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State Farm Asking for Rate Increase
08/12/08 - 02:11 PM

Associated Press

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A State Farm rate hike appears in jeopardy after regulators grilled company officials for hours about their proposed rate increase.

State Farm is asking to raise rates by an average of 47.1 percent.

Florida’s top insurance consumer advocate says that State Farm can’t justify the increase it wants for 1 million customers.

State Farm asked for the rate hike in July, which ranges from a low of 23 percent in inland counties like Polk to as high as 86 and 88 percent in Collier and Flagler counties.

Top company executives say they need higher rates to cover future hurricanes and to make up for money they are now giving customers who add hurricane-resistant shutters.

But state insurance regulators grilled State Farm officials about their numbers and how much profit the company’s national parent is making.

Florida Insurance Commissioner Kevin McCarty can deny the rate hike. Governor Charlie Crist says he’s counting on McCarty to reject the proposal.

If McCarty denies the rate hike, State Farm can appeal the decision to an administrative law judge.

During the hearing, a top State Farm executive said the insurer planned to drop either all, or part, of the coverage now offered to thousands of policy holders. But a State Farm executive said later that was wrong. State Farm reached an agreement late last year to drop no more than 50,000 policies belonging to customers who live roughly one mile of the Florida coast. The company says it not dropping any policies above that number.
   
(Copyright 2008 by The Associated Press.  All Rights Reserved.)