HOBOKEN, NJ — State Farm Mutual Insurance Company said it plans to stop handling claims for the National Flood Insurance Program but will continue writing policies, according to the National Underwriter.
Under the new system, State Farm agents will handle reports of claims for policies where State Farm provides homeowner''s coverage as well as writes flood policies, the article stated.
Claims will either be handled directly by the Federal Emergency Management Agency (FEMA) or its designee, according to Phil Supple, a State Farm spokesman.
State Farm said in a statement it is dropping out of the program because of numerous stop-starts to the program since 2002, and because procedural changes in claims handling are forcing it to divert too much of its resources to the program.
According to FEMA spokeswoman Rachel Racusen, existing customers will not be affected by State Farm''s decision.
Both new and renewing customers will be able to obtain federal flood insurance through a State Farm agent "or one of the other 90 insurers that sell flood insurance through the National Flood Insurance Program" after the program is renewed, the article noted.
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