Another 'Trail of Tears'
Dawkins just one of many mired in insurance crisis
By Bob Morgan as reported in the Gulf Shores Islander
FOLEY, Ala. - Billy Dawkins of Elberta has a colorful ancestry. His
grandmother was a Cherokee Indian from South Carolina. Her mother and
father were on the "Trail of Tears," the forced removal of the Cherokees
from their native lands to the Oklahoma Territory. It was a march that
resulted in one-fourth of the 16,000 Indians dying from exposure and
According to Dawkins, his grandmother and her brother were so young at
the time it was thought they probably wouldn't survive the forced trek.
As a result, they were left behind with a white family. Dawkins'
grandfather – a preacher - eventually met his grandmother in South
Carolina. They married and, in time, moved to Lamar County, Ala., where
they raised a family.
Retired after 44 years in the trucking business - "It's no easy job" -
Dawkins moved to this area approximately 10 years ago from Woodstock,
Tenn. Today, he finds himself on a trail of hardship of his own.
In 2008 his wife, Eva, was diagnosed with multiple sclerosis, a disease
of the central nervous system. Her medication costs approximately
$60,000 a year.
"Everything is expensive with MS," Dawkins said recently.
"Social Security is about all I've got except for my savings. We own our
home - that's ours. But the insurance and drugs we have to have - I'm
digging down in my savings. I don't know how much longer I can put up
The insurance Dawkins refers to is homeowner's insurance. It is a
familiar refrain on the Alabama Gulf Coast.
"If we didn't have to pay the rates they got us on we could survive a
few more years, but they keep on going up and going up and going up.
It's too much of a burden - we can't afford it. It won't be many years
before my wife and I are homeless."
According to Dawkins, his annual homeowner's insurance has quadrupled in
less than five years. It started out with an annual premium of $875; now
it is over $3,000, and Dawkins said everybody is saying it's going up 45
percent this year.
Dawkins had been with State Farm insurance since 1950.
"They got ridiculous with their rates, so I found somebody cheaper, and
they're just about where State Farm was in less than five years."
Homeowner's insurance on a house the size of the one he lives in today
would cost $500 to $600 annually in Woodstock, Tenn., Dawkins said. And
he knows he isn't alone in this predicament. He's met people in Foley,
Elberta, Lillian and Gulf Shores, he said, who are like him - on the
same difficult trail where homeowners' insurance is concerned. The truth
is, in Alabama the
insurance trail of tears leads through two counties almost exclusively -
Baldwin and Mobile.
In a sense it started on Sept. 16, 2004, when Hurricane Ivan made
landfall on the Alabama Gulf Coast as a Category 3 storm. As a result of
that storm event, within months 200,000 insurance claims were filed for
more than $1billion in insurable losses in this state alone.
"Rates started growing for homeowners about the time Katrina hit (in
2005)," Ragan Ingram, Government Relations manager for the Alabama
Department of Insurance, said this week.
While 65 of the state's 67 counties would be declared a disaster from
Ivan, nearly six years later only two counties - Baldwin and Mobile -
still feel the lingering effects of disaster, and that from escalating
insurance rates. It's something Billy Dawkins said he never envisioned
when he bought property here 15 years ago and moved here five years
For Dan Hanson, on staff with the Homeowners' Hurricane Insurance
Initiative (HHII), a grassroots group that has been attempting to
address the homeowners' insurance crisis along coastal Alabama, it is at
once as simple and as complex as the numbers.
"If you're not fixing the premiums, you're not fixing the problem," he
"Every time we're talking to somebody upstate they're stunned at the
difference (in rates). They're also surprised to learn that four years
ago we were at the same price as everybody else - maybe a tad higher."
What Hanson said held true for generations - essentially equal
homeowners' insurance rates for the state from top to bottom - has
suddenly resulted in rates that are 300 percent higher along the coast
And here is where Hanson and HHII say the numbers get complex if for no
other reason than they allege numbers are not available to the public.
Hanson and HHII approximate - Hanson is quick to point out the figures
are approximations - that 87.5 percent of the state pay $900 annually
for homeowners' insurance, while 12.5 percent - Mobile and Baldwin
counties - pay $3,500 annually.
According to Hanson, as HHII talks to people and holds meetings in this
area on the coastal insurance crisis, he hears coastal homeowners speak
of annual rates of $2,400 or $2,500 more so than $4,000, but, as he
points out, his mother in the Fairhope area for one pays $4,000 and has
never had a claim.
Again, Hanson said the numbers are not official (the last published
state average of $894 was in 2006) because "you can't get the real
"A lot of what is reviewed ... is proprietary, so it's not public,"
Ingram said in referring to insurance companies and how they arrive at
"Certain parts (of it) are in the 'black box' so to speak. That's
But HHII charges that they cannot get any real numbers out of the
Department of Insurance either. DOI says the information is protected by
law, Hanson said. Furthermore, HHII says Ingram and DOI have now ceased
to be responsive to their telephone calls. Some of the calls HHII have
made of late to DOI have been about setting up a research appointment
regarding the state's so-called "Sunshine Law."
HHII is currently working on drafting several legislative bills, one of
which would subject DOI to all aspects of the state's Sunshine Law or
"Open Meetings Act." The bill would require DOI to publish annually full
disclosure of all categories of actual insurance claims and losses zip
by zip code. All insurance companies that do business in Alabama would
supply DOI with the information.
Sen. Trip Pittman of Fairhope has asked for county by county/zip code by
zip code numbers regarding the amount of claims made annually in
Alabama, Hanson said.
"The insurance companies won't give it to him, and the Department of
Insurance won't give it to him," Hanson said.
Under HHII's transparency bill those claims would be published and
broken down for fire, hail, tornadoes, floods and so on. Also, DOI would
be asked to disclose the "actuarial model" and data used in calculating
For HHII, Hanson and people like Billy Dawkins the question is a
fundamental one: Are Baldwin and Mobile counties really more expensive
than the rest of the state when it comes to insuring property?
Ingram says yes. "Exposure in these two counties is massive," he said
"What drives (the cost) more than anything is the cost of re-insuring
for these front-line companies. Those rates aren't reviewed by anybody."
HHII, on the other hand, is asking if coastal Alabama is threatened by
tropical storms and hurricanes while upstate Alabama is prone to
tornadoes, floods and hail; and if, as one national insurance
organization (ISO) has reported, 45.6 of catastrophic losses from
1988-2007 were from hurricanes and tropical storms as opposed to 26.5
percent for tornadoes, why aren't coastal homeowners paying 72 percent
higher rates than upstate homeowners rather than 250 to 400 percent
It leads Hanson to wonder if coastal Alabama is not subsidizing upstate
Alabama in this regard.
"There is strong circumstantial evidence that we're not more expensive
that the rest of the state or not that much more expensive," Hanson
As for the perception that coastal Alabama is all about rich beachfront
property owners, Hanson said Billy Dawkins and his ailing wife do not
fit that profile.
Some of the members of Baldwin County's legislative delegation have in
recent meetings with HHII arrived at what Hanson calls "creative ideas
that would significantly lower our premiums if passed." These will be
discussed and described at HHII's Nov. 10 meeting at The Gathering Place
at Spanish Fort United Methodist Church at 7 p.m.
Other bills HHII is drafting would require that premium rates not vary
by more than 50 percent throughout the state; another sets the limit at
100 percent. These model bills have received mixed reaction from the
Baldwin County legislative delegation, according to HHII.
Representatives Randy Davis and Steve McMillan said the model bills
would reduce rates along the coast but would be difficult to pass. Rep.
Joe Faust has gone on record as saying he would pre-file some of the
bills, one being the transparency bill, another a bill calling for a
task force that would explore a Southeastern States insurance compact
that would form a special insurance district for the coast. Pittman said
he needs to see more details on the bills.
Asked this week about his assessment of HHII, Ragan Ingram said,
"They're concerned and working hard and making their voices heard ... .
They have a right to be concerned and involved."
But Ingram said any ideas of taking insurance rates back to pre-Ivan
levels isn't going to happen.
Ingram pointed out something that he said HHII wants that isn't
"do-able": "Charging the same rate in Foley and Scottsboro for wind
insurance isn't feasible."
For Hanson, however, it's the numbers again: "They're assuming we're
more expensive on wind and hail; that's why we want the numbers. We're
not 300 percent more expensive.
"The people that are approving (rates) and supposed to be protecting us
won't give us the information so we can see why they approved it,"
DOI is, in Ingram's words, trying to negotiate with insurance companies
that don't want to renew policies along the coast.
"We work on behalf of consumers and continue to try and bring in more
competition," he said.
Meanwhile, Billy Dawkins said he and his wife are just trying to
"Maybe we can get the insurance rates down, and we can live normal lives
maybe then. I just can't give up my wife on account of insurance. That's
just important, and we're gonna do our best to keep her as long as we