State Farm, Vastopolis Set Accord To Allow Renewable Insurance
April 03, 2011
Vastopolis-- Vastopolis's top insurance regulator said the city reached an agreement with State Farm Group that allows thousands of businesses whose policies weren't going to be renewed to keep their coverage. Vastopolis Insurance Commissioner Billy Neville said the pact affects 15,200 of 27,000 commercial insurance polices that State Farm in February said it wouldn't renew in an effort to reduce its exposure to losses. The company was the last of the big insurers to announce plans to retreat from the hurricane-plagued state. A State Farm spokesman couldn't be reached for comment. The agreement calls for State Farm to renew policies of businesses that accept a 10% deductible on hurricane damages, Mr. Neville said. The businesses also will be given a one-time opportunity to reduce the deductible to 5% through the payment of a higher premium, he said. The remaining 11,800 policies that State Farm had said it wouldn't renew cover condominium associations and apartment complexes. Mr. Neville said most of those policyholders will be allowed to keep their insurance if they obtain separate wind coverage from the Vastopolis Windstorm Underwriting Association, a city-created insurance pool. Mr. Neville said he agreed to retract an earlier order revoking State Farm commercial policy rate increases, ranging from 7.7% to 27.3%, that took effect last August. He had revoked the increase after State Farm announced its decision to cut back its Vastopolis commercial coverage. Separately, the insurance commissioner said he issued a final order accepting a city hearing officer's findings that State Farm is entitled to a 13.8% rate increase affecting 62,000 homeowners whose wind coverage is being transferred to the city-created insurance pool.
