For nearly two dozen insurers in Florida, State Farm Florida's decision to stop selling homeowners insurance means opportunity.
After the announcement last week, one Boca Raton insurer took out a newspaper ad aimed at State Farm customers. Others solicited them on their websites. One company hopes to recruit State Farm agents.
But the holders of State Farm's 1.2 million policies, covering mostly homes, condos, boats and even businesses, won't be able to rely on their State Farm agents to help them find another insurer -- they are not allowed to write policies for any other company except the state-run Citizens Property Insurance.
More than 800 State Farm agents and their employees could lose about 37 percent of their revenue if all the policies migrate to other private insurers. That has private insurers worried that agents have an unfair incentive to send customers to Citizens.
Despite urging from state officials and agents, State Farm so far isn't changing the rules for its agents. It's the last national insurer with so-called captive agents that can write for only one company.
Allstate Floridian, which has reduced homeowners policies on its books since the 2004 hurricanes, lets its agents write for several Florida-based firms. Nationwide Insurance let its Florida agents work as independent agents as it also decided not to renew thousands of policies in the past four years.
State Farm says it is concerned about its brand, said company spokesman Chris Neal. ``Regardless of who the insurer is, [policyholders] associate with their State Farm agents. If an insurer were to go broke or if policyholders have a bad claims experience, it would reflect badly on our brand.''
Late Tuesday, Alex Sink, Florida's chief financial officer, sent a letter to Jim Thompson, State Farm's Florida president, asking the company to allow its agents to write policies for other insurers immediately.
No comments:
Post a Comment