklahoma City in 1999 and Hurricane Katrina are two separate events. We handle claims individually and pay what we owe based on the contract with the policyholder.
“State Farm occasionally seeks the help of nationally recognized engineering firms to assist us in determining the cause of loss.
“Following last year’s hurricanes, we sought assistance from these firms in less than 2 percent of the 84,000 claims filed in Mississippi. Katrina was an unprecedented event and in a small number of claims there was more than one engineering report due to multiple reasons.
“Our intent was to seek assistance to help us settle claims with our policyholders.”
mr no one I WANT YOU TO KNOW I DO NOT GET MONEY FOR THIS..ITS JUST TIME TO WAKE UP…..
ONE THING STATE FARM FORGETS TO TELL ALL OF YOU IS THAT IN FLORIDA WHEN THE WIND HIT HOMES PEOPLE WERE COVERED, BUT STATE FARM JUST DECIDED IT WAS ALL WATER SO NO CLAIMS WERE PAID. THEN THEY CRIED TO THE GOVERNMENT TO COVER ALL FLOODS AND HAVE PASSED LAWS SO THE GOVERNMENT WILL COVER WIND DAMAGE AS WELL. I SAY IF YOU TAKE ALL THE BILLONS IN PREMIUM AND THEN CONVENIENTLY DO NOT COVER ANYTHING—WHAT A RACKET. STATE FARM MUST STOP HIDING THE TRUTH BY SEALING RECORDS IN OUR COURT ROOMS. THIS BIG GIANT HAS SCREWED THE AMERICAN PEOPLE FOR TO DARN LONG. WE SAY PLEASE LEAVE ALL 50 STATES MY GOOD NEIGHBOR, AND TAKE YOUR BS COMMERCIAL OFF THE AIR. I THINK ITS HIGH TIME THE ETHICS BOARD OPENED UP THEIR EYES AND TAKE A CLOSE LOOK AT STATE FARM AND ANY INDUSTRY THAT CAN RAPE PEOPLE AT THE LOWEST TIMES OF THERE LIFE AND THE LITTLE JUNIOR OF A CEO ED RUST WHO HAS TAKEN A GREAT COMPANY THAT HIS GREAT GRANDFATHER STARTED AND TURNED IT INTO HIS LITTLE BANK. WAKE UP PEOPLE AND LOOK AT THE HISTORY. I DID NOT MAKE IT UP. I WISH THAT I DID NOT KNOW THE TRUTH, BUT I DO SO I AM TRYING TO TELL YOU. I HOPE WITH ALL HOPE AND THE LOVE OF THIS GREAT AMERICA SOMEONE ELSE MAY CARE.
Subject Posted By Posted On
RE: RE: State Farm’s Business Decision – Calypso Ratemake
OMG,
Can someone please tell the few stupid posters not to blog and use hallucinogenic drugs at the same time! wtf ?
Folks, ding ding….we live in a free market system, tell the lawmakers this….they should not be setting rates, just approving them. Consumers will sort it out.
If companies want to come to Fla, leave Fla or stay, it is their right to do so….And stfu you whiners. I am going to hurl if I hear another of you bellyache about this junk….
Floridians should be embarrased for suckling off of the other states insurance reserves, What are you thinking….does the population in the other 49 states really have to pay for your losses in the sunshine state ?????? Arrogant, Intitled welfare babies…GO TEAM OBAMA. Yea Economic Justice for all (as long as you live in Fla) Should the other states feel Patriotic for paying for your cat claims ? Pathetic Loosers !
I have been spectator of the Fla insurance circus for many years now..and sad to say, I think the end is in sight…Soon,.one big ugly storm and its over….lights out….and guess what, it may be the best way out: total collapse of the system…then maybe, just maybe, somehow it may get better.
good nite,
rocketman
Below I have attached two prior news articles concerning SF’s finance. The rate increase they requested was not and is not justifiable. I feel that SF’s bluff needs to be called and if they carry threw on it the remainder of their business should be pulled. This would entice another player to enter Florida. Also if this was not a bluff then they would be out of here in under one year not two.
3:21 p.m. February 29, 2008
BLOOMINGTON, Ill. – State Farm Insurance, the nation’s largest insurer, said Friday that profit rose 3 percent last year on the strength of higher auto policyholder dividends despite a steep decline in property-casualty underwriting.
The company said nearly half of the 79 percent drop in underwriting, to $621 million from $3 billion in 2006, was due to a fourth consecutive year of auto rate decreases.
Overall, State Farm said net income edged up to $5.46 billion in 2007 from $5.32 billion a year earlier. It was the fifth straight profitable year for the insurer after significant losses in 2001-02.
Total revenue increased 1.8 percent to $61.6 billion from $60.5 billion.
Chief Financial Officer Michael Tipsord downplayed the decline in property-casualty. “Because there can be significant volatility in the insurance business, we must avoid the temptation of attributing too much significance to short-term financial results – long-term sustainability is the key,” he said in a statement.
2nd article:
State Farm Insurance’s chairman and CEO received an 82 percent raise after the company posted a record profit last year, a statement from the Bloomington-Ill.-based insurer said this week.
Chairman and Chief Executive Officer Ed Rust Jr. got a $5.26 million raise. He earned $11.66 million in 2006 with a base salary of $1.77 million and results-based bonus of $9.89 million, the statement said. Rust made $6.4 million in 2005 and $5.5 million in 2004.
The absence of a major catastrophe helped the insurer generate a record $5.32 billion profit last year, compared to $3.24 billion in 2005 when Hurricane Katrina hit the Mississippi Gulf Coast, release said.
Copyright 2009 Associated Press
This is a ploy. State Farm makes money by the “Law of Large Numbers. Policy holders in Nebraska, Wyoming, Tennessee and throughout the United states pay premiums which are payable to claims anywhere within the company.
State Farm created “State Farm Florida” to exaggerate the proble.
If I were the Commissioner, I would say if you pull out of property, you MUST pull out of Automobile and Life Insurance also.
The NAIC should also advise if they pull out of Florida, they must also pull out of the other 49 states. The NAIC is THE GROUP of INSURANCE COMMISSIONERS and should work together.
Everyone ripped Allstate 2 years ago when they did it…it was only a matter of time till the other big player went down the same road…
How does the State expect private companies to compete, make a profit, and have monies to pay claims if thy can’t charge what is needed.
Sure it’s easy for Citizens because if they run out of money…hey lets just do another assessement. Can State Farm or Allstate do that?
All the morons out there that say kick out their auto…you are retarded.
Basic economics 101…less compeititon = higher price.
Yes, lets kick out Allstate and Statefarm…that way Citizens can get into the auto business!
If I were the Commissioner, I would say if you pull out of property, you MUST pull out of Automobile and Life Insurance also.
THANK YOU!
first of all, it is a business and as a business it has a right to make a profit. as far as being regulated, it needs to be solvent. fair to handle any claims filed by any policyholder.
we find that during the latest battles between ph (policyholder), insurance company, and the state – we not sure who is actually right or wrong. we like to place blame anywhere but on our own shoulders and act properly. if you look at the many claims filed, how many were actually covered correctly? how many folks were asking for more than what they were paying for? that state needs help because it created it’s casualty insurance to assist when other could not.
we know that the state has no clue on insurance because it is asking all policies in fl to add additional $$ to the fl catastrophe fund. if you read and look, that is still to cover already exisiting losses, not future ones! for a new resident of the state, why should they pay for back losses when they did not live there. if it were me, i’d be suing the state back for my money.
here’s another look at this as well. one person said it earlier, most folks living in fl are retired and living on a fix income. with the economy the way it is, that income has shortened. the cost of living has gone up. cost to rebuild a house is not near it was not even 5 yrs ago. so we run into a conundrum of sorts, one where the insurance company wants to raise rates to handle the possible risks and one where state wants to restrict rates even when they are behind in paying on their own claims. now add that to the cost of expenses/living. whose is going to win? nobody!!
I’m gonna go out on a limb here and state the obvious: the last several commentors don’t have clue what they’re talking about.
First, cutting and pasting articles about how much profit the entire State Farm organization made last year does in no way prove whether rates are inadequate or excessive in a given state, or whether a rate change request is justifiable.
Property/Casualty insurance is regulated by each state, and each state DOI is charged with several separate responsibilities. Three of these are: Market Conduct (“fair” dealings with policyholders), Rate Regulation (rates shall not be excessive, inadequate or unfairly discriminatory, blah blah blah), and Solvency (does the company hold enough money in reserves to pay all outstanding claims, whether reported or unreported, for policyholders IN THAT STATE?).
The “conduct” of State Farm when settling claims is not a factor in whether to approve or deny a proposed rate change. The amount of premium a company collects, as well as all their losses and expenses in a state, including investments – this is all public information. If you think a company is ripping you off premium-wise, just go look at their loss and expense ratios and compare them to other insurance companies (as you would when deciding which mutual fund to invest with).
NO, the NAIC should NOT “punish” State Farm for pulling out of Florida. This is Florida’s bed and Floridians have to lay in it. I have chosen not to live in Florida and I do NOT want to pay to rebuild your house every time the wind blows.
Making them “stay” in Florida is Socialism, not Capitalism. Apparently I didn’t get the memo that we’re switching.
Caveat: I am a friggin’ hypocrite, b/c I hate health insurers as much as anyone and actually wouldn’t mind radical socialist overhaul . . .
Here is another thought. If State Farm Florida, who according to Governor Crist is the hightest priced insurer in the state of Florida, is losing money then think about all the little start up insurance companies in Florida who are under cutting the premiums of their competition to get dollars on the books and who are less capitalized, and how much money they must be losing and eating into their reserves, if they have any.
Other States have done it. By doing so you are telling the insurance company we are running the State not you. If they don’t like it they can make a business choice and leave. Most don’t.
Spencer, a State Farm customer in Florida and elsewhere for 30 years, hopes to find wind coverage from someone other than Citizens.
“They are just dumping us into the Citizens pool,” he said. “It is not as good a coverage. If they are just dumping liability back to the government, why not just have government insurance?”
Malins said his agency tries to avoid putting customers into Citizens because they may later become “take-out” policies by other carriers.
Citizens was criticized for poor customer service after the 2004 hurricanes, but regulators and others say it has improved.
“You have to give them credit for trying to act more like an insurance company,” Malins said.
Some homeowners with other State Farm lines, such as auto, are thinking about taking that business elsewhere.
Citizens does not offer auto insurance, and those homeowners could miss out on multi-line discounts they now enjoy.
State Farm, Florida’s largest auto carrier, expects some of those customers will leave.
“It would be naive of us to think we won’t lose some of our auto business because of the nonrenewals,” Neal said.
….they should not be setting rates, just approving them. Consumers will sort it out.
policyholders.”
Two former insurance adjusters for State Farm will stand trial before a federal judge who earlier determined they breached employment contracts when they copied thousands of insurance records in an attempt to prove policyholders were being cheated after Hurricane Katrina
State Farm will stand TRIAL..
State Farm began the policy cancellations last fall but was soon blocked by the Florida Office of Insurance Regulation. The original plan was to drop customers who lived within several miles of the coast or other bodies of water, while retaining any of those with other company policies, such as auto.
The insurance regulators objected to that practice. After reaching an agreement with OIR over who would be canceled — along with promising a 9 percent rate cut — State Farm began resending nonrenewal notices in January. That premium reduction followed an average 53 percent rate hike in 2006.
The company is now cutting all windstorm policyholders who live within one mile of the coast, regardless of any other coverage they have
Make em quit auto as well. What a dumb idea. They should also make them sell hamburgers too since the regulators believe it is their job to decide wether a company can make a profit or not. The Fla. OIR sets rates! Period, end of story. Ask any Fl. Company. They supress rates and mandate credits for bogus bs. I say all at the OIR get fired + the Gov.
Anyone read the comments today by People’s Trust Insurance Company’s CEO? This coming from a man who has been in the insurance business every bit of 1-2 years, which I believe is the same age of his insurance company he works for. Sure he sells his policies for half price, but keep in mind he has never had to deal with a storm in his “insurance career”. His company may just well be one large hurricane away from insolvancy unless he has plenty of reinsurance, and not the reinsurance through the state.
One Katrina/Andrew hurricane going through any metro area of FL will put under most of these new start up companies, and leave the citizens of FL with huge assessments for the next 10 years.
He has this great idea to fix the catastrophe situation in the state, that he will announce in a couple of weeks. Good timing of this idea, to announce it right after the pullout was announced. Where has this idea been for the last two years?
State Farm Florida was established in 1998 as a stand alone company. After billions of dollars of losses from a series of 2004 storms, State Farm Florida borrowed $750 million from State Farm Mutual. State Farm Florida has not been able to repay the note due to its financial condition, according to the company.
The building ordinances need to change in Florida if they really want to prevent losses. If those cheaply built homes were here in Michigan they would collapse on the first snow fall. The only solution is to adopt the construction style of the homes on Bermuda. They don’t blow over with the first windstorm.
You can’t be serious. If there was a meltdown, that would make the policiticians even more bold. They would blame all the carriers for the governments mistake,(because we are easy targets) saying how greedy the insurance industry is for pulling out. They would seize the opportunity to show the US that a National Hurricane fund is needed and make the US tax payer pay for FL’s idiocy and inadequate rates. Just look at Katrina.
Yeah a meltdown will create change but not the right change.
The Building Codes were changed after Hurricane Andrew. Newer construction survives well in the hurricanes. Thanks for the suggestion.
Your numbers do not reflect State Farm Florida. These are numbers for the national company, if you do not know what you are talking about please do not interject your ignorant response. State Farm Florida is a seprate company.
There are many people who have had great experiences with insurance carriers and others who have not and there are many angles that each of us can come from and attack or applaud. However we should be interested in the long term fix for us individually, not in what has happened because it has been decided on already. Unless there is some form of negotiation between STATE FARM (SF) and the DEPT OF INSURANCE that takes place before SF formally submits its request to pullout, let’s face it they are a leaving. Now I too agree that things will be settled when the wind blows I don’t want it to blow as a fellow homeowner however it’s just a matter of time till then we can just make our best decision based on the information that our hired Professionals (INDEPENDENT INSURANCE AGENTS) provide us. Unfortunately, if you as a consumer leave yourself subject to a CAPTIVE AGENT like SF, or ALLSTATE, or NATIONWIDE, you could be tossed aside when your policy is not deemed profitable, it has even happened in AUTO INSURANCE. Again lets face it insurance companies are here to turn a profit yet if their profit margin has needs to be greater then it is they are going to increase rates. Most of you here are very informed individuals however there are many moms and pops who just pay their mortgage escrow accounts and would be forced after the fact to pay an increased payment after the fact that is way out of their budget (47% higher) and this is why the state has to make decisions like this. There are other more specialized INSURANCE CARRIERS who specialize in Florida and who have the PROPER REINSURANCE to sustain viability available to every Floridian. I urge you to visit http://WWW.SEVERALQUOTES.COM so you do as I did and work with an INDEPENDENT AGENT who can provide you with proposals from many carriers where citizens isn’t the only option offered no matter the age of the home. God bless you all for your input and best wishes to all.
Hey all you Socialists out there that want to force a for profit company to stay in business in an area that is high risk and according to them if they stay, they will not be able to pay your claims. You do realize that by cancelling policies that they will not make any money. They are not raping anyone by leaving. According to them they are doing you a favor by making you pick another carrier that should be able to pay your claim.
A good neighbor would tell you if they could no longer support their end of a contract. that is what State Farm is doing.
Sad to see the government drive them away, but let them go.
You are not entitled to demand anything from State Farm, they are however required to abide by certain financial standards and they have admitted that they can not do that anymore.
Can we please find another Governor now.
To a socialist, less choice is good. Right up until we have no choice, which is government insurance. Then who will the scumbag attorneys sue?
Bring it on!
And can someone tell my why the attorneyspeak does not jive with any independent analysis done by consumer reports or JD Powers? Why do the independent analysts reach a different conclusion than the blood sucking attorneys? Why is it that policyholders answer my claims questionnaire with nothing but positive responses about their claims experience? Why do people cut and paste the accusatory headlines but not the retractions or subsequent exoneration of State Farm lawsuits? Why the hard on for State Farm? Jealous?
Not able to win in court? Turned down for insurance by State Farm? Turned down for a job by State Farm?
The cut and pasters MUST have a sad State Farm story of their own to tell. And certainly the SF haters are nothing but objective.
This from Ed Rust ‘We are struck by the irony of this situation. At a time when the whole world is learning almost daily about the importance of financial strength and stability, State Farm Florida hasn’t been allowed to take prudent, responsible steps that would allow it to meet its obligations and remain a contributing component of Florida’s economy.’
Think how pissed a homeowner must be to learn he will not be able to insure with SF. For those of you who don’t want to pay more for SF – why would you care if I want to?
Why is anyone actually suprised with this action? State Farm has been the favorite whipping boy for the Florida government and the professional State Farm hate posters on this site for years. It had to come. There is nothing to be surprised about. If you run a grocery store chain and don’t make money in an area, you close the store. By the way, there are a lot of insurance companies that are auto, wc, life, health and bond only. When will these professional cut and pasters start demanding these other companies write property or get out? They are paid idiots.
Why does a business leave a state when they are making money! Insurance companies need to make money to pay claims. Insurance companies are not like the government who can just print some more. It is popular to think insurance companies are evil and there is an endless supply of money . Come on people take responsibility for your own life, learn the truth and then make informed decisions. Does it really make sense that State Farm is making money!
I am an independent insurance agent in Clearwater, FL. We work with over 15 insurance carriers that are currently writing homeowner’s insurance up to 100 years old throughout the state.
If there are State Farm policyholder’s that are looking for coverage in the private marketplace feel free to e-mail me at info@tampabayinsurance.net, call us at 727-213-1890 or request a quote online at http://www.tampabayinsurance.net.
Best regards,
Doug Leavy
Principal Agent
Strategic Insurance Services
Floridians stand up! This is not an insurance issue any more, this is an economic issue. we can’t afford to let the state farm jobs leave the state of florida. surely we can find a compromise.
Haag denies bias, but State Farm suspended business with the company in June and ordered an independent investigation after an Oklahoma jury awarded a total of $13 million to a policyholder over tornado damages. Subsequent trials are set to determine damages for 70 other policyholders, all of whom had claims investigated by Haag.
In past court cases, judges have chastised and even fined State Farm for withholding records the company was ordered to produce. Evidence the company destroyed documents has been presented in several cases.
In the Oklahoma case, after State Farm finally turned over to the court a “claims legal research” DVD and other records, Judge Richard G. Van Dyck told company attorneys
“As I was watching these tapes I just want to say this for the record, the hair on the back of my neck did — did stand up because I was seeing things there that early on in this case I was told by (State Farm) defense counsel didn’t exist and couldn’t be produced. So I’m not real happy with that and I want to remind all counsel that their ethical responsibilities as attorneys outweigh the wishes of their clients.”
Gary T. Fye, an expert in the analysis of disputed insurance claims who lives in Nevada, often testifies in insurance cases. Fye, who said he has testified on behalf of policyholders and insurance companies, has provided the courts information on State Farm’s history of destroying and withholding records.
It’s in black & white. They’ve been doing this for years. Every year, they found another exclusion to insert into the contract to Protect their Finances, and not the Policyholder.
ONE THING STATE FARM FORGETS TO TELL ALL OF YOU IS THAT IN FLORIDA WHEN THE WIND HIT HOMES PEOPLE WERE COVERED, BUT STATE FARM JUST DECIDED IT WAS ALL WATER SO NO CLAIMS WERE PAID. THEN THEY CRIED TO THE GOVERNMENT TO COVER ALL FLOODS AND HAVE PASSED LAWS SO THE GOVERNMENT WILL COVER WIND DAMAGE AS WELL. I SAY IF YOU TAKE ALL THE BILLONS IN PREMIUM AND THEN CONVENIENTLY DO NOT COVER ANYTHING—WHAT A RACKET. STATE FARM MUST STOP HIDING THE TRUTH BY SEALING RECORDS IN OUR COURT ROOMS. THIS BIG GIANT HAS SCREWED THE AMERICAN PEOPLE FOR TO DARN LONG. WE SAY PLEASE LEAVE ALL 50 STATES MY GOOD NEIGHBOR, AND TAKE YOUR BS COMMERCIAL WITH YOU. I THINK ITS HIGH TIME THE ETHICS BOARD OPENED UP THEIR EYES AND TAKE A CLOSE LOOK AT STATE FARM AND ANY INDUSTRY THAT CAN RAPE PEOPLE AT THE LOWEST TIMES OF THERE LIFE AND THE LITTLE JUNIOR OF A CEO ED RUST WHO HAS TAKEN A GREAT COMPANY THAT HIS GREAT GRANDFATHER STARTED AND TURNED IT INTO HIS LITTLE BANK. WAKE UP PEOPLE AND LOOK AT THE HISTORY. I would find a new job and better insurance SF IS GOING DOWN. TO MUCH HISTORY OF BAD FAITH. 44% INCRESS WAS NOT GOOD ENOUGH .
The Insurance Industry has lobbied over the years to see that there is no federal agency which oversees the insurance industry, essentially leaving no federal law or enforcement to protect Insureds against Unfair Insurance Claims Practices. Currently this authority lays at the state level only.
Some states laws allow (some don’t) for judges to award attorney’s fees as well as punitive damages on behalf of the plaintiff suing an Insurance Company in a bad-faith insurance matter (an Insurer’s unreasonable withholding of insurance policy benefits). The importance in having the threat of punitive damages (in an amount sufficient enough to deter malicious, fraudulent or oppressive conduct) being awarded in bad faith cases is enormous as it is the only financial incentive for an Insurer to abide by fair dealing and acceptable good faith standards with Insureds. In the absence of the threat of punitive damages, financially, an Insurer is actually encouraged to engage in unfair claims practices.
The fact that each state has its own system for overseeing insurance companies poses a great problem for policyholders particularly in those states where recent legislative changes and court decisions favorable to the insurance industry may encourage bad faith conduct. Victims of insurance company unfair claims practices are badly in need of federal regulations that, if nothing more, would at least establish a minimum single uniform national standard of Insurer conduct.
In the absence of such a national standard, and according to varying standards independently set by each state, Unfair Insurance Claim Settlement Practices are generally defined as “if the Insurer knowingly commits or performs with such frequency as to indicate a general business practice” according to the following:
Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue;
Failing to acknowledge and act with reasonable promptness upon communications with respect to claims arising under insurance policies;
Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies;
Refusing to pay claims without conducting a reasonable investigation based upon all available information;
Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed;
Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear;
Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by such insureds;
Attempting to settle a claim for less than the amount to which a reasonable man would have believed he was entitled by reference to written or printed advertising material accompanying or made part of an application;
Attempting to settle claims on the basis of an application which was altered without notice to, or knowledge or consent of the insured;
Making claims payments to insureds or beneficiaries not accompanied by statements setting forth the coverage under which the payments are being made;
Making known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration;
Delaying the investigation or payment of claims by requiring an insured, claimant, or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information;
Failing to promptly settle claims, where liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage;
Failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement;
Using as a basis for cash settlement with a first party automobile insurance claimant an amount which is less than the amount which the insurer would pay if repairs were made unless such amount is agreed to by the insured or provided for by the insurance policy.
Yup, I’m cancelled.
Saturday, Jan. 10, 2009
Louisiana lawsuit penalizes insurer
By ANITA LEE – calee@sunherald.com
tool goes here The 5th U.S. Circuit Court of Appeals handed a victory to Louisiana policyholders this week in a Katrina insurance case, but the ruling won’t benefit Mississippians because the state lacks a law requiring timely payment of claims.
In the Louisiana case of Grilletta v. Lexington Insurance Co., a trial judge levied a penalty equal to 25 percent of the undisputed amount paid for wind damage because the company failed to act on the claim within 30 days of receiving proof of the loss. In fact, the appellate ruling said, “Lexington arbitrarily sat on the claim for over two months” after an adjuster concluded wind had destroyed the house. Lexington then hired an engineering firm that blamed the loss on storm surge, excluded from coverage. The April 2006 report also noted wind damage.
In June 2006, Lexington sent the policyholder a $311,055.38 check for the wind damage.
A trial judge levied a 25 percent penalty on that amount for the arbitrary late payment. The judge rejected penalties for the additional amount awarded at trial, $248,325.42, reasoning there was a legitimate coverage dispute.
The appellate court ordered the judge to assess the 25 percent penalty on coverage awarded at trial, saying failure to make timely payment on a covered claim exposes the insurer to penalties on the entire claim.
Mississippians, hundreds of whom waited more than two years for Katrina payments, lack similar protection and are unlikely to get it from the current Legislature, say policyholder attorneys and state Sen. David Baria. Baria is sponsoring a bill that mandates timely payment of claims.
“I believe that would get the insurance companies’ attention as far as treating policyholders more fairly,” said attorney Ben Galloway of Owen Galloway & Myers in Gulfport. “Right now, the deck is stacked against the policyholder. We’ve seen it over and over in Katrina litigation.
“There’s really not much incentive for insurance companies to be fair with insureds on a claim.”
Baria’s bill sets time frames for processing and paying claims, with extensions for insurance companies in catastrophes. Failure to make timely payment subjects companies to 18 percent annual interest and attorney’s fees. The policyholder bill of rights includes other consumer protections.
“It encourages the insurance companies to do the right thing in a timely manner,” said Baria, D-Bay St. Louis. “The insurance company obviously benefits from not paying in a timely manner, whereas the insured’s condition worsens over time. Then the policyholder settles the case for far less than they are entitled to because they’re under duress. That’s what this type provision is designed to prevent.”
Baria holds little hope for passage of the time provision. A much-weaker bill of rights passed the House last year, but Senate Insurance Committee Chair Eugene S. “Buck” Clark never even brought it up for discussion.
“The insurance industry is very powerful,” Baria said. “They exert their influence over various pieces of legislation, in Mississippi and nationally.”
Clark said he is willing to look at Baria’s bill. They plan to meet next week.
However, Clark said, “I’m not going to promise now which bills I might bring up.” Clark also acknowledged insurance lobbyists aplenty roam the state Capitol.
“There’s a lobbyist for every insurance company, and then they have contract lobbyists,” he said. “Oh yeah, they’re up there. I talk to all of them.” He said the lobbyists had nothing to do with his failure to allow committee discussion of the 2008 policyholder bill.
“We’re all policyholders,” Clark said. “I wouldn’t say it was the lobbyists at all. It’s just me talking to some of my colleagues.”
Right now, the deck is stacked against the policyholder. We’ve seen it over and over in Katrina litigation.
I hear that if you get a great lawyer out of Mississippi they can get you everything you want by paying off judges.
It’s amazing how these insurance companies can collected premiums for years on end and when the insured need to use their policy, they suddenly don’t hold up their end of the contract. My husband and I had State Farm for over 20 years, faithfully paid over $35,000 in insurance premiums (home and auto) and when it came time to pay out for the minor hurricane damage we sustained in Katrina (minus our deductible) they rejected it. Then they pull the plug and decide they made their money and it’s time to get out of the home or renter’s insurance and find some other avenue to collect $ without having to pay out. Sad and unfair to those who faithfully paid their premiums and then were left high and dry and some legal loophole that the damage was caused by “flood” not WIND hurricane. State Farm They lined their pockets and got the heck out.
is another person’s policy provision.
Too bad it wasn’t covered, Melanie.
Don’t respond to Melanie William. She regularly whines about this issue. It doesn’t matter if she paid for the coverage or not, she wants it. The morons are taking over this site on this issue and many others.
The problem is that most people think that insurance policies are savings accounts.
Will you beoches THINK just for a second, don’t rail against State Farm, they are REACTING to a situation. The cause of that SITUATION is FULLY ON THE REGULATORS !
THERE IS NO DENYING THIS…….NO WAY. THANK YOUR LEADERS IN STATE GOVT.
WHY DONT YOU ***** AT THEM, NOT STATE FARM
Your FLAT OUT WRONG big guy
Pack the tude and take a hike.
If it were as you state, then State Farm would not be at the TOP of the JD POWERS survey consistently.
If it were as you state, then State Farm would not be the TOP consumer pick for Home and Auto coverage consistently.
It is just funny to see people try to rail against the best company in the industry.
Try again.
Rocketman
By Anita Lee, The Sun Herald, Biloxi, Miss.
Nov. 16–As instructed, State Farm catastrophe manager Alexis “Lecky” King refused to answer questions an Oklahoma attorney fired at her for one hour and 10 minutes.
Instead, she repeated the same phrase 87 times: “Because of the ongoing state and federal investigation, on advice of counsel, at this time, I must invoke my constitutional right to remain silent.”
She would not tell the attorney why State Farm ordered a second damage report on property when the first showed a policyholder’s losses were covered. Nor was she willing to discuss why State Farm went with that second report, finding little or no covered damage.
It happened after an Oklahoma tornado and, records show, on the Mississippi Coast after Hurricane Katrina.
“Do you believe as a team manager — catastrophe team manager — that you owe any of either the policyholders in Oklahoma who endured their catastrophe of May 1999 or the policyholders who suffered losses in Katrina any type of apology?” asked the Oklahoma policyholders’ attorney, Jeff D. Marr.
Same answer.
“Can you tell myself and this jury what it will take, what the next jury in January, or any juries down in the Gulf Coast states need to do in order to ensure that State Farm stops this kind of behavior?” Marr asked.
State Farm’s attorney objected to the question.
It didn’t matter. King feared answers might incriminate her because she is the target of a state grand jury investigation in Mississippi regarding the insurance industry’s claims practices after Katrina. She was even unwilling to say what route she took to reach the Nov. 3 meeting in Pensacola, Fla., where she lives.
The Oklahoma Supreme Court compelled King, along with State Farm executives from Bloomington, Ill., headquarters, to submit under oath to Marr’s questions.
An Oklahoma jury in May found that State Farm “recklessly disregarded” its duty to deal fairly with policyholders, doing so “intentionally and with malice” through the use of biased expert opinions after the 1999 tornado. The tornado, one of many to strike May 3, 1999, reached a strength of F5, the most catastrophic on the Fujita scale.
As a result, the first of Marr’s tornado clients collected $13 million in damages. Marr hopes to show State Farm’s behavior continued in Mississippi. By doing so, he could secure higher damages for 70 more members of his class-action lawsuit in Oklahoma.
State Farm issued a statement Friday in response to Sun Herald questions about the legal activity: “The tornado that struck Oklahoma City in 1999 and Hurricane Katrina are two separate events,” the company said. “We handle claims individually and pay what we owe based on the contract with the policyholder.”
Marr is sharing information with Mississippi attorneys representing hundreds of State Farm policyholders whose homes Hurricane Katrina damaged or destroyed.
He also is sharing information with the Mississippi attorney general, who has convened the grand jury investigation, and with the U.S. Justice Department, which has launched a probe of its own.
In fact, Marr has announced to the world on his Web site, http://www.marrlawfirm.com., where to secure court records about State Farm.
State Farm attorneys have fought to keep employee testimony private in Oklahoma and Mississippi. In fact, at State Farm’s request, an Oklahoma judge has forbade further discussion of the case by Marr and the other attorneys. State Farm is using court protections and procedures, the company said, available to all parties in a lawsuit.
As cases in both states grind forward, more information comes to light.
Executives for the nation’s largest property and casualty insurer deny any intentional misconduct. They said the company worked with nationally recognized engineering firms to help determine what policyholders were owed in less than 2 percent of 84,000 Katrina claims in Mississippi.
In sworn testimony this summer in Oklahoma, company chairman and CEO Edward B. Rust Jr. said: “And that is ultimately my concern, also, is that we want to be fair with our customers. After all, the success of this organization is driven by our ability to retain current customers and to attract new customers. The last thing we want to do is be unfair with our customers.”
Rust has not testified in Mississippi, but Lecky King did. Her testimony in a federal lawsuit filed in Gulfport is under wraps on orders from U.S. Magistrate Judge Robert H. Walker. Attorneys can’t discuss what she did or did not say.
Two State Farm whistleblowers said, King and assistant Lisa Wachter were the only employees in the Coast office allowed to communicate with engineering firms the company used to help sort out what State Farm owed some policyholders after Katrina. Normally, the whistleblowers have said, State Farm adjusters communicated directly with engineering firms.
When a report blamed the covered peril of wind for damage, the whistleblowers said, King ordered another to show the culprit was water, covered by the federal flood insurance program. The company finally called a halt to the reports altogether, the whistleblowers said, because too many showed wind damage.
Joe Hollomon, once a federal prosecutor himself, said his clients, King and Wachter, had nothing to gain by denying claims and were here to help policyholders. In Oklahoma, King’s testimony is a matter of public record, but the attorneys are not allowed to hand it out.
Hollomon told Marr before the questions started: “Obviously, we’re, you know, that’s a matter of concern to myself and my client. She’s going to assert her constitutional privilege and, of course, the dissemination of that could obviously prejudice her if we one day find ourselves in front of a jury somewhere in Mississippi, so, you know, we’re very concerned about that.”
——
State Farm engineering reports
Below are engineering reports recently filed as part of the Oklahoma lawsuit:
Larry Lowe residence, Oklahoma City
May 24, 1999: Strum Engineering, Oklahoma City, hired by State Farm, concluded high winds racked the roof, causing rafters to separate from the ridge, which could lead to leaks from rain and eventually create safety issues. Repairs recommended.
June 11, 1999: State Farm asked Haag Engineering to examine the house. Haag concluded in a report issued July 21: “It is our opinion that the Love (sic) residence was not structurally damaged by wind, and the frame requires no repairs.”
Michael and Lisa Pole property, Oklahoma City
July 19, 1999: Strider Associates, hired by the Poles, found tornado damage to roof framing, decking and brick veneer, all requiring replacement.
July 27, 1999: A State Farm claims representative makes note of the Strider report and repairs recommended, then concluded, “I believe we should hire a structural engineer to inspect and provide us with their expert opinion.”
Aug. 18, 1999: Inspecting for State Farm,Haag Engineering concluded, “The primary structural system of the Pole residence had not been damaged by wind.” Wind damaged only a few roof shingles, the report says.
Terri Mullins property, Kiln, Miss.
Oct. 23, 2005: Forensic Analysis & Engineering Corp., hired by State Farm, concluded “the primary and predominant cause of damage to the subject property was due to hurricane force winds. This is based on the displacement of the house and the absence of water damage to the same.”
Jan. 3, 2006: A second Forensic Analysis report says wind caused “tree failures,” the cause of interior damage is undetermined and that “movement of the house across the street with “minimal obvious wind damage is consistent with a buoyant force applied to the building by rising water allowing the wind to blow the house northwards until it reached an obstruction.” (State Farm interprets its policies to say wind damage is not covered when water contributes.)
Thomas and Pamela McIntosh property, Biloxi
Oct. 12, 2005: Forensic Analysis & Engineering Corp. concluded roof, door, carport and window damage was caused by wind, along with interior damage. The report State Farm ordered included a sticky note on the first page that said, “Put in Wind file — DO NOT Pay Bill, DO NOT discuss.”
Oct. 20, 2005: Forensic concluded wind damaged shingles, along with the second story floor and first floor ceilings, but said “damage to first floor walls and floors appears to be predominately caused by rising water.”
State Farm issued the following statement Friday regarding its handling of policyholder claims. It reads, in part:
“The tornado that struck Oklahoma City in 1999 and Hurricane Katrina are two separate events. We handle claims individually and pay what we owe based on the contract with the policyholder.
“State Farm occasionally seeks the help of nationally recognized engineering firms to assist us in determining the cause of loss.
“Following last year’s hurricanes, we sought assistance from these firms in less than 2 percent of the 84,000 claims filed in Mississippi. Katrina was an unprecedented event and in a small number of claims there was more than one engineering report due to multiple reasons.
Goodbye insurance market. Goodbye a lot of money when the next big storm hits. Goodbye common sense from a lot of posters on this site. These cut and paste posters take a few problems out of millions of claims and make it seem a problem 100% of the time. I will say it again, there are profession posters on this site a lot lately. I was in Florida last week when the announcement came out and some of the people there are starting to realize the mess the government has caused. Wait till the next real storm to see what this mess will amount to. You cut and pasters just love chasing all the companies out of the state in favor of Citizens and underfunded start ups. Idiots.
“criminal” wrongdoings getting away completely Scott-free .TALLAHASSEE, Fla. (AP) — Gov. Charlie Crist said Tuesday if State Farm wants to pull out of the state’s property insurance market it should not be allowed to do any business in Florida.
Mutual OF Omaha pullout of NEW YORK REMMBER AND AT ONE TIME THEY WERE THE BIGGEST IN THE WORLD NOT SO TODAY. STATE FARM GET A 44% INCRESS AND STATE FARM DID NOT PAY FOR THINGS THEY SHOULD HAVE I DO NOT HAVE TO WAIT FOR THE NEXT STORM TO LOOK AT ALL OF THE BAD FAITH HISTORY THE INSURANCE INDUSTRY WANTS THE GOVERMENT TO STEP IN ALL THE TIME WITH EITHER MONEY OR MORE LAWS TO PROTECT THEM THAT MY FRIEND IS COMMON SENSE.
Ditto
I didn’t think there could be so many posters that were this dumb, but it is Floriduh folks….lol ha ha ha
dumb bunnies…..
DVD and other records, Judge Richard G. Van Dyck told company attorneys
.Ok, less than 1 percent of the claims handled involve problems or issues. were did you get your numbers from?
State Farm has history of not releasing recordsBy Anita Lee McClatchy Newspapers In some cases, State Farm’s top leadership prefers not to share or even keep records that offer insight into how policyholder claims are handled, according to court records. Chairman and CEO Edward B. Rust Jr. said in sworn testimony earlier this month that no minutes are kept of quarterly meetings held by the company’s top management, the Chairman’s Council, and that policyholders have no right to information about an investigation State Farm Insurance Cos. has ordered of its relationship with Haag Engineering Co. State Farm spokesman Phil Supple said the company doesn’t “intend to-;try this-;case in the media.” “State Farm stands by testimony given by President and Vice Chairman Vince Trosino, who said when asked about these allegations, ‘It’s not part of our system. It’s not part of our core values. It’s not what made us the most successful property and casualty insurer, life insurer, in the country.'” Juries in two states, Texas and Oklahoma, have found Haag provided biased reports to State Farm to minimize or deny policyholder claims. Mississippi’s attorney general currently is conducting a grand jury investigation to determine whether State Farm and other insurers denied Hurricane Katrina claims through the use of fraudulent engineering reports. Haag denies bias, but State Farm suspended business with the company in June and ordered an independent investigation after an Oklahoma jury awarded a total of $13 million to a policyholder over tornado damages. Subsequent trials are set to determine damages for 70 other policyholders, all of whom had claims investigated by Haag. In past court cases, judges have chastised and even fined State Farm for withholding records the company was ordered to produce. Evidence the company destroyed documents has been presented in several cases. In the Oklahoma case, after State Farm finally turned over to the court a “claims legal research” DVD and other records, Judge Richard G. Van Dyck told company attorneys “As I was watching these tapes I just want to say this for the record, the hair on the back of my neck did — did stand up because I was seeing things there that early on in this case I was told by (State Farm) defense counsel didn’t exist and couldn’t be produced. So I’m not real happy with that and I want to remind all counsel that their ethical responsibilities as attorneys outweigh the wishes of their clients.” Gary T. Fye, an expert in the analysis of disputed insurance claims who lives in Nevada, often testifies in insurance cases. Fye, who said he has testified on behalf of policyholders and insurance companies, has provided the courts information on State Farm’s history of destroying and withholding records. In 1998, Fye wrote in a Florida case “I have been witnessing document destruction, concealment, and obstruction of discovery by State Farm for many years in connection with my review of internal claim practices documents of the insurer. I have accumulated certain Exhibits which show the company’s goals and objectives for document handling by its employees. The documents show close to 28 years of intentional destruction, concealment and distortion of claim practices records.” In some cases, company executives did not keep records. Jeff Marr, the attorney suing State Farm in Oklahoma, took sworn testimony Sept. 6 from Rust. Topics included Rust’s Chairman’s Council, made up of top State Farm executives. The group, which includes the company’s general counsel, meets quarterly. Marr was fishing for records of those meetings that he could subpoena for his lawsuit. “Certainly,” Marr asked Rust, “you keep records of the quarterly meetings where the entire Chairman’s Council is present?” “We have an agenda,” Rust said, “but minutes in that, no.” “Why not?” Marr asked. Rust replied, “Never felt a need to.” Marr later asked, “Are there any written agendas that are available should I choose to request them in the lawsuit?” “I’m not sure what might be available,” Rust said. Rust also said policyholders, who essentially own the private mutual company, are not entitled to know what the Chairman’s Council discusses or decides about litigation against State Farm, citing attorney-client privilege. Marr questioned why the company would withhold information from policyholders, who own State Farm. “Well, again,” said Rust (who has a law degree), “I’m not an expert in the area, but I think as you find — even if I’m a shareholder in a publicly traded company, there are things that are not — you know, I do not have access to.” Marr later asked if policyholders have a right to see documents from State Farm’s investigation of Haag. “No,” Rust said. “Why not?” Marr asked. “Is it privileged?” Rust said, “I believe so.” The Sun Herald (Biloxi, Miss
In Utah, the company was fine $25 million in punitive damages, in part for the “systematic destruction of documents and systematic manipulation of individual claim files to conceal claim mishandling”. An Idaho appeals court fined the company $9.5 million in punitive damages for making use of “a completely bogus” outside bill review company that helped lower the cost of medical bills- THIS GOES ON AND ON! Millions AFTER Millions! WHAT A WASTE. AND TO THINK THE PEOPLE WE PAY FOR ALL THIS WASTE SPENT THE MONEY ON ADS FOR THE SUPER BOWL AND WHO SPENT 450 MILLON DOLLARS ON THE MOVIE “CARS” AND THEN THE BIG WAGES FOR ED RUST, JR CEO OF STATE FARM. JUST GO TO ANY SPORTS VENUE AND YOU WILL SEE STATE FARM HAS PAID Millions AND Millions OF THEIR COSTOMERS MONEY TO MAKE US ALL THINK THAT THEY CARE WHEN IN FACT THE CONSUMER IS THE LAST TO GET A PIECE OF THE PIE THAT THEY PAY FOR. THIS IS NOT WORKING ANY MORE.
February 14, 2008
State Farm Hit With Civil RICO Claim Over Sham Medical Exams
State Farm has been sued for racketeering in New York with a claim that it conspired with “Independent Medical Exam” companies and medical practitioners to produce fraudulent and sham medical reports. The suit, filed January 30th in the Eastern District of New York, is brought under the Racketeer Influenced Corrupt Organization Act (RICO). (This story has been previously reported.
It does not make good anything.
State Farm opens and closes around 25,000 claims EVERY DAY. Their pattern and practice satisfies over 99% of these claims without a problem. Ok, less than 1 percent of the claims handled involve problems or issues. With that, even that one percent of problem claims involved, that is still a large number of raw problem claims. These are the ones that are splashed on the front of the newspaper and spread over the nightly news. All that I am saying is don’t discount the companies efforts, they still satisfy 99 % of the people ALL of the time.
Next Sunday State Farm is the sponsor of the NFL’s Pro Bowl. Once they pull out of Florida and rid themselves of the financial drain, they will sponsor the whole Super Bowl!!!
Well said, nobody important. In spite of the many mindless postings accusing State Farm of being greedy and crooked, they seemed to have found a way to convince Floridians to purchase in excess of 1,000,000 policies.
The bottom line is State Farm is losing money in Florida and the state will not approve higher rates necessary to stop the bleeding. State Farm is simply making a legitimate business decision to stop losing money.
Individuals and competitors are already crying foul, though, for some reason. If State Farm is so bad, then Floridians and competitors should be elated with the announcment of their departure. For some reason, I am not seeing the widespread glee I would expect after reading the State Farm horror stories in Insurance Journal postings and other publications.
Simply put, State Farm writes a significant amount of property in Florida most carriers are not interested in, especially at the price offered by State Farm. Floridians and their state government will reap what they have sewn the next time the wind blows….count on it.
Sorry Charlie, You rolled snake eyes this time with your playing politics. State farm is the 600 pound Gorilla that you just agrivated. Look for Charlie to come running back to State Farm and give them what ever they want to stay. He and his puppet Kevin McCarty(FL Ins Commish) Will soon figure out that insurance is a private sector business that needs to earn a profit, unlike the way they are running (ruining) our state. It will be laughable to see them squirm when 1.2 million people start sending emails to Charlie Crist’s office.
YOUR RIGHT FL AGENT!
Everyone email Charlie, Here is his email address:
Charlie.Crist@MyFlorida.com
conspired with “Independent Medical Exam” companies and medical practitioners to produce fraudulent and sham medical reports.
million in punitive damages, in part for the “systematic destruction of documents and systematic manipulation of individual claim files to conceal claim mishandling”. WAGES FOR ED RUST, JR CEO OF STATE FARM. JUST GO TO ANY SPORTS VENUE AND YOU WILL SEE STATE FARM HAS PAID Millions AND Millions OF THEIR COSTOMERS MONEY TO MAKE US ALL THINK THAT THEY CARE WHEN IN FACT THE CONSUMER IS THE LAST TO GET A PIECE OF THE PIE THAT THEY PAY FOR. THIS IS NOT WORKING ANY MORE.
and knuckleheads here complain about 99% plus customer satisfaction that State Farm enjoys. Where to find the statistics? JD Powers, Consumer reports, ANY INDEPENDENT ANALYSIS.
I can only conclude that the attorneys who post here with such silly, uneducated opinions have lost in court to State Farm or have been unable to purchase insurance from State Farm.
What is your end game, evil attorneys?
No choice for anyone? Government insurance for all?
Ben Stein has it right in his book ‘How to wreck America’.
For those attorney who posses enough intellect to actually read something.
Now, now, Gill Fin. We cannot allow facts or minor details to get in the way of those wanting to make a point or take a stand against some evil company or non-government entity.
Guys, these are the best facts they could make up. If it’s on the internet it must be true.
pressuring its engineers to alter reports on storm-damaged homes so that water, not wind, could be blamed for damage.
Is it ethical for State Farm to do this to customer ?What will the State do with that information?
Let’s see, if we only write business in areas where we have no risk of paying claims. What a novel way to make money.And has been sued racketeering Is it ethical for State Farm to do this to customer?
She would not tell the attorney why State Farm ordered a second damage report on property when the first showed a policyholder’s losses were covered. Nor was she willing to discuss why State Farm went with that second report, finding little or no covered damage.
Oct. 12, 2005: Forensic Analysis & Engineering Corp. concluded roof, door, carport and window damage was caused by wind, along with interior damage. The report State Farm ordered included a sticky note on the first page that said, “Put in Wind file — DO NOT Pay Bill, DO NOT discuss.” is this ethics journalists maybe you should ask Patricia Harned at the ethics resource she is the President ask her about the code of ethics.202-872-4771
nobody important. Put in Wind file — DO NOT Pay Bill, DO NOT discuss.” is this ethics journalists how about it nobody important???
Your response must have some meaning, but I can’t figure out what it is. You might want to read these before posting them. Why is it such a big deal to all of you State Farm haters if they pull out if they are so evil? Why were so many people taken in by their evilness to buy their policies at what you say are outrageous rates? Why does such a low percentage of complaints with the insurance department exist? Because you are lying morons! I just can’t understand why you keep posting the same lying drivel.
She would not tell the attorney why State Farm ordered a second damage report on property when the first showed a policyholder’s losses were covered. Nor was she willing to discuss why State Farm went with that second report, finding little or no covered damage.
Oct. 12, 2005: Forensic Analysis & Engineering Corp. concluded roof, door, carport and window damage was caused by wind, along with interior damage. The report State Farm ordered included a sticky note on the first page that said, “Put in Wind file — DO NOT Pay Bill, DO NOT discuss.” is this ethics journalists maybe you should ask Patricia Harned at the ethics resource she is the President ask her about the code of ethics.202-872-4771
BLOOMINGTON — State Farm Insurance Cos. rewarded its leader with an 82 percent pay raise after profits hit an all-time high last year.
State Farm reported a record $5.32 billion profit in 2006, up from $3.24 billion in 2005, and the insurer’s net worth grew nearly 16 percent to $58.1 billion.
Rust, meanwhile, made $11.66 million last year, including a $9.89 million bonus. That’s a $5.26 million bump from his 2005 income of $6.4 million.
State Farm already settled a class-action suit in Mississippi for a reported $80 million. It settled several other Katrina disputes out of court for an undisclosed sum also, but more lawsuits linger. If the current settlement trend continues, not many will make it to a jury.
The financial impacts of these suits aren’t too severe to State Farm, but Rust said the outcomes could impact the prices and availability of insurance.
Rust continues to evaluate risk by region, showing willingness to refuse service if the cost is too high.
“Frankly we have not written anything along the water in Florida since (1992),” Rust said.
nobody important. Put in Wind file — DO NOT Pay Bill, DO NOT discuss.” is this ethics journalists how about it nobody important??? Why will you not answer the question is this ethics .
You don’t post questions, you post cut and paste complaints. Complaints are filed all the time. That doesn’t make all the company evil. Answer my question, why is the percentage of complaints for this evil company so low? Because out of millions of transactions, there will always be either valid or invalid complaints. Can’t satisfy everyone. My ethics are above board, at least I don’t cut and paste the same old garbage responding to every article. At least I don’t get paid to post nonsense. State Farm is a huge part of the Florida market. Why if they are so bad and so overpriced? Because they aren’t bad or overpriced. I wish you could take the time to learn about why the insurance market is such a mess in Florida. That would take effort and expertise and you are exercising neither.
”State Farm haters if they pull out if they are so evil”? PULL ALL THE WHY OUT EVERYTHING NO MORE STATE FARM IN FLORIDA PERIOD NO CHERRY PICKING THAT IS THEY WAY IT NEEDS TO BE. AS FOR YOUR WORDS ABOUT lying morons THE TRUTH WILL NOT STAY SILENT ANYMORE. YOUR WORDS AGAIN Why were so many people taken in by their evilness to buy their policies at what you say are outrageous rates? IS COMMON SENSE STATE FARM SPENTS BILLIONS TELL THE CONSUMER WHAT A GREAT NEIGHBOR THEY ARE. THEY DO NOT TELL THEM ALL THE CHARGES THAT HAVE BEEN UPHELD IN THE COURTS IN FACT THEY SPENDS MILLONS TO HAVE ATTORSIES HIDE THIS FROM THE PUBLIC. AS FOR outrageous rates WHY WOULD IT MATTER IF ITS CHEAP IF ITS NO GOOD?
Nobody Important – As I have said before, logic and facts mean nothing to many of the IJ posters whether they be professional posters and/or uninformed.
It appears their aim is to simply stir the pot with nonsense and, possibly, annoy the heck out of those of us who prefer a more cerebral approach to discussions.
I think this particular thread has run its course, so I’m going to extricate myself from it. Take my advice and do the same
Buckeye. Put in Wind file — DO NOT Pay Bill, DO NOT discuss.” is this ethics journalists how about it nobody important AND Buckeye??? Why will you not answer the question is this ethics .
BAD IS STATE FARM ALL THAT MONEY WHY DON’T EVERYONE AND THE WAKE UP FOR YEARS THE TRUTH WON’T HIDE THEN YOU’LL SEE. IF YOU THINK THEN YOUR WRONG AND THE INETHICAL WILL BE JUDGED ONE DAY?? HOW COME DONT THE BAILOUT TREATING SHOULD BE ASHAMED. IF SOCIALISM IS SO BAD WHY DO EVERYONE USE MYSPACE? IT IS A STATISTICAL FACT THAT 95% OF THE PEOPLE WHO USE ALL CAPS WHEN POSTING COMMENTS MEET THE LEGAL DEFINITION OF MENTAL RETARDATION, THEREFORE ARE ON DISABILITY AND HAVE THE TIME TO CUT AND PASTE IRRELAVENT INFORMATION THAT THE REST OF US HAVE TO SCROLL THROUGH TO LOOK FOR ORIGINAL THOUGHT.
Buckeye, you are on target. The idiots have taken over this site entirely. I will retire from this thread. No amount of argument or fact is of any importance to them since they have either a massive hate going or they are simply being paid to post this garbage. I just hate letting these hypocrites have the last word. Cut and paste away idiots.
COME ON JUST ANSWER THE QUESTION ABOUT STATE FARM ETHICS. YOU DO NOT HAVE TO RUN FROM THIS? simply being paid to post NO WRONG IT JUST TIME TO WAKE UP.
Looks like goverment shot themselves in the foot again. Wait till the next big storm season and see how these bureaucrates have helped the people of Florida expand their choices. If State Farm can not make it work my guess is the Florida insurance market is not as strong as the commissioner is making it sound!
IJ was kind enough to post an article today titled “AP Analysis: Florida Insurance Bind Overshadows Louisiana” http://www.insurancejournal.com/news/southcentral/2009/02/03/97550.htm
For those of you that claim State Farm Florida is making money, read the following excerpt from that article
****
Insurers’ profits stem from two areas: underwriting property; and investing the money they get from policyholders. The financial meltdown has eliminated their investment income. Now, as State Farm sees it, intrusive Florida politicians and bureaucrats have made it nearly impossible to make money from underwriting, their other income source.
“When markets are doing well, there’s more opportunity to get investment returns. When markets are bad, there is no cushion at all,” Ferguson said. “If they can’t make money underwriting, then where is the income?”
State Farm Florida president Jim Thompson said the firm loses $20 million a month on its property business, paying out $1.21 for every dollar coming in.
“When you look at our financial situation, we have no alternative,” Thompson said. “We’re going to be out of this business. We will not have the resources to pay claims.”
****
This company is paying out more then they are taking in on a monthly basis. This is NOT a way to run a business and make money. With this info in front of us, is it truely a suprise that the company has decided to pull out? I think that they are making the only good choice that they have available now.
THIS the sort of thing that the Insurance Department should take into consideration for when a request for a rate increase is filed. Yet all requests for such were denied flat without even a comprimise solution/minimal increase that would allow the company to at least break even and maintain their financial obligations.
Have any company other than Citizens been able to obtain a requested property rate increase since 2004?
A lot of companies got rate increases since 2004, and some healthy ones too, right up until election year in 2006. Citizens has been on a rate freeze for the third year now and that is the primary cause of the adequate rate issue in Florida. They should give State Farm their requested increase so that they don’t leave the state. If they leave, there is a small shield of property insurers for a hurricane to pierce before the state begins to pay claims, FIGA claims and Cat Fund claims, and then the state can declare bankruptcy!
To the idiot that keeps posting info on STATE FARM (parent company), not STATE FARM FLORIDA.
Those are TWO seperate companies and the profits that State Farm (the parent company) does NOT reflect/represent the income of STATE FARM FLORIDA. SF Florida is LOSING money each month. (refer to my prior post) What you are posting is like saying that GMAC Insurance (which is earning money) is the same as GM Auto Manufacturers(which are losing money). They are two TOTALLY separate entities.
BTW
To the idiot posting that claim of ethics violations.. Was that one of those handled by now disbarred and imprisioned attorney Richard “Dickie” Scruggs? Please cite your sources next time and the particular lawsuit that was part of.
why the hell i’m wasting my time with these haters anyways.
They hate State Farm and all its affilates so much, that when the company announces a move that should THRILL them, all they can do is complain.
pressuring its engineers to alter reports on storm-damaged homes so that water, not wind, could be blamed for damage.
Is it ethical for State Farm to do this to customer ?What will the State do with that information?
Let’s see, if we only write business in areas where we have no risk of paying claims. What a novel way to make money.And has been sued racketeering Is it ethical for State Farm to do this to customer?
idiot
NO HAIR.nobody important.
No point, no common sense, no logic, no english skills, mystery poster.
I have been a customer and have used no other insurance company for over 45 years and have never yet to date placed a claim against home owners also I have been accident free for the last 30+ years .. it is a shame but I will cancel ALL my state farm policies over this
Anyone successful in getting home insurance with another company?
OK, I’ve read enough of the yea’s and nay’s against SF Florida withdrawing from the state and think that, to the consumer out there, you need to arm yourself on the “start up companines” willing to take your business from SF. Check the insurance rating companies BEFORE you are so eager to switch. (one company is giving ALL companies an A rating…unfairly). The OIR decision has not been handed down, and every Homeowner has 6 months prior to their renewal to receive their notice and the exact date of the non-renewal and will have plenty of time get sound advice from their SF agency.
If you haven’t heard from your agents, call them. The offices are responding to 9+ hours of phone calls per day among 3-4 (sometimes more) staff people and the agent. The agents and staff haven’t forgotten that “good neighbor promise”, all though the sky is falling around them. They are there for you still, to calm you, listen to your “hate philosopy” on the company they have devoted their careers to, trying to give you updates and guidance on the situation, while at the same time, wondering if they’ll be in the unemployment lines when the non-renewals start happening.
The agents offices are working in the same capacity with long hours, calls and concerns for the Policyholders as when the triplets (charley, jeanne and frances) hit the state.
So now, when the time has come for SF Florida to take a stand after years of fights with the OIR for insurance reform, to get rates reduced, to change how insurance in Florida is written…you scoff at them and think it’s time for a mutiny! (did you feel that way when your agent wrote you a check, on the spot, no questions asked…in 2004?)
If you’re keeping up with the media frenzy, then you have the mindset that SF Florida is doing this withdraw to benefit the company, and has no regard for the policyholder. You’re not giving your agent (or Susan, Lisa, Linda….etc, those “girls in the office”) that you have a relationship with, half the chance to follow thru with that “promise” they’re so committed to.
A business can’t continue to lose money (and the state can’t MAKE a company stay if they are losing money) and keep that “promise” to pay on the claims filed. SF Florida would be no better than the companies that shut their doors after Andrew. So instead, a pro-active approach is being taken with the withdraw.
Do you really think SF Florida wants to withdraw? Do you think the agents want to lose their businesses that, the majority, have put 20+ years into? Do you think they enjoy cutting hours? Pay? Laying employees off? NO ONE wants this withdraw to happen except those who insist that SF Florida is trying to hurt them by this decision, stating they have had no claims, no tickets or accidents….well, I’m among the “claimless” also, and am insured with SF Florida as well.
I work in a SF agency. I live this everyday… and yes, I wonder if my future is unemployment. My pay has been cut, and hours have been reduced to keep everyone else in the office employed. I go to work everyday with a smile, treat everyone fairly and with consideration, biting my tongue at the bad language and bad press I hear on the phone everyday. I’m keeping my Good Neighbor Promise because that’s what I signed up for.
How many of you would do the same?
Since you are a State Farm agent, perhaps you can confirm this story I read. Is it true that, if I (a State Farm home owner’s policy holder) go to you for help finding new insurance, you are obligated to send me to Citizens?
We aren’t obligated to send you to any insurance company. You own the home, you make the decision. We’re here to help you make that decision.
And on that note… if your home is insured with a company that claims insolvency at the time of a CAT loss, the FHCF (Florida Hurricane Cat Fund) is in a deficit already…who’s picking up the bill to repair/rebuild your home?
Time to question McCarty and Charlie on that one.
The “big 3” won’t be around to pick up the tab as was the case with Andrew.
If anyone is thinking about pulling their car insurance from SF, I would like to say that I have been insured with AMICA for many years and have gotten excellent service. Thumbs up to them (even though I can’t insure my home through them).
i have not worked for state farm long (thus i have no real “loyalty” to say) however i have worked in the insurance industry for years. the sad thing is that most people do not understand what this means for the state of florida. if things do not change, we are all unfortunately, going to be in a position of self- insuring. the state of florida is not in a good position. there are too many insurers who are insolvent & can’t pay out claims & if the companies that manage themselves are all forced to leave then we are stuck with citizens (state insurance) who has to sell their policies to other carriers because they can’t handle the capacity either- and they certainly could not take on the number of policies state farm alone has.
although i am not a state farm “customer” i would encourage you to at least wait until it is known what will happen. if you leave, i also encourage you to at least ensure you are getting sufficient coverage. what is the point of paying for insurance if, in the event of a catastrophic loss, it does not indemnify?
make sure you have endorsements (which do cost additional money but are necessary if you do not have funds to rebuild/ repair yourself) such as personal property replacement cost, mold/ fungus, theft, and i would also encourage at least $300,000 in liability (it is typically less than $50 a year to have $300 vs $100).
i only attempt to educate as i have been through some life altering experiences myself and feel it necessary. i know before i worked in insurance it was a “foreign” language.
Got a letter from State Farm saying my police has been selected for renewal. So I have to get insurance elsewhere. Anyone know who is still writing policies? One thing in the letter that bothers me: (Re: State Farm and OIR settlement) “The settlement requires (???) State Farm to nonrenew 125,000 polices throughout the state.”
There are many other insurance companies serving Florida, that are willing to insure your properties with Wind, keep in mind that Florida insurance Guarantee Association protect your property up to $300,000 in case the company went of business, for more details about Homeowners insurance Florida, go to https://floridainsurance.ws/personal-insurance/homeowners-insurance-florida/