Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Jul 19, 2021

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Like a good neighbor…State Farm may borrow your hedge trimmer and not return it!

But worse yet, the company plans to send 10,000 Florida homeowners in search of new coverage next year, according to National Underwriter.

Yep, the second largest personal property insurer in the Sunshine State will non-renew 10,000 home insurance policies. Ouch.

Why Would State Farm Do This?

Well, contrary to what you may see or hear in their formidable television, radio and internet marketing campaigns, State Farm’s main goal, as a multi-billion dollar insurance company, is actually to avoid paying insurance claims brought on by backing your car up a pole or having your home destroyed by a robot alien (both examples in their recent television commercials).

By doing so, they increase shareholder returns…you know, for people who own their stock…not necessarily those who purchase their insurance.

(Which insurers spend the most on advertising?)

It may sound cruel, but insurance is a business. And no business is in “the business” of losing money. State Farm, like many insurers in hurricane-ridden Florida, love to sell insurance policies when they can, then disappear when they are not making as much money. It’s common practice.

The only difference between State Farm and other, typically smaller insurance companies, is that they will simply buy more advertising time and brainwash the general public into thinking they only exist to pay claims – and that other insurers may not pay claims as easily and generously.

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What Can You Do If You’re Non-Renewed?

Exactly what you should have done before you purchased a State Farm homeowners insurance policy. Get insurance quotes online and/or shop your insurance premium with an independent agent.

Independent insurance agents represent several insurance companies and can usually find you a lower cost insurance policy than the captive guys, who can only supply a single quote.

So, when you State Farm agent doesn’t return you phone calls after you’ve been non-renewed, you can rest assured your independent agent will have more options for you.

Remember, insurance isn’t about advertising. It’s about coverage and premium.

Don’t be fooled by a television commercial. Independent insurance agents can usually find you MORE COMPREHENSIVE insurance coverage for less money.

After all, they don’t have to pay for all those silly commercials, which will certainly increase your premium.

Read more: Top 10 homeowners insurance companies.