State Farm Proposes 28 Percent Rate Hike in Florida

A hearing set for February 15 in Tallahassee, Florida, may influence the decision of many All State Insurance customers to seek home insurance coverage elsewhere. According to State Farm, at the planned hearing in front of Florida’s Office of Insurance Regulation, they will propose a statewide rate increase that will hike average homeowners insurance rates for all Floridians by almost 28 percent.

The rationale is obvious, if not frustrating to Florida residents, but it’s not just limited to the high rate of claims that are caused by the very real and ever present threat of hurricanes. State Farm also says that higher instances of fire and sinkholes located near homes are a major consideration behind their proposed rate increase.

The trouble Floridians face is the fact that outside of State Farm Insurance, there are very few options. It appears that there aren’t many insurance companies willing to write new policies in a state known for being visited so frequently by hurricanes. For many residents, their second choice could be the state run insurance company called Citizens.

State Farm Insurance is currently the biggest home insurance coverage provider in Florida, with over 678,000 customers. In 2009, State Farm successfully raised rates an average 14.8 percent, and 2010 saw additional increases of 6.6 percent. State Farm has indicated that, if approved, their latest proposed rate increase will only affect property insurance and will have no effect on the auto insurance premiums of their customers in Florida.