First, Mississippi regulated flood insurance rates down to a level that it was impossible to make money, so State Farm's property coverage on the coast did not cover flood/storm damage.
Translation: State Farm didn't like covering flooding because Mississippi sits on the Gulf in hurricane alley so they started jumping up premiums. State residents began to complain so the state gov't tried to regulate insurance rates to keep them from going higher. State Farm responded by stopping its coverage of flooding in a state that sits on the Gulf and has hurricanes from time to time. That sure makes a lot of sense....NOT.
Then, after Katrina, Dickie Scruggs and company sued State Farm, and others, forcing them to cover storm damage from Katrina that their policies explicitly did not cover and were not priced to cover.
Of course, State Farm is more than willing to cover snow melt and frozen pipes in Mississippi as well as damages caused by earthquakes and volcanoes.
So, facing a state government that, by fiat, forces their fees lower and their coverage higher, State Farm is trying to exit the property insurance business in Mississippi, and the state legislature is considering legislation to prevent them from leaving.
Translation: You either play it our way or we're taking our insurance policies and leaving the state.
This kind of attitude on the part of insurance companies prevails in other parts of the country as well. There is roughly a 300 sq. miles portion of this country that is not effected by storms, earthquakes, flooding, tornadoes or icing, and that's the only area where insurance companies want to write policies these days.
Hello! We don't need insurance companies that write only where its safe! |
