Second in a series

In the wake of last month's announcement that State Farm Florida will discontinue providing property coverage in the Sunshine State, the countdown continues toward the date Florida insurance officials will issue a 'yes' or 'no' ruling on the company's action.

Faced with a ticking clock, some of Santa Rosa County's State Farm customers aren't waiting around to get that final pink slip before they take action themselves, while other policyholders have already been dropped.

When State Farm Florida made its plans known Jan. 27, it set in motion a 90-day window for the Florida Office of Insurance Regulation (FLOIR) to determine whether to approve the request for the Winter Haven-based insurance giant to stop writing property coverage throughout the state. Once the FLOIR gives the okay, State Farm must give policyholders 180 days notice that their

coverage has been terminated.

FLOIR spokesman Ed Domansky told Gulf Breeze News two weeks ago this was "a good time to shop around" for homeowners covered by State Farm Florida. Domansky cited some 25 to 30 new companies providing coverage within the state and cautioned policyholders not to wait until the last minute to seek coverage.

But Katie Bradshaw and her husband, Henry, residents of Tiger Point, have already received their termination notices. Their last day of coverage under their existing policy is Feb. 28.

"I got my letter, probably three or four months ago," Bradshaw said last week. "State Farm people had told me, 'You will be dropped.'

"After the storm (Ivan), my insurance went up about six times - from $4,000 to 26,000 a year."

The Bradshaws' experience points out another aspect of the Florida real estate market related to the high cost of insuring property near the water. They had put their waterfront home up for sale and had a buyer willing to pay cash - until he learned what they were then paying for insurance. In recent months, the Bradshaws' policy premium dropped to just under $8,000.

Then came the termination notice for the couple who had been with the company for more than 32 years.

Bradshaw's friend and colleague, Gulf Breeze businessman Bob Montgomery, is still covered by State Farm and has not settled on replacement coverage. Montgomery received a letter announcing the State Farm pull out in the last couple of weeks.

"I've been with State Farm some 30-odd years," Montgomery said. He never had a problem with the company in those years, and the only time he filed a claim, "they were pretty prompt."

After Hurricane Ivan swept through the area in 2004, Montgomery's opinion changed.

"I had such a bad experience with them after the storm," Montgomery recalled. "I was ready to replace my coverage on everything I've got with somebody else."

That's exactly what Gulf Breeze resident Andy Marsh did long before he could be terminated. He dropped his State Farm Florida policies after he'd undergone two insurance rate hikes.

"When my insurance premium went from $2,034 to $2,205, I was not concerned," Marsh said. "When it jumped 24 percent, I was not happy.

"I had a total of $13,000 on two claims after paying them more than $40,000 (in premiums) over 22 years. To me it was just like thievery, or to me they were saying, 'We just don't want to insure anyone in Gulf Breeze anymore.' "

He sought out another insurance agent and changed his coverage - in 2007.

"I guess you could say I fired them before they fired the rest of the state," Marsh said. "I say good riddance."

State Farm agents throughout the state are caught in a precarious position. Considered exclusive representatives of the parent company, they cannot write insurance for any other company other than the state-mandated Citizens Property Insurance Corp.

On Feb. 3, Florida Chief Financial Officer Alex Sink sent a letter to State Farm Florida President Jim Thompson asking the company to allow its agents to broker other companies' products to preserve the "relationship between the State Farm Florida agents and his or her customer."

The company issued a statement in response to Sink's request: "Allowing State Farm agents to become independent agents would change the fundamental nature of our business."

The company maintains a change would "dismantle their business model" and "create additional chaos in the marketplace."

That policy on the part of the company surely means State Farm agents will continue to lose business from their current customers who can no longer find property coverage through the company.

Marsh has taken his coverage elsewhere, and Montgomery intends to follow suit.

Bradshaw says she has State Farm policies on two cars and a couple of boats.

"When I leave, I'm going to take all of that," she said.

Independent agents in the Gulf Breeze area report an uptick in business from one-time State Farm customers.

One agent underwent a similar situation with another company some time back and offered a pointed reaction to an experience awaiting hundreds of thousands of Floridians: "This is like a kick to the gut to some people."

Next week: A look at insurance alternatives - including Citizens Property Insurance and how it works.

Allstate plans to drop some homes' windstorm coverage

Just as State Farm Insurance customers are beginning to consider property coverage alternatives, Allstate Floridian Insurance Co. announced major changes to some of its homeowners coverage.

When some current homeowner policies are renewed, coverage by Allstate will exclude windstorm or hail damage, and sinkhole activity coverage will require an added premium.

Windstorm and hail damage typically result from hurricanes and/or tornadoes.

The new policy, however, will include catastrophic ground cover collapse coverage protection.

Other customers received notice recently that sinkhole activity coverage will require an added premium. No change was noted for windstorm or hail.

Details of these changes are spelled out in recent letters to Allstate Floridian customers. Direct questions to (850) 932- 8311 or 1-800-255-7828.