This story about State Farm pulling out of Mississippi in the wake of big payouts and a high profile court loss is not much of a surprise, frankly, and I suppose the only reason it didn’t pull out the Florida market years ago is that it has a state subsidiary there that insulates the capital of the rest of the company. Most of the story is OK, but a couple parts sound like they were written by Ralph Nader’s evil twin. Look at this remarkable paragraph:
The industry’s performance in the wake of Katrina and other hurricanes, and the use of hurricane payouts as an excuse to jack up premiums and stop doing business in some areas has drawn fire from consumer groups.
"Use of hurricane payouts as an excuse to jack up premiums?" Let’s all just try to calm down here and look at one fact: homeowners insurance is a commodity, not a public good. One does not have the right to have any given company sell you insurance. If I lose money selling something, I’m either going to raise the price or stop selling it. If conditions aren’t right for a company — and State Farm said the decision that their policy language was not enforceable in Mississippi was a factor — then they don’t want to write business in that place. What’s the problem with that? If in fact, as some consumer advocates say in the story, State Farm is doing this out of spite, if there really is profit to be made, they are just spiting themselves, because other companies will rush in to get in on the sales.