Like a Good Neighbor: State Farm Bails On You.

I'm no socialist, not by a long shot.  I'm simply for doing the right thing.  This is a practice which seems very lost in American corporate culture. For example, I'm against airlines increasing their fares between Thanksgiving and New Year's Day simply because it's "the holidays."  What if retailers decided to jack up prices during the holiday shopping period?  First, they would all have to collude to pull it off.  But, the main reason that will never happen is capitalism and the fact that the free market takes over and keeps them in check.  Oh how I long for there to be a free market regarding air travel.  Sadly, we are faced with a corporate oligarchy, which bilks consumers for more dollars on a whim due to the seasons changing.  Those are the facts.  Their costs do not rise dramatically between November and January.  It is akin to a hurricane or earthquake striking and retailers charging $7 for a gallon of water as opposed to $1.50.  This practice would be known as "price gouging" and is against the law.  Because of my work commitments, I cannot leave Kauai to be with my family over the holidays.  Since, the airlines increase the fare on the route from LA to Kauai by 60-80% during this time period, it prohibits me from flying them out here as well.  This upsets me but I will get over it.  However, the airlines abuse of the "free market" is a bit minor compared to what this post is going to focus on next...

My parents live in Seabrook, TX.  They have been a customer of State Farm for over 20 years.  In 2008, a couple of events occurred in their zip code.  First, Hurricane Ike struck Southeast Texas with a direct blow of catastrophic proportions.  Ike damaged their home and they were forced to file a claim.  After all, this is why you have insurance.  Second, a hail storm hit the Houston area and damaged their roof.  Again, this is why we carry insurance.  I'm sure you all know what happened next:  State Farm dropped them because - wait for it - they live in a coastal property zone.  Not due to the claims, but because where they actually live.  That was the reasoning given by the company's talking head.  So, I thought I would investigate to see just how rough the times were for State Farm.  I mean, if they are dropping customers for fear of having to pay out sums of money, they must be tightening their belts.

Edward Rust, Jr is the CEO of State Farm.  Below you will find his annual compensation history during the past 6 years:

2004:  $5.5 million
2005:  $6.4 million
2006:  $11.66 million
2007:  $11.71 million
2008:  $13.66 million (full on recession)
2009:  $9.44 million (recession worsening)

I'm trying to figure out how Mr. Rust is making ends meet during this troubling time.  Does your company only care about money Mr. Rust?  During hard times, like a good neighbor, are you going to be there?  That is your motto, correct?  Oh, I'm sorry.  What you actually are referencing is that State Farm will be there so long as natural acts of God do not require your company to part with funds for legitimate damage claims in a coastal region.  Got it.  Thanks to your company's acts of neighborly goodness, my parents are now faced with having to replace insurance on their home via another insurer and for a higher premium.  I am certain your company handled the Hurricane Katrina disaster with utmost integrity.  Who am I kidding.

This scathing report of the 10 worst insurance companies in America will make your hair stand on end.  Be sure to scroll down to #4, which is State Farm and a summary of their ethics in handling the Katrina claims in Louisiana and Mississippi.  Katrina struck New Orleans on August 29, 2005.  Certainly State Farm was paying out more during this time than it had in previous years.  Red flag alert:  Did you notice that the CEO's salary went up in the subsequent years after the nation's worst national disaster in history?  Yet, somehow there was enough income to increase the CEO's salary including bonuses while State Farm's legal team was figuring out ways to not honor claims.  This is the result you get when lobbyists (insurance is one of the worst offenders) get elected officials to pass laws that benefit the Corporatists rather than the public.  Mr. Rust, your company is not a good neighbor.  No, it is a fleecing, greedy gaggle of dollar worshipers that loathes the act of paying claims, which is necessary for people who are afflicted by a variety of causes.  I just wonder how many wind damage claims were rejected and determined by your company to be water damages, thus allowing you to skate on your financial responsibility to the policy holder.  This is reminiscent of the burglar that fell through the roof, sued the homeowner, and won.  There is a special place for people like this.  I'll get to that in a minute.

Just once I would like to see a company do the right thing.  If our neighbor is in need, the vast majority of us are there to help in an instant.  Whether it is food, errands, or financial assistance, the American public wants to assist their fellow citizen.  It is too bad that the insurance companies in this nation don't give a crap about people.  They worship the almighty dollar.  State Farm paid out about $11,000 in damage to my parents' home between these two claims.  I would surmise that my parents have contributed more than $50,000 in pure dollars towards State Farm's bottom line over the past two decades.  Yes, you read that right.  But, because of their zip code, they were dropped from coverage, while the CEO maintains his 8 figure salary and lifestyle.  Have fun explaining that one to St. Peter, Mr. Rust.  Might want to bring your sunscreen.