Cancellation Clock Ticks For State Farm Customers

Millions of Florida State Farm customers are scrambling to find new property insurance before the first round of cancellations comes out.

| Insurance Resources

On a quiet tree-lined street in the Rio Pinar subdivision, Diane Sunshine contemplates how she will ensure her most precious investment -- her home -- is protected.

"My parents built this home in 1969," Sunshine said. "It has a lot of meaning. When this house was built, I had a brother that was crippled at the time, and it was built to facilitate him, but before it got finished he passed away."

When her parents retired and moved out, Sunshine moved back in.

"I have great neighbors," she said.

One of those great neighbors is her State Farm insurance agent of 35 years, who lives down the street.

"My agent was probably one of the best. We've always had great service with them," Sunshine said.

But in January, State Farm announced it was dropping property insurance customers in Florida, which left Sunshine in a state of shock.

"I started calling some of my family members, freaking out, going, 'What are we going to do?'" Sunshine said.

Sunshine got a recommendation and just received her new insurance papers from her new company in the mail.

"They're out of Gainesville, Fla.," she said.

Sunshine said she had not heard of the company before.

"I think that homeowners are really going to have to look out for themselves," property insurance attorney Ted Corless said.

Corless warned homeowners to do their homework before signing on to just any insurance carrier that's picking up State Farm's former customers.

"There are most definitely going to be smaller carriers that will not survive a major catastrophe," Corless said. "The unfortunate thing is they don't have the track record that a lot of larger insurance companies have. They also don't have the resources that State Farm or Nationwide or a lot of these other companies have."

Demotech and A.M. Best are the two major credit-rating agencies for the insurance industry. On their free Web sites, homeowners can find assessments of a company's financial strength and a grade from A to F.

"I think everybody knows where they're at relative to State Farm in the playing field, and they're going to come in and proportionately take their share," Corless said.

John Tankersly runs an independent insurance agency, and said there are plenty of good options for Floridians.

"I don't think that as a Floridian you have to worry about, 'My options are going to be extremely limited in the future,'" Tankersly said. "They can make that book of business profitable, and they can make it a good source of replacement coverage for Floridians," Tankersly said.

"Don't you feel like you're taking a risk by going with new, smaller company?" WESH 2 News reporter Syan Rhodes asked.

"Yes and no, but at least I'm covered," Sunshine replied.

"So you're really putting a lot of trust?" Rhodes asked.

"I'm putting a lot of trust, putting a lot of trust. I'm putting my home in their hands," Sunshine said.

To comment on this story, send an e-mail to Syan Rhodes .