Some State Farm Florida Insurance policyholders could be paying as much as 45 percent more for their homeowners or condo insurance if the company is allowed to reduce or eliminate a variety of discounts it now offers.

One of the biggest credits State Farm offers is for mitigation -- installing storm shutters, impact-resistant on windows and doors or reinforced garage doors to protect a home against violent weather.

These discounts have saved homeowners hundreds of dollars on their insurance premiums during the last two years.

State Farm also is proposing eliminating discounts for having more than one policy with the company, for installing burglar alarms and for updating plumbing, electrical and AC systems. It even plans to do away with a discount for not having filed a previous homeowners claim.

The move is a last-ditch effort by State Farm to remain solvent as it prepares to stop writing property insurance in Florida over the next two to three years. The insurer has said that because policy rates are so low, it can't continue to operate in Florida and remain profitable. The company eventually would drop more than 1 million policies, including about 700,000 covering single-family homes in Florida.

Last year, the company had complained the mitigation credits -- which were doubled in 2007 -- were too steep and had drastically eroded its revenues in the past two years. State Farm had requested an average 47.1 percent rate hike last year to make up some of the revenue it lost via the credits. The rate filing was rejected.


The Florida Commission on Hurricane Loss Projection Methodology has started a review of how mitigation credits are set. Now, agents and many other insurers are complaining the credits are too high -- and that some are offered on homes that have done little to fortify themselves against a major storm. The commission will hold public hearings Aug. 11.

State Farm needs state approval to reduce the wind mitigation discounts it offers. The 2007 law, which mandated the higher discounts initially, allows insurers to present an analysis justifying reducing the credits.

That's what the company filed with the Office of Insurance Regulation late Friday. OIR has 90 days to approve or reject the State Farm filing.

The company can drop the other discounts without approval since it offered them voluntarily.

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