State Farm Fla. clients to see rate drop |
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Thu, 15 Mar 2007 22:58
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TALLAHASSEE, Fla. (AP) - Customers of State Farm Florida will see their homeowners rates drop by about 7 percent on average statewide starting this summer because of a new law that makes more state backup coverage available to insurers.State Farm filed for the decreased rate Thursday. Premium reductions will vary widely, from as low as about 1 percent for some customers to as much as 10 percent for others, depending on where they live and what type of home they are insuring.Lawmakers passed legislation in January that allows companies to get more backup coverage from the state's Hurricane Catastrophe Fund. That coverage is cheaper than private reinsurance, which has spiked in cost in recent years.Gov. Charlie Crist said the insurance reform passed by lawmakers is working.'The lower the rate filing, the better, as far as I'm concerned and I know that's how the people of our state feel. So, I'm hopeful that we can have them lower and that's what I look forward to,' Crist said.While wind coverage rates are expected to drop by nearly 25 percent statewide on average, State Farm has said all along that its rates wouldn't go down as much because its backup coverage was already cheaper than what many other companies pay. State Farm buys most of its reinsurance from its own parent company, saving money over what it would cost to buy it from other reinsurers.The company, the state's second-largest home insurer, will get some additional coverage from the catastrophe fund, which will allow it to reduce its rates, said State Farm spokesman Justin Glover.'We are passing 100 percent of our savings on to customers,' Glover said.Customers will see the lower rate when they renew their policies after June 1.State Farm has more than 1 million customers in Florida, behind only state-created Citizens Property Insurance.Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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