State Farm to Transfer Customers’ Flood Policies to Government

State Farm Fire and Casualty Company announced this week that it will begin transferring customers' flood insurance policies to the federal government in October.

Published on June 11, 2010

Most State Farm agents, who operate as independent contractors, will continue selling flood policies and renewing existing ones. But by transferring the flood policies to the federal government, State Farm is relieving itself of the larger task of servicing flood policy applications and claims and having its own adjusters respond to flood claims. The federal government, which runs the National Flood Insurance Program, will take over those responsibilities for the policies State Farm sells.

"State Farm as a company will cease doing all that back-room work," said State Farm spokesperson Phil Supple.

"The news that State Farm announced it was pulling out of its Write Your Own (WYO) participation in the National Flood Insurance Program (NFIP) does not come as a total surprise," said Rita Hollada, past chairman and currently PIA National's representative to the Flood Insurance Producers National Committee (FIPNC).

"The NFIP has become the victim of an increasingly political atmosphere in recent months and years. The repeated lapses in the program and its manipulation by Congress affect the certainty of the NFIP as a viable insurance program whose sole purpose is to protect and fund recovery for flood damage," Hollada said in a statement released by PIA.
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