State Farm To Again Offer Homeowners,
Business Coverage In W.Va.


The Associated Press, April 27, 2005

State Farm Insurance plans to become a full-service player in West Virginia again. The company announced Tuesday that it will resume accepting applications from new customers for homeowners policies and most business insurance beginning May 1.

State Farm stopped accepting new customers for homeowners insurance in July 2002 and for business insurance in January 2003, citing nearly $200 million in losses it incurred in West Virginia from 1993 through 2003.

In October, State Farm announced that it would again offer coverage to new automobile customers in the state after halting that business in December 2002 because of similar losses.

State Farm said it insures 30 percent of all the automobiles and 25 percent of all the homes in West Virginia.

In both instances, State Farm said it decided to resume taking new customers in West Virginia because of changes made to the state's laws. Those changes included:

- A provision that allows insurers to drop up to 1 percent of their homeowners insurance customers annually.

- A provision that allows insurers to elect to refuse to renew up to 1 percent of their auto policies statewide each year, though no more than 1 percent of their policyholders in any one county.

- A provision that allows insurers to change rates on businesses without prior state approval.

- A ban on so-called "third party, bad faith" lawsuits" filed against insurers by nonpolicyholders involved in an accident or claim with a policyholder. These "third parties" allege the insurers failed to deal with them reasonably, or in good faith. Under the legislation, third parties can instead only file administrative complaints.

"These reforms will bring more stability to the West Virginia insurance market. This increased stability allows us to begin accepting new homeowners and business insurance customers again in West Virginia," said Arlene Hogan, operations vice president for State Farm's Mid Atlantic Zone, based in Frederick, Md.

State Farm and other insurers pledged to roll back auto insurance rates if the ban on "third party, bad faith" lawsuits was adopted. State Farm has said it hopes to file new auto rates in May.