Got mad. Got even.
If you drop my homeowners policy, some Floridians are saying, I'll drop your company for auto insurance.
By TOM ZUCCO
Published August 9, 2006
Jack Fenwick wants to send a message to insurance companies that drop homeowner policies or jack up their rates.
“If they do that,’’ he said, “we’ll just take our car insurance business somewhere else.
“It’s not about loyalty anymore.’’
Fenwick is one of a growing number of Florida homeowners — no one is exactly sure how many — who were dropped by their property insurance company and decided that two can play that game.
On its Web site, the Pasco County-based insurance activist group Homeowners Against Citizens, or HAC, calls for a boycott of at least seven insurance companies, including Allstate, State Farm and Nationwide, that sell both auto and homeowner polices.
“The major insurers earn millions in profits selling us auto insurance but refuse to sell homeowners,’’ the notice reads. “Boycotting will cut their profits drastically and that may be one way to force them to return to writing homeowners insurance in Florida.’’
After his homeowners policy was dropped by Hartford, Fenwick, a retired insurance agent who lives in the Island in the Sun Mobile Home Park in Clearwater, found his only alternative was state-run Citizens Property Insurance. His premium tripled.
Now is not the time to get mad, he said. It’s time to take your auto insurance elsewhere.
“It’s sort of like a punishment,’’ said Fenwick, 81. “And it might be a way of getting lower auto rates.’’
According to insurance industry officials, the threat so far of a mass exodus to Progressive and other auto-only insurers is just that.
Many people won’t drop their auto policy because they don’t want to jeopardize the chances of possibly having their property insurance reinstated in the future, or because they don’t want to lose discounts they retain on their auto policy.
And enacting laws that would force insurance companies to write all lines of business, including companies such as Progressive that only write auto insurance, would likely meet stiff industry opposition and could be challenged in the courts.
But for some, none of that matters.
First Floridian insures Dale Piskie’s car and the contents of her Tarpon Springs condo. Three months ago, the company told her it would not renew her homeowners policy, but would continue to write her auto policy.
“I got mad,’’ said Piskie, who is a board member of HAC. “I had First Floridian since 1991, I put up with the increases in premium, and all of a sudden, they’re not going to insure me.”
So she switched her auto insurance to Liberty Mutual.
“It doesn’t hurt me to do that,’’ she said. “If I could tell (First Floridian officials) in person, I would. Because it’s not right.’’
The top two auto insurers in the state, State Farm and Allstate, say they have not seen mass cancellations of auto policies. But they know the resentment is out there.
“It’s the public’s response to what is an industrywide crisis right now,’’ said Michal Shanley, a spokeswoman for State Farm Florida, which, she pointed out, writes only property insurance. State Farm’s auto business is written by its parent company.
And while State Farm has asked regulators for a 52 percent statewide rate increase, the company has not shed large blocks of policies.
Allstate Floridian has. In May, the company announced it would not renew about 174,000 homeowner policies, including about 17,000 in the Tampa Bay area.
As an incentive to stay with the company for auto insurance, Allstate, like many other multiline insurers, will allow customers who will be dropped to keep their discounts for auto insurance.
“We have put mechanisms in place through our agencies for folks to continue to receive discounts on their auto insurance,’’ said Allstate spokesman Ryan Priest. “They retain the discounts and benefits of being an Allstate customer in order to try to alleviate those situations.’’
Priest thinks that because the auto insurance business in Florida is so competitive and discounts so enticing, instances of boycotting insurance companies will be few.
“People are unhappy about some of the decisions that companies have had to make,’’ Priest said. “But we find many people, once they have an understanding of the situation, begin to look for solutions outside of those type of measures, rather than sticking it to the company, so to speak.
“It (a boycott) is an understandable reaction. But it seems like it’s been fairly rare.’’
Whether it stays that way is debatable.
“People resent the fact that insurance companies are making a profit on their auto insurance, but are not willing to insure their homes,’’ said Bill Newton, executive director of the Florida Consumer Action Network.
“You can’t legislate that (auto insurer) Progressive has to enter the homeowners business, but there’s nothing to stop people from voting with their dollars,’’ he said. “And loyalty has nothing to do with it.’’
Newton said discounts for auto insurance don’t usually come close to matching the soaring cost of higher property insurance through Citizens. And he pointed to the financial connections between the large, national insurance companies and their Florida subsidiaries.
“They (the parent companies) just set up separate companies, to protect their surpluses. It’s a clever arrangement,’’ Newton said.
In the end, the ability to change auto insurers is “one of the few things we have to bargain with,’’ he said. “And movements like this can catch on like wildfire.’’
When Liberty Mutual recently dropped the policy on Barbara Signorelli’s home in Seminole, she repaid the company by dropping their auto policy,
“They (Liberty Mutual) lost a good car policy,’’ Signorelli said. “I never had a claim in 11 years, and I sent them a dozen customers. Then they drop me.
“So they’re not getting anything more from me.’’
Signorelli spent three weeks on the Internet searching for a company that would insure both her home and car. She eventually found one — Fireman’s Fund — and switched both her policies.
“My homeowner’s premium will go up about $2,000 and I’ll probably have to get a second job to pay for it,’’ she said. “But we just can’t stand by and do nothing.’’
Tom Zucco can be reached at firstname.lastname@example.org or (727) 893-8247.