State Farm nixing policies to some coastal communities

February 16, 2012 3:27:56 PM PST
State Farm customers who live along the coast need to check with their agents to see if the company still plans to offer them homeowners insurance.

State Farm has decided not to renew thousands of homeowner policies in parts of five coastal counties. Those counts are Jefferson, Brazoria, Orange, Chambers and Galveston counties.

There are homeowners here who have been with State Farm for more decades, and they say they are stunned to learn the company no longer plans to insure their homes.

Thousands of homes sit right along the Gulf of Mexico, and it's no surprise getting insurance can be tough; but nine miles inland, homeowners policies were not a problem in the Jones Creek community -- until now.

"He told me as of 2013 my insurance, homeowners, would no longer be carried through State Farm, I'd have to go elsewhere," State Farm customer John Hudspeth said.

Hudspeth says he's been a State Farm policy holder for 19 years, but that's coming to an end because the company is not renewing 11,000 costal county homeowners beginning May 1.

"I feel like I'm being ripped off, I feel like this is another case of the American, hard working people being ripped off by a giant corporation," Hudspeth said.

While Hudspeth's agent told him about the company's decision, neighbor Roger Courts, who has been with State Farm for 25 years, said he did not know his coverage was coming to an end until he heard it from Hudspeth.

"I just think it is not right; we have been loyal to them and they got a slogan 'Like a good neighbor.' Well I feel like this is not being a good neighbor, not to just drop somebody after all those years of loyalty," Courts said.

Both men say Texas Windstorm covers them from hurricane damage and federal flood insurance covers them from high water damage, so they are not sure why State Farm lists them among homeowners the company will not renew.

In a statement, a State Farm representative told us quote, "We must find the appropriate balance between our exposure, the resources available to maintain a quality level of service and our ability to meet our financial obligations."

Hudspeth can renew his policy for one more year; Courts just did and is not happy State Farm did not tell him about the decision sooner.

"I paid almost 20 years for them to cover me in premiums. Now all of sudden they are going to back out, drop me?" Courts said.

The Texas Department of Insurance says they are looking into State Farm's decision and it is interesting to note, this area suffered no major problems with Hurricane Ike, and longtime residents say it's never flooded.

State Farm on Thursday afternoon issued the following statement.

"To our knowledge, no notice of non-renewal has gone to a policyholder. It is our understanding that State Farm has announced its intent to non-renew a certain number of policies in the future. At this time it appears State Farm's actions are in compliance with statute.

Consumers who receive notification about a non-renewal are urged to shop and compare premiums and coverage among the 100+ insurers offering homeowners insurance in Texas. TDI's is an online resource where Texans can compare sample prices and other characteristics of insurers that write home and auto policies in their area. Utilizing data obtained from its yearly coastal survey, HelpInsure provides a list of insurance companies that write new and renewal business in the Texas coastal counties at