State Farm insurance still failing as good neighbors

Thanks to POWah OUTages where I live at I'm a bit late in commenting again on State Farm insurance and their latest attempts to fail in delivering on the promise of their slogan "Like a Good Neighbor...."

Today's Washington Times business section had an article, linked here: State Farm refusals face block, that updates the issue.

That article discusses plans by politicians in the states affected by State Farm Insurance's plans to stop selling policies in areas like Mississippi that were hard hit by Hurricane Katrina.  State Farm tried to weasel out of payments for damages from the hurricanes claiming that the damage was all because of water, rather than wind.  It took a multi-million dollar lawsuit loss for them to be reminded of their actual obligations and to start paying up as part of a big settlement.

I've done business with State Farm in the past, for automotive insurance, and like just about any insurance company if you file a claim you better be worried that you are moving up their list of customers to be dropped.  They are plenty happy to take your money, but heaven forbid they have to pay back any of the money because of an actual claim.

I'm not at all surprised by the plans of the politicians that are making efforts to keep State Farm from cherry picking what types of insurance they will sell in what regions of the country.  I would normally prefer that the government keep out and let competition work.  Unfortunately that doesn't always work, and really won't work if State Farm is able to get away with their plans.  While I would hope that State Farm doesn't have to overcharge people in one region of the country to take care of people in another, especially people living in areas that have proven track records for flood damages, hurricane damages, tornado damages, etc.,  I realize that the only way to help keep costs down is to spread the burden a bit.

I hope that the states are able to resolve this problem through state laws, rather than through federal law, but I had already discussed with my wife the idea that the federal government, through Congress, will step in and pass laws with the same intent as the local politicians are trying for -- in effect forcing any insurance company that wants to do business in any state in the Union to have to offer the same policies in other states with little or no ability to discriminate based on actuarial tables or other predictive instruments that would possibly show that doing such business is a bad risk.  State Farm may have themselves to blame if such laws come to pass, either state level or national.

See comments section for a snippet or two from the original article linked above.