Insurance giant State Farm, which dumped hundreds of thousands of Florida home insurance customers and refuses to talk to The Palm Beach Post because of its reporting, lost more money last year insuring cars than ever in its 95-year history, Crain’s Chicago Business reported.
The $7 billion loss in its auto segment left the company with an overall $400 million profit in 2016, down from $6.2 billion in 2015, Crain reported.
Could alienating loyal, stable customers in places like Florida have anything to do with the company’s fortunes right about now? Folks who quietly pay premiums and don’t file a bunch of claims can do an awful lot of good for the bottom line.
As the Post has reported, loyalty can matter a lot in insurance, as legions of people dropped for home insurance felt little reason to stick with the company for car coverage. James Savage of West Palm Beach, for example, said he was a State Farm customer for nearly four decades and never filed a storm-related claim, yet the company dropped him.
“Is it possible to hate State Farm?” Savage said. “You bet!”
A more welcoming, transparent attitude might help more people become aware when State Farm does offer relatively consumer-friendly coverage, such as not raising rates on widows or after accidents in which the driver is not at fault.
Another thing that tends to drive customers away: Jacking up rates, Allstate found out. It suffered the greatest percentage of auto insurance customer defections in at least 15 years after two years of substantial rate jumps, Crain reported.
Allstate Fire and Casualty Insurance Co. increased Florida premiums 30.7 percent since the start of 2015, the Post reported last year.