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What happens now?

By Staff writer
Published May 13, 2006

Q: What's the news for State Farm policyholders?

A: State Farm, the biggest property insurer in the state, wants to raise its rates 71.5 percent on average. For owners of the 30,000 manufactured homes insured by State Farm, the company wants to raise rates 95.3 percent on average.

Q: What happens to customers of Allstate?

A: Allstate Floridian is dropping 174,000 customers, including about 17,000 in the Tampa Bay area. About 120,000 will be transferred to a new insurance company, while the rest, including all manufactured home owners, will likely end up in Citizens Property Insurance Corp.

Q: When will these changes take effect?

A: Unless State Farm's rate request is overruled by state regulators, the increases will go into effect Aug. 15.

Allstate's changes will be effective in November, after the hurricane season ends.

Q: Who's going to pick up Allstate's 120,000 customers?

A: Royal Palm Insurance Co. in Ormond Beach, headed by former Florida state Sen. Locke Burt. Royal Palm is not an Allstate affiliate but will be offered through Allstate agents.

Q: How many mobile homes did Allstate insure?

A: The company said it insured about 4 percent of the state's manufactured home market. It will no longer insure any manufactured homes.

Q: What effect will these changes have on other insurers in the state?

A: It may well make Citizens, the state-run insurer of last resort, bigger than State Farm and the largest property insurer in the state.

As State Farm's rates rise, it may also force up rates for Citizens' policyholders as well because, to avoid competition with private insurers, Citizens is required to have the highest rates in the state.

[Last modified May 13, 2006, 07:56:05]