Although the most recent Atlantic Tropical Hurricane Seasons, 2006 and 2007, were relatively light, State Farm is not writing any new policies to homeowners who live within a mile from the coast. State Farm indicated that the risk is far too great and that it is "only a matter of time" until there is another big year like the 2005 Atlantic Tropical Hurricane Season. There are other preferred carriers in Florida, but State Farm is one of the largest insurers there.

In fact, State Farm is cutting coastal residence from their insurance rolls, over 50,000 of them that live within a mile from the water on either side of the state. Through a combination for policy price increases of anywhere from 50 to 150% in some cases and a trimming of high-risk customers, State Farm hopes to reduce the risk exposure to the more than 1 Million it insures in the state.

The Great State of Florida's Insurance Government Monitoring agency is looking into forcing State Farm to uphold their previous policy costs, rather than raising fees to its policy holders or perhaps sue the company on behalf of citizens and consumers. Of course, State Farm had paid out huge amounts to policy holders in 2005 and is trying to reduce its risks and reinsurance companies may not be there if another huge season wipes out a decade of policy profits.

State Farm is a business, they are in the insurance industry, their goal is to remain profitable and that means shoring up risks. A Cat V Hurricane in a highly populated area, could amount to billions of dollars in losses to policy holders, which would most likely force them to exit the market place all together. Even though there are a couple of companies that will still write policies, one has to wonder if those policies will be worth the paper they are written on in the case of the Big One?

Even worse is the problem where mortgage companies and banks require the insurance as a stipulation of the loan, if the homeowner is cancelled, the bank will secure the insurance, most likely at an even higher price than the previous policies, even with the huge increases in costs. This is problematic at a time when many homeowners are trying to stay out of foreclosure and real estate prices are continuing to slide. Scary stuff, it is like a financial economic storm, before Mother Nature even warms up for the 2008 Atlantic Tropical Hurricane Season.