Washington, DC – February 22, 2008 – Senator Hillary Rodham Clinton today called on the State Farm Insurance Company to reconsider its decision to terminate homeowners’ insurance coverage for existing policy holders on Long Island. Senator Clinton, in a letter to State Farm CEO Edward Rust, Jr., called for a detailed explanation of the company’s actions, and urged him to reconsider the decision. Senator Clinton cited strong concerns that if the company follows through with their proposed plans, numerous Long Island families may be left without coverage and could face significantly higher premiums as they are forced to seek coverage elsewhere.
“I find the reports that State Farm is moving to cancel the homeowners’ insurance policies of their Long Island customers extremely disturbing. These hardworking people who have taken out these policies are simply playing by the rules and trying to do the right thing,” said Senator Clinton. “It is troubling to hear that State Farm would treat their customers in this manner without so much as offering them any compelling rationale for this decision before taking such a drastic step.”
Senator Clinton quickly intervened last year when Allstate Insurance, one of the largest insurance carriers in New York, threatened to terminate coverage for policyholders in Long Island, New York City, and Westchester. Clinton’s efforts on behalf of her constituents proved successful when Allstate backed down from their plans to cancel the coverage of their Downstate policy holders (See – http://clinton.senate.gov/news/statements/details.cfm?id=289737&&).
In further efforts to protect American homeowners, Senator Clinton and Senator Bill Nelson introduced the “Homeowners Defense Act of 2007,” an innovative proposal to pool and diversify catastrophe risk to make disaster insurance for hurricanes, floods, fires and other natural disasters more available and affordable for American homeowners (See – http://clinton.senate.gov/news/statements/details.cfm?id=286866&&).
A Copy of the letter to State Farm CEO Edward Rust, Jr. is attached –
February 22, 2008
Mr. Edward Rust, Jr.
Chief Executive Officer
State Farm Insurance Company
1 State Farm Plaza
Bloomington, Illinois 61710
Dear Mr. Rust:
I write to you today to express my deep concern regarding recent actions taken by State Farm on Long Island. Recent news reports have indicated that State Farm has decided to terminate homeowners’ insurance policies on Long Island, leaving numerous families uninsured. I am particularly concerned about the hardship that this drastic decision could pose for working-class Long Island families, and I would appreciate a detailed explanation of your decision not to renew coverage for these homeowners. Further, in the absence of any compelling rationale for dropping homeowners’ coverage, I would urge you to reconsider your decision.
If you continue with current plans not to renew homeowners’ insurance coverage for homeowners across Long Island, I believe that many families will face significantly higher premiums as they are forced to seek coverage elsewhere. While you may view this decision to be in State Farm’s best interests, it is not in the best interests of Long Island homeowners, who need this coverage as a safety net in the event of a natural disaster or some other event.
I am also particularly concerned that the New York State Insurance Department has reportedly received – and is investigating – approximately 40 complaints pursuant to your decision not to renew homeowners’ policies on Long Island. I ask that you cooperate fully with the state’s efforts to review these complaints.
Again, I would appreciate a detailed explanation of the decision to drop coverage for these homeowners who are already struggling to make ends meet. And in the absence of any such explanation, I would urge you to reconsider your decision.
Thank you for your consideration of my concerns. I look forward to your reply.
Hillary Rodham Clinton