General information about insurance and insurance companies

9 States with the Most Dangerous Weather

7/27/2015 article by Alexander Kent in 24/7 Wall Street

Despite a historically slow start to tornado season in 2015, more than 400 tornadoes were reported in May alone, roughly double the average in recent years. May was also the second most active tornado month since 1950. While some states are more susceptible to violent weather than others, all states could be struck by a natural disaster at any time. Using data from the National Weather Service (NWS), 24/7 Wall St. reviewed weather-related fatalities from 2010 through 2014. Nationally, 2,950 people died from natural disasters over that time, or fewer than two people per million residents in each of the five years reviewed. In Alabama, 12 people died per one million residents over that time, the most of any state. These are the states with the most dangerous weather. Click here to see the states with the most dangerous weather. Tornadoes are some of the most fatal natural disasters. From 2010 through 2014, twisters killed 723 people nationally, or 25% of all weather-related deaths. Oklahoma, the state with the seventh most weather-related fatalities, lies in the heart of Tornado Alley, which runs north from Texas to North Dakota and is the most active tornado region in the world. At least 57 Oklahomans died from tornadoes from 2010 through 2014, 49 of them in 2013 alone. States outside of Tornado Alley are also susceptible to twisters. Alabama, the state with by far the most weather-related fatalities over the period reviewed, was hit in 2011 with 62 tornadoes in a single day, killing 250 people and causing roughly $3 billion in insured losses. This was the second most costly tornado in U.S. history. Extreme temperatures — both hot and cold — are another major contributor to weather-related fatalities across the country. Nationally, nearly 600 people died from heat stroke over the five-year period reviewed. Nevada, the majority of which is covered in desert, accounted for a substantial share of heat-related deaths across the country. Flooding can also cause many fatalities. Flooding particularly impacts northern states such as Wyoming and Montana, where warmer spring temperatures can cause snow to melt faster and overrun riverbanks and levees. Heavy rainfall can also cause floods. In addition to being deadly, natural disasters are also responsible for billions of dollars in crop and property damage each year. From 2010 through 2014, severe weather resulted in more than $93 billion of damage, the bulk of which was to properties. In each year from 2010 through 2014, fewer than 600 people died as a result of severe weather. Often, a single, extremely deadly storm can have an outsized effect on a state’s weather-related fatality rate. This was likely the case in Tennessee and Mississippi, which were each hit hard by a single storm over that time, despite having relatively few weather-related deaths during most of the period. To determine the states with the most dangerous weather, 24/7 Wall St. compiled data from the National Weather Service on total weather-related fatalities for each year from 2010 through 2014. Because many of the numbers are small and susceptible to large fluctuations, our rank is based on the annual average number of weather-related deaths over the five-year period reviewed. Using population figures from the U.S. Census Bureau, we calculated severe weather fatalities per 1 million residents. Also from the National Weather Service we reviewed the total value of damage caused by natural disasters, as well as breakdowns of the kind of weather responsible for the death: extreme temperature, flooding, lightening, tornados, wind, and winter storms.

Posted 7/30/2015


Net profits in the U.S. property/casualty insurance industry increased 91.5% to $69.9 billion in 2013 compared to $36.5 billion in 2012. The surge in profits stemmed from vastly improved underwriting performance as moderate rate increases and lower catastrophe losses propelled the industry to a net underwriting gain of $20.8 billion and produced a combined ratio of 95.7% — measures not seen since 2007. In addition to the impressive underwriting performance, the industry rec- orded a net investment gain of $64.9 billion despite a pro - longed period of low interest rates that has only slightly low- ered investment yields. Policyholders’ surplus rose to $665.2 billion as net income, along with net unrealized gains of $22.9 billion were partially offset by stockholder dividends totaling $40.8 billion. The remarkable profits generated in 2013 attributed to a return on surplus of 14.6% — a ten year high. The increase in earned premiums coupled with lower incurred losses led to a 51.1% increase in net cash provided by operating activities to $58.6 billion. The industry’s li- quidity position was further strengthened by the positive cash flow and resulted in a liquidity ratio of 78.0%

Read complete NAIC report

Posted 3/13/2015

Florida's Hurricane Dry Spell Lasts

From WSJ article by Spencer Jakab

It's been nine years since a major storm made landfall but insurance buffer still looks shaky.
The fortuitous run of hurricane-free years has allowed the state to keep insurance costs artificially low for many homeowners but a devastating storm risks wiping out the cushion built up by the state owned insurer of last resort putting all insured residents on the hook for potentially many billions of dollars.

Read complete article

Posted 12/19/2014


AL Sen. Hightower, Rep. Faust and HHII, along with two members of the Alabama Department of Insurance, met with the Florida Department of Insurance on October 31, 2013. FL DOI spent almost two hours with us explaining their system. Very impressive. HHII highly commends this report to youtr attention, because it could be that the industry has tried to use smoke and mirrors and to make Florida look bad. HHII thinks FL DOI got tough and courageous and tackled the two uncontrollable elements in a serious manner.

Two members of GCECC also met with the Louisiana DOI on November 7, 2013. LA DOI basically said the same as FL and AL except LA.DOI was also concerned that the amount of properties in the coastal band could not generate enough premiums to cover the losses. They didn't think The Band could replace the the overseas reinsurance companies.

But no one has the numbers. We need that Clarity Law. The bottom line with the LA DOI, AL DOI and FL DOI; the Coastal band makes sense economically,but the challenge is the politics - and that is where the Lord will take us through. That is why we take so much time reaching out to ordinary people. Votes trump money!!

The year end report of the FL DOI's catastrophe fund gives a very good history of the organization - and every year the fund gives 10 million for mitigation grants!

Posted 11/10/2013

Study and Report to Congress on Natural Catastrophes and Insurance

The Biggert-Waters Flood Insurance Reform Act of 2012 requires the Director of the Federal Insurance Office to conduct a study and submit a report to Congress on the current state of the market for natural catastrophe insurance in the United States.

In conducting the study and issuing the report, the Director shall consult with the National Academy of Sciences, State insurance regulators, consumer organizations, representatives of the insurance and reinsurance industry, policyholders, and other organizations and experts, as appropriate. Treasury issued notice on April 23, 2013, to elicit comment from these persons, groups, and the public, to assist FIO with the study and the report.

Although the comment period was specified to close June 24, 2013, comments still seem to be being accepted on the Government website.

The request and submitted comments, some by HHII/GCECHIC members, can be viewed from here.  Many of the comments provide useful background information.

Posted 8/9/2013

Lower Payouts Likely After Tornado

Read edited version of the article which appeared May 24, 2013, in the U.S. edition of The Wall Street Journal, By BEN CASSELMAN , LESLIE SCISM and JACK NICAS

 Posted 5/29/2013


Nearly $600 Billion Surplus by Property/Casualty Insurers Dwarfs $24 Billion Losses from 9/11.  Read complete 5/8/2013 Consumer Federation of America article

Posted 5/26/2013


From Fast Fact Sheet by The Financial Services Roundtable

The property/casualty insurance industry remained solvent and strong throughout a decade (2001-2010) that contained 7 of the 10 most costly catastrophes in the United States, such as Hurricane Katrina, Hurricane Ike, and the terrorist attacks of September 11, 2001. 

The industry maintained its strength during 2011, which saw record tornado and thunderstorm losses in excess of $25 billion, including the events that devastated Tuscaloosa, Alabama and Joplin, Missouri.

 One measure of insurer strength is the policyholders' surplus, which is the difference between an insurer’s assets and liabilities and is used to determine an insurer’s capacity to underwrite risks. As of September 2011, the property/casualty insurance industry had a policyholders’ surplus of $538.6 billion. This is more than enough to cover 125 times the insured U.S. property losses from Hurricane Irene.

Read complete article

Posted 3/2/2013

A.M. Best: Auto-Insurance Stability Offsets Property-Line Volatility for Personal-Lines Insurers

From 2/8/2013 article by Phil Gusman,

More frequent and severe weather-related events are creating a volatile business environment for the property-insurance line, but favorable results in auto are offsetting some of the negative impact, leading A.M. Best to maintain a stable outlook for the personal-lines segment.

“Although property line volatility continues to be a drag on overall results, it has not materially weakened the segment’s overall capital position, and auto results continue to be stable despite some margin compression,” says A.M. Best in its latest Review/Preview analysis.

For the property line, A.M. Best says it expects more of the same with respect to the weather. “Whether it’s an issue of frequency, severity, or sometimes both, the expectation is that regardless of the underlying causes, the erratic and volatile weather patterns experienced over the past few years will continue, and significant rate increases cannot be the only action taken to stabilize results.”

The ratings agency notes that carriers are, in fact, thinking beyond just rate increases, implementing risk-management initiatives such as mandatory wind/hail deductibles, percentage hurricane deductibles, and roof limitations based on the roof’s age and condition. “In addition, improved geocoding, greater understanding of risk concentrations and adherence to stricter underwriting guidelines has partially mitigated overall losses,” A.M. Best says.

Read complete article here

Posted 2/16/2013


by Paige St. John, Miami Herald Tribune

For five years, Floridians have struggled to fix the state's property insurance system, ricocheting between attempts to appease the industry and punish it.

They've seen premiums rise as much as 350 percent on the coast and witnessed the cancellation of 2 million policies. Thousands of homeowners now can only find insurance from a state pool that many believe could not pay its bills after a major hurricane.

Despite no hurricanes in five years, Florida insurers are demanding yet more money from homeowners. At the same time, the capital that insurers have on hand to pay claims has shrunk.

The Herald-Tribune spent more than a year examining the Florida insurance market in an attempt to find out why. These stories and applications are the result.

Read the complete investigative series here

Posted 12/30/2012

Sandy's hit may be softened by insurance payments

By John W. Schoen, NBC News, 10/30/2012

The .  . cost of losses from physical damage and business interruption (will be) offset by the upcoming flood of payments from insurance claims.

.  .  .
The money to pay for all this will be drawn from the roughly $500 billion in capital accumulated by the global insurance industry through premiums collected in years past.
Some insurers may take a hit on their earnings from payouts, and the cost will ultimately be made up with future premiums, which may rise to cover Sandy-related claims. Much of the burden will eventually fall to the large global reinsurers, the companies that insure insurers, most of which are based in Europe.

Read complete article here

Posted 10/31/2012

Lloyd’s Reports Strong First Half;
Says Underwriting Discipline ‘Top Priority’

Extracted from 9/26/2012 article by Mark E. Ruquet,

Lloyd’s says its 2012 half-year net income nearly doubled compared to last year because of benign catastrophe activity, but the insurance market warned that loss events in the second half of the year could still weigh on year-end results.

“I am highly conscious that I am writing this during the Atlantic windstorm season,” says John Nelson, chairman, in a statement. “Nevertheless, this is our most profitable first six months in five years.”

In a report released today, Lloyd’s says that the “strong figures” were “the result of a benign climate with just a few major events.”  Nelson adds that the syndicates had “limited exposure” to U.S. tornadoes and U.K. floods this year. “However, we cannot count on an extended period of low claims activity lasting until the end of 2012,” he says, adding that the markets should also not rely on investments “to make up for underwriting deficits.”

Nelson says underwriting discipline remained “the top priority” through the first half of the year, and attention to underwriting profit must remain the focus of the markets through the end of the year.

Richard Ward, chief executive officer of Lloyd’s says premium income increase was driven by price hardening in some lines of some business and inflation in insured values. “I am confident this growth is consistent with the market taking a prudent approach to underwriting in current conditions,” says Ward.

Lloyd’s reports net incurred claims were down 32 percent,  while gross written premium was up 10 percent over last year.

Read original article

 Posted 9/27/2012

New Study: Insurance Industry Creates Insurance Crisis Harming Their Policyholders

Americans for Insurance Reform (AIR), a coalition of nearly 100 consumer and public interest groups representing more than 50 million people, has produced a major new study called “Repeat Offenders: How The Insurance Industry Manufactures Crises And Harms America.” The study exposes how the property/casualty insurance industry creates periodic crises where insurance becomes unaffordable or unavailable for everyone from doctors to small businesses to local governments. These crises are known as “hard markets.”

Written by J. Robert Hunter and Joanne Doroshow[1] , Repeat Offenders finds that in the last few months, industry executives have been pushing the industry, including pressuring their own competitors, to start raising rates again for businesses and professionals, setting the stage for a new liability insurance crisis in America.

“We have asked insurance regulators to stop earlier crises but they have balked and not acted. This time, they must act to stop unwarranted price gouging,” said Hunter.

Repeat Offenders finds that hard markets, when premiums suddenly skyrocket as they have done three times in the past 35 years, are caused by “a combination of the industry’s own boom and bust economic cycle, anti-competitive (yet legal) underwriting practices, unique and opaque accounting policies, and virtually unchecked power when it comes to regulation of insurance rates.” Moreover, say the authors, “while the existence of this self-made cycle is clear to insurance industry insiders, insurers often publicly deny the cycle’s existence while their lobbyists try to take advantage of skyrocketing rates to push for so-called ‘tort reform.’” However, they say, “these cycles are national in scope and occur in every state irrespective of a state’s ‘tort’ law. Because the legal system is not responsible for creating hard markets, enactment of so-called ‘tort reform’ has done nothing to prevent them.” The authors quote numerous insurance insiders freely discussing this cycle and never referencing lawsuits or tort system costs as a cause for rate hikes.

Co-author Joanne Doroshow said, “Businesses in this country have paid and will continue to pay dearly for this industry’s mismanagement and lack of unaccountability. Insurance executives get away with pointing their fingers everywhere but at their own actions. This country has had enough of the insurance industry blame game and the endless cycle and the periodic crises that accompany it. Remedies that do not specifically address the insurance industry’s practices will fail to stop these volcanic price jumps, which are threatening the country once again.”

Repeat Offenders also finds that:

This country has been in a “soft” insurance market since 2006, with rates stable and dropping in every state whether or not “tort reforms” have been enacted. However, since early 2011, the insurance industry has been trying to push the country into a new hard market.

Hurricane Irene in late August 2011, which was greatly hyped by the Weather Channel but wasn’t nearly the catastrophe that was expected, has been used by insurance industry representatives to push the country into a new hard market. This is despite the fact that the industry is perfectly able to handle those claims in addition to having stored away excess profits for decades so that today, it is in an all-time safe position. Creation of a hard market now would be purely for the purpose of price-gouging buyers of insurance, particularly commercial lines insureds.

Over the last few months in particular, industry executives – including unregulated foreign reinsurers – have been boldly declaring to the entire industry that it is time to end the soft market (including pressuring their own competitors to start raising rates), setting the stage for a new liability insurance crisis in this country.

Doroshow said that the group is sending the report to all 50 state insurance commissioners, the new Federal Insurance Office and key members of Congress, hoping for urgent action. AIR is asking for:

Meaningful insurance data disclosure to state authorities, allowing officials to substantiate or refute allegations about the financial health of the industry and the civil justice system.

States to enact stronger regulation and oversight of the industry and to repeal anti-competitive laws.

Congress to repeal the federal anti-trust exemption under the McCarran-Ferguson Act and at a minimum, the new Federal Insurance Office (FIO) to review the impact of the McCarran-Ferguson Act on consumers.

A full copy of the report can be found here.

[1] Hunter is Director of Insurance for the Consumer Federation of America, former Texas Insurance Commissioner and Federal Insurance Administrator. Doroshow is Executive Director of the Center for Justice & Democracy at New York Law School ____________________________________________________________________________ Americans for Insurance Reform is a coalition of nearly 100 consumer groups from around the country that works to strengthen state oversight of insurance industry practices. AIR is not connected to any trial lawyer or business group.

Posted 9/11/2012


Read this write-up by an Independent Accounting Professional of her analysis of financial terms used by the insurance industry.

Posted 4/17/2012

Insurers pay at least $2.2 billion in claims from
Alabama tornadoes

Read 12/28/2011 Birmingham News article by Robin DeMonia

Insurers have paid at least $2.2 billion in claims arising from the April tornado outbreak in Alabama, and more than 2,500 claims are still pending eight months after the storms, the Alabama Department of Insurance said.

The figures include amounts that insurance companies regulated by the state have paid for homes, cars, businesses and other property damaged on April 27. They do not include claims paid by companies such as Lloyd's of London, which insure some Alabama property but are not regulated by the state.

If all claims were resolved and counted, state insurance officials said the total would probably approach $3 billion.

"These numbers are not surprising to us," said State Insurance Commissioner Jim Ridling. "They fall in line with the estimates we have seen."

To date, 117,400 claims have been filed, and 2,600 are still open. The insurance department said 9,400 claims weren't filed until June or later.

Posted 1/6/2012 (Hat tip to Stan Virden)

Disaster Losses Hit Record Levels in 2011

From 12/16/2011 WSJ article by Erik Holm & Leslie Scism

The disasters that plagued the globe this year will send 2011 into the record books as the most costly year for catastrophes on record.  Japan's powerful tsunami, earthquakes in New Zealand, floods in Thailand and a series of severe tornadoes in the U.S. all contributed to $350 billion in disaster losses, according to a new estimate from reinsurance company Swiss Re AG.

Insurance and reinsurance companies are likely to shoulder about $108 billion of the losses, though the tally could creep higher, Swiss Re said. While insurers absorbed less than one-third of the year's disasters, 2011 is the second-most costly year for the insurance industry, behind only 2005, when Hurricanes Katrina, Rita and Wilma helped push the global tally to $123 billion.

In response to the near-record claims this year, insurers are increasing how much they charge for catastrophe coverage around the globe, re-evaluating their exposure to disaster-prone areas, and tightening policy terms. How much ultimately will be passed on to U.S. consumers, however, is unclear, as most states regulate home-insurance rates. Disaster modelers are studying the science behind each calamity to improve their predictions of losses for future events, and underwriters are examining their clients' supply chains for signs of weakness.

Read  complete article

Posted 12/18/2011

Carriers Understand Market Challenges; Discuss Strategies Beyond Pricing

From 10/6/2011 article by Mark E. Ruquet,

Insurance carriers understand that there are no easy answers to the earnings challenge the industry is facing, and some of them believe that competing on price alone is not the answer to finding new commercial markets.

Paul Krump, president of commercial and specialty lines for Chubb Group of Insurance Companies, says insurers are experiencing significant pressure on their business.

He says the current situation is “corrosive” for the industry as it deals with a significant catastrophe year that is eating away at reserves. Earnings have seen additional erosion with an investment environment that is not producing significant returns.

Insurers are feeling pressure to get rate through underwriting, but Krump cautions that the industry needs to balance that desire against the objectives of its policyholders.

“We must not lose sight of our primary mission—to take care of our customers, but we must also take care of ourselves,” says Krump.

Insurers, he says, must not add to the angst clients are experiencing in these very turbulent economic times.  “They are seeking some semblance of certainty in uncertain times,” Krump says.

Read complete article

Posted 10/7/2011

Your problem, not ours

Northen Alabama Counties still don't understand how insurance crisis affects them

It is wrong for the rest of Alabama to “share the pain” of high homeowners’ insurance costs with residents of south Alabama.

So says conservative talk show host Dale Jackson, of WVNN radio in Athens.

“What they’re looking at is people in north Alabama paying more so people in south Alabama who live on the beaches can pay less,” Jackson said in a “Daily Doctrine” message to his listeners on Friday.

“Here’s how insurance works, folks. You pay on the risk. And if I live in north Alabama, the risk of hurricanes is not as good as the risk in south Alabama. So those people should pay more, not me.”

From MPR's George Talbot 9/26 column on

posted 9/26/2011

Alabama's suicide rate reaches 51-year high

After five years of steady growth, Alabama's suicide rate is at its highest point since 1960, outpacing the national rate and prompting health experts to call for a public discussion of how suicide can be prevented.  The suicide rate in Mobile and Baldwin counties increased 33 percent after Katrina, said Debra Hodges, research unit director for the ADPH's Injury Prevention Branch.

Suicide is almost always linked to a mental illness and often substance abuse and when job loss or mortgage foreclosure is added to the mix, a "perfect storm" of suicide risk is created, said Judith Harrington, president of the Alabama Suicide Prevention and Resource Coalition. "There is a definite connection with the economy" and suicide, Hodges said. "You lose your job, your home is foreclosed on ... Life is suddenly uncertain," Hodges said

From 7/10/2011 article by Jeremy Gray in The Birmingham News

Posted 7/12/2011

Next Bank Scandal? Forced-Place Homeowners Insurance

MoneyTalkNews article by Stacy Johnson (11/15/2010)

If you don’t buy insurance on your house, your mortgage company can legally do it for you. This makes sense, because your home is the collateral for your home loan – without insurance, an accident or natural disaster could wipe out the investment. So your lender insures you’ve got insurance, and if you don’t, they buy it and bill you for the premiums.

It’s called forced-place insurance, and it’s been around for a long time. But some are now accusing lenders of using these policies to generate excessive profits at the expense of hapless homeowners. And thanks to the huge volume of foreclosures and the massive amount of securitized mortgages, these inflated policies could also be impacting Wall Street investments, which in turn might trickle down to Main Street mutual funds.

To better understand the issue and its potential effect on both homeowners and investors, meet a homeowner who was billed $33,000 for one year’s worth of forced-place homeowner’s insurance – insurance that could have been purchased for $4,000. Check out the following news story, then meet me on the other side for more.

Read earlier post on forced-place insurance

Posted 6/29/2011

Insurance has to be a statewide issue now

By Press-Register Editorial Board, May 29, 2011 - Read original item


There's no getting around the fact that the tornado damage in northern Alabama will change the conversation about storm risk and homeowners insurance in the state.

It is clear that the risk of catastrophic damage from weather can no longer be relegated to the coastal areas. Neither should the conversation be.

In fact, now is the time for state leaders to ramp up the dialogue about ways to build stronger so that more people can survive storms when they hit.

Coastal leaders and lawmakers are already pressing for related insurance reform in Montgomery. One of their bills would offer an income-tax deduction to property owners who retrofit their homes to withstand storms. Another would create an insurance fraud unit within the state Department of Insurance.

Next, state leaders can address the fact that Alabama sorely needs a statewide building code.   Continued:

Posted 6/7/2011


The state average for full homeowners’ insurance coverage is $854 – wind, hail, fire, liability and a small deductible. The coastal counties pay 200 – 500% higher premiums, and much higher deductibles.

During the last century we were charged at about the state average. The current crisis results from suddenly treating coastal counties dramatically different from the rest of the state.

The DOI has no historical data, by locality, to support its approval of such differentials.

If you own your house, and have no liquid assets to rebuild, you’re not self-insured if you have dropped your wind-and-hail coverage, you’re gambling!

If you have a mortgage and do not have the insurance deductible in the bank, you are functionally un-insured and still paying the premiums!

Historically, upstate Alabama experiences 500 tornadoes for every one hurricane.

Sixty-five of Alabama’s 67 counties were declared disaster counties in need of taxpayer and insurance funds after Hurricane Ivan struck the coastal counties. Hurricanes don’t stop at county lines.

Coastal counties pay well above the state average for fire insurance!

The Alabama State Fire Marshal said there are fewer fires in south Alabama than in the northern part of the state.

The Alabama Department of Insurance has publicly acknowledged that insurance companies charge higher fire premiums in southwest Alabama. An officer of the department said publicly that the premium differences are not based on actuarial findings.

Revised 6/2/2011




Updated 8/7/2011


This web site tries to keep you informed of the latest insurance company actions and political happenings.  But HHII is about more than dropped coverage, premium increases, and legislative bills.  It is about individual homeowners.  The pain, frustration, and anger they feel when faced with impossible choices.

Read two recent homeowner stories. 
Then read Sr. Judith Smits' essay on Insurance & Morality.

We are not helpless.  Working together, we can bring about a just resolution.  Join HHII and add your hearts, minds, and voices to this grass roots effort.

Posted 4/14/2011


Read Citizens for Homeowners Insurance Reform recommendations on how to get to lower insurance rates .

Posted 1/14/2011


If a careless borrower allows her homeowners insurance policy to lapse, it can cue the servicer to purchase its own policy, at a premium two to three times higher than that paid by the borrower, from an insurer with whom the servicer has a financial relationship. The same thing can happen when a loan is in default, in which case the servicer profits at the expense of the investor.

Read more in Motley Fool 11/11/2010 article

Posted 11/16/2010

Insurance Discount for Fortified Buildings Makes Progress

HHII has not been pushing this legislation because it does not offer immediate premium reductions or coverage guarantees for existing homes.

Several admitted carriers will be increasing the Fortified credits to as high as 50%. Two admitted carriers are willing to insure new clients that meet the Fortified standards. One major carrier is offering the Fortified program nationwide, and is crediting Alabama as the first state to endorse IBHS Fortified for Existing Homes program. One non-admitted carrier will be issuing wind and hail only policy that will compete with AIUA starting May 10th. Have a new A rated carrier (Non-Admitted) entering the state next week. They are willing to insure several thousand new policies. Mobile Bay will not be an issue. They require detailed inspection but will give credits for Fortified homes even though they are not required. More carriers looking to enter market with the passage of seasoning bill. Fortified Habitat Open House is scheduled for May 27th., 2010

To find more information concerning insurance discounts applicable to fortified buildings and how to apply, go to the undernoted links.
Requirements to qualify as fortified home

Alabama insurance discount benchmarks

Application Form

Originally posted 5/2010; Revised & reposted 11/10/2010

Citizens in Massachusetts want Homeowners' Insurance Reform!

HHII is linking with other coastal communities to help law-makers explore multi-state Coastal Counties solutions.  Read related email and about the Homeowners' Insurance Reform Massachusetts wants.

Edited & reposted 10/16/2010


Extract from 2/17/2012 paper by J. Robert Hunter,
Director of Insurance Consumer Federation of America

How is it possible that the property-casualty industry’s surplus would sharply increase as the number and severity of catastrophic weather events also increases? The primary reason is that the insurers have 'mastered' hurricanes by shifting the lion’s share of the risk and costs to consumers and taxpayers. In other words, property-casualty insurers have paradoxically emerged as masters of risk avoidance, rather than continuing their historic role of risk taking.

Read complete paper to understand how insurers have shifted risks and costs associated with weather catastophes to consumers and taxpayers

Posted 7/29/2015


This national publication highlights a different state in each issue and includes reference to the work of HHII. There is a lot of data to digest. Check out the article on reinsurance. If the cost is dropping, why have we not seen a nice reduction in our wind insurance? Reinsurance is 60% of coastal AL's wind premium. That is why we need the Coastal Band!

Posted 2/8/2015


The evidence in this case is that the net cost of reinsurance is a large portion of the indicated rate, at approximately 22.1%. It is the second biggest component of the indicated base rate next to the actual non-hurricane losses at 32.1%. The net cost, consisting of reinsurer expenses and profit but not reimbursement to primary insurance companies for hurricane losses, is intended to allow companies to purchase reinsurance to cover some portion of the total hurricane losses. The net cost amount proposed by the Bureau is actually almost double the amount that the Bureau has included for hurricane losses (which is 11.9% of the indicated base rate). As noted previously, the Commissioner has found the hurricane loss projections to be overstated. Given the magnitude of the impact that this one factor has on the indicated rates, it would be expected that the documentation and testimony in support of the net cost would be complete and meticulous. Such was not the case with this filing. All three Department witnesses complained about the lack of documentation and provided numerous examples where documentation was lacking.


Read the complete 10/10/2014 report

Posted 6/16/2015


NC DOI Commissioner recently called for Hearing on Homeowners Insurance Rate Request after initial review raises concerns that the rate increases requested by the insurance companies may be excessive and unfairly discriminatory.

NCDOI experts believe the requested rate increases are not justified.

Among NCDOI's concerns are:

• The filing uses hypothetical data, rather than actual data, when calculating costs including those for the net costs of reinsurance and trended modeled hurricane loss costs.

• The filing lacks necessary data, documentation and explanations to meet statutory burden of proof for rate increases.

• Old data is used in the filing when more when more recent data should be available and included in the analysis.

If only Commissioner Ridling and the AL DOI would react to similar complaints from HHII  and others in the same proactive manner!

Go to NCDOI news for more information

Posted 5/23/2014

Louisiana Hurricane Catastrophe Fund Analysis

Paragon Strategic Solutions Inc. prepared this report with the goal of providing an objective analysis to assist the LRA-SF in structuring and evaluating the cost and effectiveness of a potential state hurricane catastrophe fund. This report is intended to provide interested parties with the information required to make an informed decision regarding these matters.

Basic Considerations

There are four basic considerations that drive the feasibility and structure of a hurricane catastrophe fund:

1. What is the maximum dollars of capacity that can be economically supported?

2. What is the size and likelihood of potential hurricane losses to the state?

3. What is the cost (that is, annual premium and potential assessments) of the fund?

4. What is a fair way to allocate the costs of the fund to the policyholders and the citizens of the state?

Posted 10/15/2013

Jury finds State Farm committed fraud
against federal government

From 4/8/2013 post by Anita Lee on Sun

A federal jury has found State Farm Fire and Casualty Co. committed fraud against the federal government and submitted a false record to support fraud after Hurricane Katrina. The decision potentially opens for examination thousands of post-Katrina flood claims State Farm adjusted and paid before reimbursement by the National Flood Insurance Program.

Before opening their case to other claims, former insurance adjusters Kerri and Cori Rigsby first had to prove State Farm committed fraud involving one property.

The Rigsbys presented evidence that State Farm paid policy limits of $250,000 for flood damage to the house, even though wind covered under the insurance company's policy was responsible for the loss. By charging the National Flood Insurance Program for the loss, State Farm minimized what it owed for wind damage.  The jury decided State Farm overcharged NFIP the full $250,000.

Read complete Sun Herald post here

Posted 4/10/2013

State Farm 2012 Net Quadruples
Despite $700 Million in Sandy Payouts

From March 01, 2013 Best's News Service article by Michael Buck,
senior associate editor, BestWeek

State Farm's after-tax net income surged in 2012 to $3.2 billion, from $800 million in 2011, as better underwriting performance helped to shore up the bottom line.

The combined underwriting loss of its property/casualty businesses was $1.7 billion, down from $4.5 billion in 2011, it said in a statement. The company has paid out slightly more than $700 million in Hurricane Sandy-related claims to date, said State Farm spokesman Scott Callicott.

 Earned premium in the homeowners, commercial multiperil and other segment was $18.3 billion, up 1.5% from the prior year.

 State Farm Fire and Casualty Co., which is State Farm's primary property writer, had a 2012 nine-month combined ratio of 103.5, compared with 129.8 for the same period in 2011, according to BestLink.

State Farm companies in 2012 filed for homeowners rate increases in the upper single and double digits, according to Best's State Rate Database. Two of the larger increases are one that State Farm Fire and Casualty was approved in May in Mississippi for an overall 12.9% homeowners rate increase. The same subsidiary filed an 8% homeowners rate increase in February in Colorado. State Farm also raised rates on its manufactured housing product in 2012 in several states. State Farm increased its overall homeowners rate level by 5.8% in 2012.

State Farm’s overall homeowners rate rose by 3.6% in 2011 and by 7.3% in 2010." State Farm recently said it is weighing its options in Louisiana after the state's insurance commissioner rejected a bid for a 16.6% homeowners rate increase (Best's News Service, Jan. 29, 2013). The company had also proposed a regional homeowners storm deductible plan in Louisiana, which was also rejected by regulators.

Posted 3/5/2013

How Sandy Affects the Nation

Channel 15 TV 11/16/2012 story

Superstorm Sandy may have directly hit the northeast but its impacts could be felt here on the Gulf Coast in your homeowners insurance. Legislators from across the country met in Point Clear Friday for the National Conference of Insurance Legislators. Governor Robert Bentley spoke at the luncheon.

After the storms comes the reality. "No one is immune from a natural disaster and we are all finding that out. So if states, when they get together and say we're immune so we don't want to participate, they're wrong, " said New York State Senator Neil Breslin. Breslin along with dozens of other lawmakers from across the country were in Baldwin County today talking insurance.

Alabama's Governor says he's expecting fine money from the BP oil spill to help offset costs. "Which are mitigation grants if we get money through the Restore Act to help homeowners fortify their homes. They can save up to 35% on their homeowners insurance to help them do that and if we get grants especially for low income people, " said Governor Bentley.

All agree it will take reform for Alabama and reform for the country. After all, with "Superstorm Sandy" happening up north we now know hurricanes are not just a Gulf Coast problem. "All of this really starts much before a claim occurs and the payments have to be made. It really starts at what can we do to prevent losses in the first place and insurers are working hard on that in something called the Insurance Institute for Business and Home Safety working on better housing designs and things you can do to retro fit, " said David Snyder with Property Casualty Insurers.

Alabama recently passed a transparency law requiring insurance companies to itemize and disclose why and how rates are set. The Governor says it's one reform that should help home owners understand the process better.

Click here to watch related video

Posted 11/20/2012

P&C Net Income Surges in First Half

Extracted from 10/4/2012 article by Phil Gusman,

Property and casualty insurers saw their first-half net income climb collectively by over 245 percent in 2012 compared to the prior year, as the industry benefited from premium growth and a sharp drop in catastrophe losses, but experts offered mixed opinions on the larger meaning of the figures.

“While insurers’ overall results for first-half 2012 are certainly much better than their results for first-half 2011, insurers’ overall rate of return remains subpar compared with long-term historical norms, and insurers now need much better underwriting results just to be as profitable as they were in the past,” says Michael R. Murray, ISO’s assistant vice president for financial analysis.

ISO, the Property Casualty Insurers Association of America and the Insurance Information Institute released figures on the industry’s first-half performance, finding that net income for the period was $16.4 billion, compared to $4.8 billion a year ago.

Net written premiums climbed 3.6 percent to $226.7 billion in 2012’s first half, while net underwriting losses eased from $24.1 billion in 2011 to $7 billion this year.

According to ISO President Robert Hartwig, It is possible that the P&C insurance industry in 2012 could match or even surpass the post-crisis profit peak of $35.2 billion reached in 2010.

Read original article

Posted 10/4/2012

Isaac Losses Won’t Strongly Impact P/C Industry in Louisiana

From 9/14/2012 Insurance Journal article by Stephanie K. Jones

While insured losses in the United States from Hurricane Isaac likely will fall between $1 billion and $2 billion, according to some risk management experts, the storm’s impact will not severely impact the property/casualty insurance industry in Louisiana, the state’s top insurance regulator says.

The $1 billion to $2 billion estimate by Risk Management Solutions (RMS) excludes rainfall driven flood losses and all National Flood Insurance Program losses, which are likely to be high in Louisiana, according to Insurance Commissioner Jim Donelon.

Donelon said it is possible insured losses in Louisiana could come in at around half a billion dollars on the low end. However, he added, the high side estimate is around $1.5 billion. “Using the middle ground of a billion, that comes in just under half of what Hurricane Gustav was in Louisiana four years ago, 2008,” Donelon pointed out.

Dr. Christine Ziehmann, director of Model Product Management at RMS, noted: “From a wind-damage perspective, Isaac made landfall in the same area where Katrina and also Gustav made landfall in 2005 and 2008, respectively. … Both these previous events impacted the building stock and eradicated a large portion of very low-quality roofs and buildings, which could mean that the wind losses fall into the lower end of the modeled range.”

Donelon said he doesn’t expect Isaac losses to greatly impact the overall property/casualty insurance industry in his state. “The expectation is that [Isaac] would have minimum, if any, effect on our market. Gustav did not affect our market one way or the other, neither from an affordability cost point of view nor from an availability,” perspective, Donelon said.

Posted 9/16/2012

ALFA dog

With thanks to JDCrowe, MPR, 4/10/2012
Read original

As Alabama slugs along in the general direction of homeowners insurance reform, we can count on the big dog on the porch - Alabama Farmers Federation - to bark and balk at every sign of progress. Most of this gnashing of teeth and whispering to lawmakers will occur quietly behind the barn.

In the end, they'll bend it to suit their needs - or kill it.

ALFA would rather suck the blood of homeowners they pretend to protect than participate in a sensible reform plan that would benefit the whole state.

Jerry Newby, ALFA president, is portrayed here. Pretty happy lookin' vampire, right?  Remember that grin when you make an insurance or wind pool payment.

Posted 4/10/2012

Ignore the bully and unite for insurance reform

Thanks to Press-Register Editorial Board, 4/20/2012

ALFA SHOWED its true stripes this week when it threw the first punch in a fight that resulted in the failure of five insurance reform bills. Then the heavyweight lobby had the gall to be indignant about the whole thing. Alfa spokesman Jeff Helms told a reporter that the responsibility for the bills’ failure should lie with the sponsor, who “knew there were concerns about a bill, and yet insisted that that be put into the mix.” In other words, the lawmaker didn’t ask Alfa first.

Here’s how it happened: South Alabama senators introduced a group of five insurance reform bills, four of which were supposedly supported by Alfa. When Alfa killed the one measure it did oppose, lawmakers retaliated by voting down another bill that would have benefited Alfa’s investments. The company then got the last word by orchestrating a filibuster that ended consideration of the remaining three bills. In essence, Alfa didn’t get its way, so it took the ball and headed home.

As unbelievable as it may seem, the fistfight began over an innocuous bill that would have required insurers to notify customers of the premium discounts available on homes built to higher standards. The company claims the bill would have meant expensive changes to its computer systems. More likely, Alfa just wants to send the message that it doesn’t take its marching orders from anyone, especially legislators.

Where does this leave the average Alabama homeowner? With little hope of insurance reform during the regular session — and stuck with premiums he or she can ill afford. After all, how does an individual stand a chance against a bully like Alfa?

Perhaps what’s needed is a bigger contender — the bully pulpit of the governor’s office. Gov. Robert Bentley can call lawmakers into special session and keep them there until they approve insurance reform once and for all.

Interestingly enough, the lawmakers doing Alfa’s bidding in the Senate represent areas of the state that are just as vulnerable to storm damage — and escalating insurance premiums — as south Alabama. The filibuster gang included Sens. Tom Whatley, R-Auburn; Roger Bedford, D-Russellville; and Clay Scofield, R-Guntersville. By carrying water for Alfa, these lawmakers did their constituents a grave disservice.

Alabama desperately needs insurance reform — even reform that is stronger than the mild slate of bills offered in the Senate. But as long as Alfa is allowed to flex its muscle at will, there won’t be any relief in sight for homeowners.

Posted 4/20/2012

Insurers keep close eye on extreme weather report

On 3/28/2012 the Intergovernmental Panel on Climate Change released a new report on extreme weather. Among the groups watching closely: the insurance industry. Click link to hear Marketplace's Adriene Hill report.

Updated 4/2/2012


J. Robert Hunter, Director of Insurance Consumer Federation of America, has issued this report on how insurers have shifted risk and costs associated with weather catastrophes to consumers and taxpayers.  More evidence that the insurance industries' solution to the homeowners' insurance crisis is to eliminate their risk!  HHII has asked Dr. Hunter to give a presentation at the Commission sometime soon.

Posted 2/23/2012

Irene on Path to Test Coffers of State-Run Insurers


Hurricane Irene could be a major test of "insurers of last resort" created by U.S. states to protect homeowners marooned by private insurers.

Of the 14 U.S. states in Irene's projected path as of late Wednesday, at least 10 of them run insurance pools for homes in vulnerable areas. Those insurers, which have ballooned in size in recent years, now have about 677,000 policyholders and overall exposure of $196.2 billion, according to the states.

But in many states, such pools rely on homeowners far from the coast to pay for any funding shortfalls if a mega-storm drains the pool's capital. In Florida, for example, people insuring their cars, boats and small businesses can also get hit with surcharges to help pay for the state pool's hurricane claims.

Read complete 8/25/2011 WSJ article

Posted 8/25/2011

Policyholder complaints after tornadoes show
discontent with delays, disputes over damage

By Jeff Amy, Press-Register, Sunday, August 21, 2011

Larry Kidd was getting a little frustrated.

His neighbors in Santuck were already making repairs after a tornado hit the Elmore County hamlet on April 27. Kidd was still haggling with Allstate Corp. over how much money he would get to fix the roof, siding, windows and other parts of his 1,900-square-foot home.

"We were not getting any response back," Kidd said, explaining that adjusters working for the Northbrook, Ill., insurer weren't replying to emails.

 So on June 21, he contacted the Alabama Department of Insurance, one of at least 475 homeowners to complain to the regulator in the wake of the April storms.

Kidd was not the only unhappy Allstate policyholder. Among Alabama's largest insurers, Allstate received more complaints than its market share would have predicted, according to a Press-Register analysis of complaint data.

 Read complete MPR article here

Posted 8/22/2011


8 representatives from HHII met with Judge Russell and Judge Whetstone on Friday, July 22, 2011.  They graciously gave us two hours of their time and we had a candid discussion on the possibilities of captives.
Judge Russell is strongly committed to developing two captive insurance entities. 

The primary question remains: will these two entities fix the problem for all people.  At the moment, the answer is seems to be No, but the design of the entity is in progress. Properly designed, some of us think it could fix the coastal insurance problem and the Judge seemed open to our suggestion.

Judge Russell also expressed support of the Clarity Bill.

He is in favor of procedural rules that would enhance conversation and dialogue at the commission -- a rolling up of our sleeves and actually working to fix the problem.

Posted 7/28/2011


The possibilities captives imply for significant reform of the housing insurance seem worth closer study, according to our conversation with national expert Robert Hunter. Judge Russell has agreed to chat with HHII some more about the specifics of the captives he has in mind. A meeting in Foley, Friday July 22 or Tuesday July 26 at 9.00 a.m. at a  location TBA is being considered. HHII has asked that the conversation explore two additions to Russel's ideas of captives:

(1) the designs should be consistent with multi-state operations;

(2) the designs should entail the possibility of official state-to-state  insurance compacts,

which was fine with him.

Posted 7/14/2011

Travelers Coastal Wind Zone Plan

AS THE 2011 hurricane season progresses, it’s time for community leaders and their elected representatives to solve the growing crisis surrounding homeowners insurance on the Gulf Coast.

One idea — which has received more attention in Mississippi than in Alabama — that deserves consideration is the Travelers Coastal Wind Zone Plan. It is a federally-guaranteed catastrophic wind insurance plan written in 2009 by the Travelers Institute, which is a think tank related to the Travelers Companies, a property casualty provider.

Don’t tune out the plan just because it is linked to the industry, though. The Travelers Plan offers promise for several reasons: It recognizes that states shouldn’t have to solve their own insurance problems alone. It also involves the insurance industry, as well as Congress and consumer groups.

Read Mobile Press-Register 6/19/2011 editorial

Posted 6/20/2011

Where Does Alabama Rank on Property & Casualty Insurance?

How free are consumers in Alabama to choose the property and casualty insurance products they want? How free are insurers to provide those products? The fourth edition of The Heartland Institute's Property & Casualty Insurance Report card finds a modest, uneven, but nonetheless real trend towards more freedom for consumers and businesses in the homeowners’ and automobile insurance realms.

Posted 7/8/2011

Investment Firm Gives Personal Lines Insurers Thumbs Up

The financial and investment banking firm Stifel Nicolaus released its “2Q11 Insurance Industry Earnings Preview,” saying that personal-lines insurers are a good place for investors because personal-auto and homeowners premium rates are continuing to increase on a year-over-year basis while the commercial-insurance market remains mired in a soft market.

Read complete article by Mark E. Ruquet,

Posted 7/8/2011

Seeking Business, States Loosen Insurance Rules

Read this May 8, 2011 article by by Mary Williams Walsh and Louise Story in New York Times to learn more about the risks associated with captive insurance companies.

Posted 6/15/2011

For Insurers, Bad  - but Not Bad Enough

Ahead of the Tape by Kelly Evans, WSJ 5/31/2011

Only in the bizarro world of insurance can a string of calamities portend good. news.

The deadly outbreak of tornadoes across the U.S. since late April is expected to cost the insurance industry more than $5 billion, according to disaster-modeling firm Eqecat. That puts weather-related losses in the U:S. so far this year in the range of $13 billion to $15 billion, three to four times a typical year. Add in catastrophes such as the earthquakes in New Zealand , and Japan, and disaster-related losses for the industry are estimated to be upward of $50 billion this year.

That eye-watering sum has spurred talk that a "hard market" - insurance talk for a time in which insurers can charge higher premiums - may finally be within reach. The industry has been mired in a soft market, marked by falling premiums, since 2004. "I think things are now bad enough to be good' enough," says Meyer Shields, an analyst at Stifel Nicolaus.

Bad enough, that is, that the industry will be forced to start raising premiums this year or early next.

That would quickly benefit such big insurance brokers as Aon Corp. and Marsh & McLennan Cos. Indeed, their shares are up more than 10% this year, roughly double the broader market.

Prominent hedge-fund manager Steve Eisman even cited the stocks as appealing at last week's Ira Sohn conference. Reinsurers should also get a lift.

But soft market conditions may prove tough to shake.

For starters, even the unusually high losses aren't expected to fully drain the roughly $74 billion in excess capital the industry had heading into the year, according to research firm Advisen. That is what makes this year's . hurricane season, which officially starts June 1, so important for insurance stocks. Any storms that generate big losses, sopping up excess capital, could force a firming of the market.

Even so, a time of higher premiums may end up being short-lived - just as it was after Hurricane Katrina in 2005. This time around, the weak economy may interfere.

"There just hasn't been much pricing power over the last couple years," says David.Bradford, Advisen executive vice president. And the bad news may not be bad enough to change that.

Posted 6/1/2011


Legislators are considering the possibility of setting up a state run captive insurance company to offer wind insurance to coastal homeowners who have been dropped by the major insurance companies.

HHII is opposed to this idea as it appears the captive company would not be required to insure all comers and would still be allowed to 'cherry pick' who it would cover.

Reserves would be funded by a 1 mil property tax increase.

Captive companies were the subject of a recent article in the New York Times, quoted in part below:

"Captives provide insurance to their parent companies, and the term originally referred to subsidiaries set up by any large company to insure the company’s own risks. Oil companies, for example, used them for years to gird for environmental claims related to infrequent but potentially high-cost events. They did so in overseas locations that offered light regulation amid little concern since the parent company was the only one at risk.

Now some states make it just as easy. And they have broadened the definition of captives so that even insurance companies can create them. This has given rise to concern that a shadow insurance industry is emerging, with less regulation and more potential debt than policyholders know, raising the possibility that some companies will find themselves without enough money to pay future claims. Critics say this is much like the shadow banking system that contributed to the financial crisis."

Read complete NYT 5/6/2011 article
Read Property Casualty 5/9/2011 rebuttal article

Posted 5/13/2011

Insurance companies have no doubts about global warming

Insurance companies are taking into account the potential for rising water levels and more aggressive hurricanes when considering rates. Marketplace's Scott Tong reports.

Read full transcript and view slideshow here

Posted 11/30/2010

Insurers set up Alabama trade association

 Stan Diel -- The Birmingham News

Many of the largest insurance companies doing business in the state have established a new nonprofit, non-lobbying trade association, the group announced today.

The Alabama Insurance Information Service, based in Montgomery, will provide information about issues related to auto, homeowners, renters, flood, earthquake and workers compensation insurance. The organization also will provide information related to consumer safety.

David Colmans, a television reporter in Birmingham in the 1960s and 1970s and most recently executive director of the Georgia Insurance Information Service, will run the organization.

The nonprofit group will work with organizations including the Insurance Institute for Highway Safety, the National Insurance Crime Bureau and state law enforcement, it said in a prepared statement.

The group's new web site,, offers free home inventory software to help homeowners catalog their possessions.

Insurance companies participating in the association include State Farm  Insurance, Alfa Insurance, Allstate Insurance Co., Progressive Insurance, and many others.

Posted 11/30/2010


Residential Insurance on the U.S. Gulf Coast
in the Aftermath of Hurricane Katrina

A Framework for Evaluating Potential Reforms
Click to read preliminary report from
A Study by the Institute for Civil Justice

This product is part of the RAND Corporation restricted draft series.  Restricted drafts present preliminary research or prepublication versions of research documents that need to be distributed outside of RAND to the client, a formal reviewer, or potential journal or book publishers. Restricted drafts have not been formally reviewed, edited, or cleared for public release.

Posted 10/21/2010

The Ten Worst Insurance Companies in America

Read who they are here

Reposted 10/18/2010

Small businesses lose Zurich insurance policies in Farmers cutback

Read 5/19/2010 MPR article here


This page last updated 11/6/2015