State Farm back in West Virginia

CHARLESTON -- Citing changes in West Virginia's insurance laws, State Farm Insurance announced Friday that it will again offer coverage to new automobile customers in the state.



However, the company said it will not accept new homeowner or commercial customers until the Legislature makes additional changes.



State Farm had stopped writing new insurance policies in West Virginia on Dec. 16, 2002. The company said it lost nearly $290 million on auto insurance policies in West Virginia between 1993 and 2001.



State Farm attributed its decision to changes in the auto insurance market and several revisions to state law that the Legislature approved this year. Those revisions include the establishment of an insurance fraud unit within the office of the insurance commissioner, and a provision that allows insurers to elect to refuse to renew up to 1 percent of their auto policies statewide each year, though no more than 1 percent of their policyholders in any one county.



State Farm said the revisions will give insurers more flexibility to reject policy renewals for ''bad risk drivers'' and will reduce fraud.



''Senate President Earl Ray Tomblin and House Speaker Bob Kiss are to be commended for their leadership in passing these laws, which will bring more stability to the West Virginia insurance market, particularly in auto insurance. This increased stability allows us to begin accepting new West Virginia auto insurance customers,'' said Arlene Hogan, operations vice president for the company's Mid-Atlantic Zone.



However, the company said new homeowner and commercial customers will not be accepted until the Legislature eliminates ''third party bad faith'' lawsuits and makes other revisions. ''Third party bad faith'' lawsuits allege an insurance company failed to handle a claim reasonably. They are filed by non-policyholders involved in claims with policyholders.



The state Chamber of Commerce also has called for a ban on such lawsuits.



State Farm also wants the Legislature to give insurers more flexibility in rejecting renewals of homeowner policies.



A report issued to lawmakers in July by Insurance Commissioner Jane Cline, blamed high homeowner rates on natural disasters such as wind and hail storms. Excluding those catastrophes, the report concluded that the severity of claims filed in West Virginia ''are very comparable to countrywide.''