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State Farm Denied 67 Percent Rate Increase

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Jan 12, 2009 6:52 pm US/Eastern

State Farm Denied 67 Percent Rate Increase

TALLAHASSEE (CBS4) ― The state insurance commissioner has again denied State Farm Florida's proposed 67 percent rate increase for property coverage against hurricanes and other perils. Commissioner Kevin McCarty issued a final denial Monday after months of deliberation.

McCarty previously denied an increase of 47 percent, but State Farm appealed.  An administrative law judge denied the appeal last month and sent the matter back to McCarty.

The Florida-only affiliate of Illinois-based State Farm Insurance Co. now has 30 days to take the case to the 1st District Court of Appeal. A State Farm spokesman said no decision has yet been made but the company will look strongly at that option.

State Farm says they need a major price increase to build reserves for hurricane claims.

This is the first rate increase requested since the Florida Legislature passed a law requiring property insurers to get approval for price increases before implementing them. The law lasts through the end of this year.

(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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