Man, this sucks! I read a headline about "farmers" having to look elsewhere and figured it was about actual farmers and paid it no mind...then tonite on the news it was FARMERS INSURANCE policy holders having to look elsewhere! From their website: Farmers Insurance Announces Non-Renewal of Texas Homeowners Insurance Policies TDI's Recent Resolution Offer Reveals State's Lack of Understanding, Unwillingness to Negotiate Austin, Texas (September 24, 2002) - The Farmers Insurance Group of Companies today announced that as a result of the terms and conditions ordered by the Texas Department of Insurance (TDI), it will be unable to renew current homeowners insurance policies beginning November 2002, and will no longer be able to provide Texas customers with homeowners insurance coverage from thereafter. The decision to non-renew will affect approximately 700,000 customer households. Farmers previously announced it was halting all new homeowners business effective October 31, 2002. With $1.3 billion in losses in Texas homeowner coverage over the last two years, including $435 million in the first two quarters of 2002, the TDI's unwillingness to conduct reasonable and realistic negotiations has left Farmers with no other choice than to halt its Texas homeowners business as a means of survival. All other Farmers services in Texas will be unaffected - including Automobile, Umbrella, Flood, Commercial, Life insurance and financial services. "We have made every attempt to continue offering homeowners insurance to the people of Texas and we take this action with deep regret," said John Hageman, Texas State Executive Director for Farmers. "Farmers and its more than 4,000 employees and agents have been committed to Texas for 50 years. We are taking this step because the terms and conditions currently ordered by the TDI would result in our continued financial losses which puts all our customers at risk and is unacceptable from a business standpoint. We find the grounds for the Department of Insurance's recent legal actions to be without merit," said Hageman. Hageman explained that Farmers' primary concerns have become lost amid the election year rhetoric that has taken center stage. As a result, many people will be affected negatively when all that is needed is a good faith discussion of the facts. "The real issue here is the allegation of unfair pricing practices, which is completely false," said Hageman. "We continue to find wide disagreement over the numbers characterizing our homeowners experience, despite the fact that we have repeatedly presented all our data to the TDI and offered to have independent third-party actuarial review, which they will not accept." Hageman continued, "The TDI's unrealistic demands leave Farmers unable to generate the revenue needed to survive. For every $1.00 in homeowner premiums Farmers has received this year, it has paid out approximately $2.50 in claims. No company can stay in business under those circumstances." While the TDI issued a letter to the media Monday announcing a proposed settlement with Farmers, it was without substance as it offered no real remedies to the issues the two organizations have been seeking to resolve. The TDI has not removed the same fundamentally unsound demands that will cause significant harm to the financial condition of the exchanges and we cannot accept that given our fiduciary responsibility to all policyholders," said Hageman. "The TDI continues to assert the same charges regarding our rates and procedures that are wholly without merit," said Hageman. The type of homeowners insurance policy and the rates Farmers uses today would allow Farmers to continue to serve Texas homeowners. Reverting to old rules and policies as demanded by the TDI, would simply ruin the Farmers business. Farmers losses in the homeowners insurance line of business in Texas alone during the past two and a half years are $1.3 billion. This includes a loss of $435 million through June of this year. "In the interest of preserving Farmers' customers' trust in the financial stability of the organization, it would be irresponsible for Farmers to continue to sustain losses of this magnitude," said Hageman. For the first six months of 2002, Texas represented 15 percent of Farmer total property & casualty premiums countrywide, yet it accounted for 43 percent of the total underwriting losses. Mold losses alone through the first half were more than $300 million, which was the total for 2001. Although the legal actions by the Texas Department of Insurance currently makes it unfeasible for Farmers to offer renewal on Texas customer's homeowners policies, Farmers will continue to provide Automobile, Umbrella, Flood, Commercial, Life insurance as well as financial services products to Texas customers. The non-renewal of Farmers' property insurance policy will not affect other policies currently in effect for that customer. Farmers is currently seeking approval from the Texas Department of Insurance to allow it to continue all multiple policy discounts that may be in effect. "We will continue to work diligently to resolve the problems facing the Texas homeowners market and hope that we can someday re-enter the homeowners insurance market in Texas," said Hageman. "If a meaningful solution is offered, we would reverse this decision. In the meantime, Farmers agents will continue to provide full service to our customers while their policies remain in effect and we encourage our customers to contact their agent with any questions." Farmers Insurance Group of Companies includes the nation's third-largest group of home and auto insurers. Headquartered in Los Angeles since 1928 and doing business in 41 states, the Farmers Insurance Group of Companies provides home, auto, business, life insurance and financial services to more than 10 million households through 17,000 exclusive and independent agents and district managers.
I seriously doubt Farmers' claims. Why is it that Texans pay DOULE what homeowners in ANY OTHER STATE PAY? Are they telling me that claims in Texas are DOUBLE the claims in California? I doubt it. Could it be that the Legislature in California has limited insurance companies' ability to escalate rates and therefore just charged more to customers in states without such restrictions (including Texas). Now that Texas is coming on board with regulation...Farmers says they have to bolt. Sounds like a high stakes game of chicken to me.
I guess I'm losing mine as well. I think I'll cancel my car insurance with them--as a going away present.
We're losing ours also. My agent is pretty cool, and she told us that Farmers had to give notice now for November renewals, but it's possible that they will stay in the State (I think its a battle with Perry). They may lose our home and auto business anyway, and I never play games with my insurance...i.e., if I leave them I will never go back.
What's even worse for Farmer's clients.. I saw a insurance agent on tv this morning saying that because he had a water damage claim previously, he was having trouble finding anyone to get insurance from. Seems that they are afraid of any possible future mold claims that might arise from water damage. Thankfully, I have had my insurance with State Farm for ages.. as long as the don't pull this crap, I should be ok. Hope it works out for you guys with Farmers.
Well hasn't State Farm stopped writing new homeowner's policies? Of course, that isn't the same as taking them away either.
The way I understand it, they aren't cancelling policies. They're just not goin to reup them when they expire. They are also not writing any new ones.. EDIT: Yea RM95..sorry..I did mean Farmers..not State Farm..I dont know if SF is or isnt writing new ones..
I worked for State Farm temporarily a year ago, after Tropical Storm Alison. I was just a temp, looking for a real job. I was at the foot of the elephant. But you get a small view of what's going on and mold claims are just spiraling, skyrocketing. It seems fully a third of my family (well, a fifth?) has had mold problems of some kind or another in Houston and The Woodlands (health problems). I don't know how homeowners will be able to afford to live down there. It's a mess.
My Mom actually worked for State Farm about 4yrs ago and now she works for Farmers. I hate talking to her about insurance because she actually tries to defend those SOBS. Mold coverage was never part of the insurance and people should have taken care of leaky pipes, etc. Insurance is a huge shaft. Use it and you are screwed and if you don't have it you are screwed. But I can't argue with her too much. I really think it is a crock and they still make a profit, even after paying all of these mold claims, the profit just isn't high enough so they have to pull out... boo hoo.
But I can't argue with her too much. I really think it is a crock and they still make a profit, even after paying all of these mold claims, the profit just isn't high enough so they have to pull out... boo hoo. Generally, if a company is making a profit -- even a small one -- there's no reason to leave the market. It just reduces your profits & revenues, shrinks your company, brings you negative publicity, and reduces your future potential customer base. I'd bet they are either playing a high-stakes game of chicken as someone above stated or they really are losing significant chunks of money.
TDI (http://www.tdi.state.tx.us/) has a couple od articles addressing their fight with Farmers. I found this one interesting:
I just got my notification in the mail today! Fortunately my policy doesn't expire until 08/2003 so I have a little time to look! If I find someone else willing to cover me can I cancel my policy early? The car insurance is going with me too! BASTIDS!
I know this is a little personal, but can anyone post how much their HO insurance was per year? If thats too much...how about average insurance per $100,000...plz, I'm buying a house soon and want to factor in insurance fees with the monthly mortgage for a total monthly payment. I try to get prices online but nobody wants to give them out...
So, is Farmer's Insurance just really crooked or something? I ask because I got a $460 settlement from them this summer because they had overcharged me on my car insurance for years. I also can't believe they would use the same multiplier for the mold coverage based solely on state boundaries. So the people in Amarillo, where mold claims are extremely unlikely, were still paying rates based on a high probility of mold claims just because they happen to be in the same state as areas with more mold claims....or at least that's what I get from the posted article anyway. Even though I don't have homeowner's coverage with Farmers, I will likely be taking my car insurance to another company. I don't want to associate with them, and I don't trust them to be around when I need them anymore anyway. One would think that a lot of people will be turning away from Farmers' other insurance products because of this. I mean, I would venture to bet that a lot of those 700,000 homeowners who have Farmers homeowners insurance also have car insurance and possibly life insurance with them. I could imagine a lot of them switching those policies, too. This action by Farmers may well end their ability to profitably offer life and auto insurance in this state. And, judging by their current actions, it may be only a matter of time before they attempt to abandon their auto and life insurance customers, too.
