News items about premium increases, dropped coverage, and insurance providers

Alabama News

News from Other Gulf & Coastal States

Policy criteria is driven by computer models

I have been with USAA since 1956 and, until 2005, always had my homeowners' insurance with them. That year, I built a new home in Live Oak Village (off CR 24) and moved back Foley from Lillian. When I tried to insure my new home with USAA, I was informed the wind coverage would be through the Alabama Insurance Underwriting Assoc. This made the homeowners insurance prohibitively expensive and I switched my homeowners to State Farm. Currently, I pay around $2400/year with State Farm. USAA is still using the Alabama Insurance for wind coverage which results in annual premiums of close to $4000. I recently spoke with USAA and asked why, after 10 years with no hurricanes, plus no major hurricane damage in Foley for as long as I can remember, are they continuing with the Alabama Insurance? I also cited your analysis that coastal loses from hurricanes are $622/policy versus $722/policy for the rest of Alabama. Their response was, essentially, that their policy criteria is driven by computer models of what might happen. Based upon your analysis, coastal Alabama is subsidizing the rest of the state.

Posted 7/13/2015

Gov Bentley says 'IT IS UNFAIR the way it's done'

Extracts from Gov. Bentley's response to Charles Kettel's question on the Uncle Henry call-in show asking what he intended to do to correct the discriminatory coastal homeowners' insurance rates.

(Bentley) .  .  .  This is a major problem for this part of the state and we have worked on that and we have tried to do some things – the Clarity Act was obviously a part of that; we still work on that on a regular basis. I have two houses down here myself and I have one on the beach and I really aught to pay more right there on the beach than people inland but, you know, it is a real problem and it really is a complicated issue and I know that.  .  .  Listen, I probably have been working on this with a number of people for a number of years, and we have so many people down here who have worked so hard on it that I put together a commission to look into it and we still didn't get the answers that I would like to hear.

(Kettel) .  .  .  it is because of my experience, extremely negative experiences with my insurance company. After 37 years of no claims I was canceled, OK? And it's just, no claims and canceled arbitrarily and then being quoted insane rates, ya know that the state average is below $1000, and ya know, I can't even buy it, ya know, if I get a quote they won't sell it to me.

(Henry) We're up on a break. Charles we are going to have to run, but Governor, where do we go from here?

(Bentley) Well we need to continue, well, first of all we need to work with the coastal states and to see if there is some way that we can do somethings as far as coastal states are concerned.
And I wanted also to continue to fortify houses and we do have laws on the books that help you get as much as 35% off of your homeowners' insurance if you fortify your house. We wanted to use some of the BP money to do that, to do some mitigation grants to people so that they can do that. Maybe index it for people's income, you know, for this sort of thing.
But this, I believe is going to be a national coastal type, maybe a compact between some of the states to work on this issue. It is a very complicated issue, but I don't want the people down here to think that we don't think about this on a regular basis and we work on this on a regular basis trying to come up with a solution. IT IS UNFAIR the way its done.

Listen to full clip here (go to time 18.30)

Revised 10/22/2014

As hurricane season begins, coastal homeowners feel the pinch with climbing insurance rates

Jeff Amy has a good article for AP under this title in the Washington Post that quotes some of HHII's members.

 Posted 6/2/2013

Farmers will drop wind policies locally, hike rates statewide

From 7/30/2012 article by Ellen Mitchell, PR, at al.com

Farmers said Monday that it plans to drop coverage of more than 2,900 properties in Mobile and Baldwin counties that it considers rentals.

Also Monday, The Farmers Insurance Exchanges said that it would raise rates statewide, by as much as 35 percent in some areas, though the cost of some policies will decrease.

About 60,000 people will see a change in their homeowner policy rates, said Farmers spokesman Luis Sahagun, with the majority facing increases that will vary depending on the area of state and policy type.

Ragan Ingram, spokesman for the Alabama Department of Insurance, said that the state determined the rate increase was justified.

Beginning Dec. 1, Farmers will not renew wind coverage on 957 policies sold to landlords and 1,980 policies on homes that appear to be rented at least part of the time, according to Charles Angell, an insurance department deputy commissioner.

 Read complete article

Posted 7/25/2012

Wind pool continues to grow
but private insurance is increasingly available

From 7/20/2012 post by George Altman on Al.com

The state’s coastal property insurer of last resort has continued to grow steadily over the past year, according to data from the insurer, and as of May it covered 25,383 policies totaling nearly $4.4 billion of insured value.

But private insurance companies that recently have moved into south Alabama may be able to provide better and less-expensive coverage to many people who have joined the Alabama Insurance Underwriting Association, or AIUA, industry officials said.

Coastal Risk Underwriters came into the south Alabama market in the middle of 2010 with two property insurance lines, according to Andy DiLoreto, the company’s chief executive officer. DiLoreto’s company has since written more than 2,500 policies in Mobile and Baldwin. "There are more carriers in Alabama than there used to be," DiLoreto said. "It is our plan, over the... next 12 months, to bring in additional capacity."

Deepak Menon, marketing director for American Strategic Insurance, echoed that view, saying that a strong demand for coverage in the area and a favorable regulatory environment led his company to come to Alabama about a year ago. The company now has nearly 2,400 policies in force, he said. "We believe that we could get adequate rates for our risk," Menon said.

To get more information about obtaining policies with their companies, Menon and DiLoreto said, south Alabama residents can visit independent insurance agents.

 Read complete article

Posted 7/21/2012

Baldwin Mutual to drop nearly 1,700 policies
in Mobile and Baldwin Counties

Baldwin Mutual Insurance Co. plans to drop coverage of nearly 1,700 properties in Mobile and Baldwin counties — more than a quarter of its total in the counties — over the next 13 months, according to the company and the state Department of Insurance.

Meanwhile, American Modern Home Insurance Co. plans to stop offering new wind policies to homeowners in parts of Mobile and Baldwin, while dropping coverage of a few commercial properties, company officials said.

Since Hurricanes Ivan and Katrina hit in 2004 and 2005, property insurance in coastal Alabama has become increasingly expensive and difficult to obtain.

Read full story by Press Register's George Altman

Posted 6/11/2012

Are you getting the insurance premium discounts you deserve?

By George Altman, Capital Bureau
Read original 3/31/2012 article at al.com

A state law passed in 2009 requires that insurance companies discount the premiums of homes in Mobile and Baldwin counties that are built or retrofitted to meet building code standards. Yet many property owners and building inspectors have expressed doubt that the discounts are being properly applied.

Read more at Risk Mitigation

Posted 4/10/2012

Inspectors doubt insurers discount premiums
for houses built to code

From post by George Altman, MPR Capital Bureau

Building codes are common, but hardly uniform, in Mobile County and its municipalities. Local governments use different versions of the International Residential Code, or IRC, have different ways of determining what wind speeds structures should be able to withstand and express different opinions about the building code issue.

But there is broad consensus on at least one point: "Even though the codes increase, the (requirements for) wind speeds increase, the insurance rates have not gone down," said Frank Lott, an associate with Heritage Homes in Mobile. With rare exception, building inspectors for Mobile County and the municipalities therein told the Press-Register that they are frustrated with the size and duration of premium discounts given to properties that are built to code.

Renee Carter, state director for the Alabama Insurance Information Service, an insurance industry group, said she’s heard nothing of the sort. "From an industry perspective, we have not received complaints that people are not receiving the discount," Carter said. And applying such discounts isn’t merely a favor insurance companies can choose to do for owners of properties built to code, she added. Since 2009, it’s state law. "If there’s an issue, then we definitely want to know about it," she said.

Building codes set standards for how properties are built. They can help homes withstand storms such as hurricanes and also avoid plumbing, electrical and other problems. In hurricane-prone south Alabama, insurance companies and government officials alike have pushed for more storm-resistant homes. A bill from Sen. Ben Brooks, R-Mobile, passed into law three years ago, required insurers to discount the premiums of properties built or retrofitted to the 2006 International Residential Code.

Mobile County, Creola, Dauphin Island, Satsuma and Semmes all mandate the 2006 code for new housing, their building inspectors said. The city of Mobile requires the 2009 version, according to Roger Bendolph, deputy director of code administration for the city. Bendolph expressed understanding for possible reluctance by insurance companies to lower premiums for properties built to code. "The insurance industry is in business to make money," he said, adding that companies can’t be sure how effective the codes are until a major storm tests them.

His counterparts from other cities strongly disagreed. "The homeowner’s not going to get a fair shake," said Dauphin Island Building Inspector Corey Moore. Satsuma City Inspector Tom Briand said he’s heard for years that insurance companies would discount premiums for homes built to IRC standards, but he hasn’t seen it happen. "I’d like to see proof that insurance companies are actually giving discounts," he said.

For Briand, "the big question at hand" is what wind speeds should be mandated. Figures from Mobile County call for Satsuma homes to be built to withstand 126 mph winds, Briand said, but he thinks that number is too high and doesn’t apply it to Satsuma properties. "I question the numbers, and I would just love to know where they get this information from," he said. Mobile County Engineer Joe Ruffer said the wind speed estimates came from national groups with considerable expertise. Two separate models came up with similar numbers, he added.

Ruffer said the county has no immediate plans to switch to the latest, 2012 IRC standards. These are actually less stringent than the 2006 version, he said. "Everybody thinks the 2012 code is better and safer," he said. "It’s actually less construction. People don’t understand that." Ruffer added that he’d like to see greater uniformity of building codes in Mobile County. Such regulations aren’t just a matter of protecting property and lowering insurance rates, he said. "We’re talking about people’s lives."

Posted 3/25/2012 (Hat tip to Stan Virden)

INSURANCE GONE WILD

Click on this 2-minute interview with Bob Ingram to discover what happened to him when he put a metal roof on his house.  His insurance company told him they would have to go UP on his premium.  No one at the company mentioned ways of getting premium reductions for improvements that make your home stronger.

Mitigation -- the solution to the wind-and-hail crisis that is pushed by insurance companies and the Press Register -- is probably a good, long-term strategy, but to date those pushing it haven't addressed the significant enforcement and ethical problems that need to be fixed.

Meanwhile, what about fairness?  Are our Habitat for Humanity homes in Coastal Counties really more expensive to repair than in the rest of the state?

 Did you know that there have been more than 500 tornadoes hitting upstate Alabama since Hurricane Ivan?  More than 200 severe hail reports in Alabama last year alone.  If not, why isn't this a fact coastal media trumpets in headlines?  And if we're not more damaged than inland, why are we suddenly paying hundreds of percent more?

Everyone in the state knows there's a Coastal Insurance crisis, but the leadership on the coast -- not just elected leaders, but presidents of civic clubs, financial leaders, media and so forth -- don't speak with one voice about the solution. Many play into the hands of insurance company strategists who say the crisis is the fault of people living in Mobile and Baldwin counties. We built shacks on shifting sand, they say, knowing hurricanes were bearing down on us, so we deserve the kind of treatment we get from insurance companies. (This area went 50 consecutive years and nearly 90 years total without a single direct hit from hurricanes during the last century.)

Instead of blaming the victim, two basic solution strategies stand out.

1) Requiring the DOI to make losses due to wind and hail public by zip code, and enforcing premium fairness statewide based on the historical data.

(2) Creation of a multi-state, special coastal insurance band running from Mexico to Maine that keeps the ways of modern "insurance" out, and makes protecting homeowners its first and only job.

It's time for coastal leadership to come together around these or other solutions that FIX the crisis.  There's no point talking to the mega-powers in the rest of the state until we're united behind solutions.

If YOU want to be part of the solution, join HHII or come to one of our informational meetings to learn more.

Posted 3/11/2012

Judge Russell speaks about insurance reform

Read original 10/28/2011 article by

Addressing Baldwin County Association of Realtors, Judge Tim Russell spoke Thursday about insurance and property tax reform.

While Baldwin County remains one of the largest property tax generators in the state, the county has taken a massive hit because of Hurricane Ivan in 2004, Hurricane Katrina in 2006 and more recently the Gulf oil spoil and tornadoes that ripped through the area in April.

Those events caused property evaluations to plummet in the county while insurance rates have skyrocketed.

“We were the second most taxed county in the state right up until Ivan and its recovery,” Russell said. “Now we are fifth in property tax revenue. I want to be first. It’s not about raising taxes. I don’t want to raise taxes. In my 10 years as mayor for the city of Foley we never raised taxes and we never raised taxes during the time I served on Governor Riley’s cabinet. What we need to do is change the way property values are assessed and get those values back up to the level they need to be.”

Much of the problems with insurance in the area stems from the fact that, since Ivan and Katrina, along with the other major weather events, wind coverage is now done separately from fire and other types of coverage, with the vast majority of companies handling wind coverage coming from outside the United States.

 “Those companies don’t want to do business here, why should they when it costs so much more for them to do business here,” Russell said. “We’ve got to be able to reform the way business is done in order to reform the system.”

Posted 11/1/2011

Alabama natural disasters contribute to homeowners, property insurance increases

Read original 10/29/2011 article by Ebony Horton

Eric Blankenship who had been with the same insurance company for 15 years, switched his coverage when rates increased 20 percent. Blankenship is among thousands of property and homeowner policyholders in the Wiregrass who were affected by insurance companies’ recent decisions to increase rates and coverage or non-renew some policies in Alabama. Some of the companies - including the state’s second and third largest home insurers, Alfa Mutual Insurance Co. and Allstate Indemnity Co. - have reported that at least some of the changes were in direct relation to the April 27 tornadoes in north Alabama.

The Alabama Department of Insurance reported that total insured losses from the storms were estimated between $1.9 billion and $2.6 billion in May, making it the state’s costliest storm next to Hurricane Ivan by around $600 million.

Alfa reported that April 27 was also the costliest for the insurance company, with around 25,000 claims filed that were valued at more than the claims filed after Ivan. In June, the company announced it would non-renew an estimated 73,000 of its property policies.

Alfa spokesman Jeff Helms said the number of non-renewals has since been reduced by around 10 percent, but reflected a number of homeowner policies on rental properties that could be better covered under a commercial insurance policy. Helms said a 20-percent rate increase by Alfa that took effect last month was a result of a 10 to 15-year trend of natural disasters in the state. This month, the company also increased its rates on mobile home coverage by an average of 15.6 percent, while auto insurance declined in July by 0.7 percent. Helms said natural disasters in the state have caused several companies to rethink risk management strategies, but that Alfa offered non-renewed policyholders assistance through Alfa Agency with finding coverage elsewhere. “As a regulated industry we have to charge enough premium so that we can pay any anticipated claims in the future. Policyholders affected by the non-renewals are notified 120 days in advance of their renewal date.”

Baldwin County Probate Judge Tim Russell, who is chairman of the state’s Affordable Homeowners Insurance Commission, said Alabama ranks first in catastrophic loss per capita as a result of the storms and hurricanes the state has experienced in the last decade. The commission has held five meetings across the state with policyholders and insurers for input on potential legislation to help, and the commission is expected next month to begin a series of education meetings in Montgomery with speakers from throughout the country. “We understand that what’s driving up a lot of the cost is because of tornadoes, floods and hurricanes like Ivan and Katrina, but we want to counteract that,” Russell said. “We are hoping we will be unified on a state level and that other areas that are not affected as much by natural disasters will support us, because we generate so much tax revenue that the rest of the state enjoys.”

State Farm spokesman David Majors said the company did not make any policy changes in direct relation to the April tornadoes, which resulted in a little more than 23,700 property and auto claims. But Majors said the company expects to increase homeowners’ rates by an average of 5 percent statewide, while also decreasing its automobile rates. Homeowners’ rates in Baldwin and Mobile counties are generally expected to remain flat.

Posed 11/1/2011

Five Important Things to Know About an Insurance Claim in Alabama

The following post from law firm Boteler, Finley & Wolfe's blog is provided for informational purposes; HHII neither recommends nor endorses the work of this firm

The following material is an excerpt from B,F&W's recently published Guide for Insurance Claims. Download the entire guide at no charge at:
http://www.bfw-lawyers.com/pdfs/Guide-for-Insurance-Claims.pdf

1. Burden of Proof: The first and most important thing to remember about any insurance claim is that the person or business making the claim (the claimant) carries the burden of proof related to that claim. The person who is handling the claim on behalf of the insurance company (the adjuster) does not have to “disprove” the legitimacy of the claim. The adjusters job is simply to determine if the claimant has presented adequate proof of a covered loss with proper supporting documents or material to pay the benefits being claimed. It is important to understand and realize, the adjuster has an obligation to the insurance company to only pay benefits that are legally owed under the policy. The claim files of adjusters are periodically audited to make sure they are not paying more benefits than required by the terms of the policies and that claims are properly documented before making a payment. In some instances, insurance companies even pay bonuses to adjusters and/or agents based upon claim pay-outs, or more specifically, the lack thereof.

2. Adversarial Process: As nice and friendly as you think the insurance company will be to you in the claims process; understand, Alabama law defines the insurance claim process as an “adversarial proceeding.” This does not necessarily mean the insurance company is going to be mean and nasty to you during the claim process, rather it simply means you have to recognize that your objectives and the insurance company’s objectives are not the same when it comes to an insurance claim. You would prefer they pay the claim and they would prefer not to pay the claim. Because the claim process is defined by law as an adversarial process, insurance companies are granted a certain amount of latitude in how they handle and adjust an insurance claim, even if it works to the detriment of the claimant. Specifically:
1) there is no obligation for an adjuster to “help” you better present your claim,
2) the adjuster does not have any obligation to tell you about critical time lines or time limitations related to your claim,
3) the adjuster does not have to tell you about other possible coverages available to you for the loss, and
4) the adjuster often can not give you advice or suggestions on how to best coordinate multiple coverages related to a loss.
Simply put, because it is an adversarial process, you can not expect the insurance company to tell you how to effectively and timely present your claim or provide you with any helpful information . Because this process is considered “adversarial” a claimant does not have a right to justifiably rely on anything an adjuster says about the terms and conditions of the policy and/or the merits of the claim! [See, Apkan v. Farmers Insurance Exchange, Inc. 961 So.2d 865 (Ala. Civ. App. 2007): Insurance adjuster has no duty to help or assist claimant. In fact, adjuster’s duty is to protect the insurance company. Southern Bakeries Inc. v. Knipp, 852 So. 2d 712 (Ala. 2002): If a party owes no legal duty of disclosure to another, then material facts can be suppressed with out recourse for failure to disclose.]

3. No Reliance on Agent’s Oral Representations: As difficult as this is for most of us to believe, Alabama law has held that insurance customers do not have a right to justifiably rely on an oral representation made to them by the agent concerning the terms or conditions of the policy. This means if the agent tells you some event or loss will be a “covered loss” and the policy says it is not, the policy language will control and the loss may not be covered despite what the agent may have said. See Foremost Insurance Company v. Parham, 693 So.2d 409 (Ala.1997).

4. Clauses and Exclusions: Another legal reality that insurance customers have a hard time accepting is that Alabama law considers insurance policies to be “mutual contracts.” See Wolfe v. ALFA, 880 So. 2d 1163, 1169 (Ala Civ App 2003). What this means is our laws consider the customer and the insurance company to be “equals” in the negotiating process. Because of this legal concept (some call it a legal fairy tale) unfavorable and/or sometimes down right unconscionable clauses that work against the claimant are upheld on the basis that the customer got what he or she “bargained for” when “negotiating” for the purchase of the policy. Some of these type detrimental clauses include “commercial” arbitration clauses, forum and venue selection clauses, appeal protocol and procedure clauses, strict compliance clauses, cooperation clauses, indemnity clauses and many more often buried in the fine print of the policy. This also means well crafted exclusions for covered losses can be included, and upheld as valid, under the guise of a “negotiated” contract. One outrageous example of this is an exclusion for property damage losses currently found in some Alabama issued policies. It is an exclusion for “a loss to a covered property caused, or contributed to, by negligent construction.”

5. Notification of Claim: No matter what type of claim is being presented, it is always the responsibility of the insured individual and/or business and/or claimant to properly notify the insurance company of the claim or even the potential claim. All insurance policies have guidelines and procedures for notification of a claim and/or a “covered loss.” If these procedures are not followed, they can provide the insurance company with a legally recognized excuse to not pay the claim. Upon being notified of a claim or of a potential claim, many insurance companies will send out “claim forms” to the claimant. If the company does not provide “claim forms” it would be wise to verify the notice of claim in writing to verify that “timely notice” of the claim has been provided.

Posted 2/3/2012

State Farm raises rates by 5 percent across Alabama,
no change on the coast

10/5/2011 article by By Jeff Amy, Press-Register

State Farm Insurance Cos. will raise homeowners insurance rates across Alabama by an average of 5 percent, but keep them level in most of Mobile and Baldwin counties. It's the second year out of three that the state's largest homeowners insurer has kept rates level along the state's Gulf Coast while raising them inland.

Almost all other areas of the state will see rates increase between 5 percent and 8 percent, spokesman David Majors said. The changes begin Nov. 15 for new business and Jan. 1 for renewals.

From 2007 through 2011, State Farm has raised rates by an average of 35 percent statewide.

Majors said that overall, State Farm expected to pay out more claims money in the future, necessitating higher premiums. State authorities approved the action.

Majors said the request for a rate increase was filed before the April tornadoes.

It also does not take into account a new computer model of potential hurricane damage that industry officials have said could lead to rate reductions along the coast and slightly higher rates inland, he said.

 Read complete article

Posted 10/5/2011

Alfa raises homeowners insurance rates by 20 percent

Read complete 9/2/011 article by Jeff Amy, Press-Register

Alfa Mutual Group has raised homeowners insurance rates by 20 percent statewide, with even steeper increases for landlord and farmowner policies. The move does not include any increases meant to make up for losses from April tornadoes, said Charles Angell, who as the state’s actuary evaluates insurer requests to change rates. Angell told the Press-Register that insurers will only be allowed to include a fraction of their 2011 tornado losses in upcoming rate requests, a move that could hold down future price increases.

Instead of a reaction to April’s catastrophe, Alfa’s move is part of a several-years trend by large insurers to raise rates across the state — a recognition that in most places other than the coast, they were charging too little to cover losses in the long run.

Insurers had been less shy about raising rates in Mobile and Baldwin counties, where policyholders typically pay from twice to four times the state average for homeowners policies.

"Over the past decade, maybe longer than that, we have seen an unprecedented increase in storm damage and homeowners claims," said Jeff Helms, spokesman for the affiliate of the politically influential Alabama Farmers Federation. "We are seeing an increased frequency in storms and severity of storms, and that is putting pressure on rates."

Angell said that actuarial calculations supported Alfa’s changes, which went into effect Thursday. "Everything that they had done was justified and did support the increase we approved," he said.

Posted 9/2/2011

Public insurance adjusters called illegal in Alabama

In at least 44 states, insurance policyholders can hire their own adjusters, called public adjusters, to help settle claims after a loss. But the legal status of public adjusters is cloudy at best in Alabama.

Following April’s savage tornadoes, the Alabama State Bar warned that public adjusters are illegal in Alabama, saying that they are practicing law without a license and could face criminal prosecution.

Insurance Commissioner Jim Ridling says that policyholders are generally free to hire whoever they want to advise them on making claims with their insurer. It’s when the third party takes charge of the negotiation for the policyholder that things get murky, Ridling said.

Read full 7/3/2011 story by MPR's Jeff Amy

Posted 7/3/2011

Coastal Alabama insurer AIUA to cut rates by 6.2% on average

Jeff Amy, Press-Register Jun 21, 2011 - Show original item

Rates will go down, starting Aug. 1, for most policyholders of the Alabama Insurance Underwriting Association, the insurer of last resort for property in most of Mobile and Baldwin counties.

However, the cost of insurance will go up for policyholders closest to the Gulf in both counties.

The dip comes thanks to a new insurance model that predicts a larger share of hurricane damage will occur inland of AIUA’s coverage area in Mobile and Baldwin counties. It’s also thanks to relatively cheap rates that prevailed this spring when the Foley-based pool purchased reinsurance.

Posted 6/21/2011

Fair weather fiend

Read Press-Register's J.D. Crowe's comment

Posted 6/7/2011

Alfa to cut 73,000 insurance policies in Alabama after tornadoes

Jeff Amy, Press-Register Jun 3, 2011 - Read original item

 

Alfa Mutual Group will nonrenew 73,000 property policies statewide as it tries to stabilize itself following the April 27 tornadoes.

Posted 6/3/2011

Unlike Alfa, other top property insurers say they don't plan to cut policies after Alabama tornadoes

Jeff Amy, Press-Register Jun 7, 2011 - Read original item

 

Other top insurers in Alabama said Monday that they don't anticipate dropping large numbers of policies statewide in the wake of April's tornadoes, a move that Alfa Mutual Group announced last week

Posted 6/8/2011

Citing tornadoes, Alfa suspends writing new policies on older homes

Jeff Amy, Press-Register May 18, 2011 5:30 AM - Show original item


Alfa Mutual Group, the state’s second-largest homeowners insurer, has suspended writing new policies on Alabama homes more than 10 years old, as it tries to get its hands around what are likely hundreds of millions of dollars of losses from last month’s tornadoes.

Posted 5/19/2011

Alabama's coastal insurer of last resort passes 20,000 policies

The number of wind insurance policies at the Alabama Insurance Underwriting Association (AIUA), the state's insurer of last resort for most of Mobile and Baldwin counties, has continued to grow as traditional insurers have refused to renew wind coverage for thousands of homeowners in the two coastal counties.

Read Mobile Register reporter Jeff Amy's article

Posted 4/8/2011

Former insurance commissioner addresses Impact 2010

Read MPR 12/19/2010 report of Walter Bell's remarks to members of the South Baldwin Chamber of Commerce at their chamber’s December Impact 2010 luncheon at the Elberta Civic Center.

Posted 12/20/2010

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, www.aiisnews.org, 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

STATE FARM RAISES HOMEOWNERS' RATES

State Farm Fire and Casualty Co. said Thursday (9/30/2010) that it would increase rates by an average of 10 percent to 12 percent for most Mobile and Baldwin policyholders.  Statewide, including the two coastal counties, customers will pay an average of 8.4 percent more.

Effective Nov. 1, State Farm will impose an average increase of 9.9 percent in areas south of Interstate 10 in Mobile County and in areas generally west and south of U.S. 98 in Baldwin County. For most of the rest of the two counties, the increase will be 11.9 percent.

 Read complete Mobile Press Register story

Original Post

Farmers will drop 10,000 residential policyholders

Farmers will drop 10,000 residential policyholders in Mobile and Baldwin counties

Read more

 

Insurers dropping Wind Coverage for another 14,000

Insurers dropping Wind Coverage for more Homeowners in Baldwin & Mobile Counties

 Visit Mobile Press Register Blog(12/2009)

 

Home Insurers socking coast; charge more for Fire & Theft

Read article in Mobile Press Register 4/5/2009

Reposted 10/16/2010

State rates kept rising

 Read article in Mobile Press Register 3/15/2009

Reposted 10/16/2010

Home Insurers Socking Coast

 Read article in Mobile Press Register 4/5/2009

Reposted 10/16/2010

NORTH CAROLINA RATE INCREASE DENIED

Here is a link to the North Carolina hearings on the 25% rate increase denied by Commissioner Goodwin . Excellent to read for a great mapping of the supposed justifications of the models and well argued rebuttals.

Posted 2/8/2015

MS. HOUSE REPS TO HOLD MEETING ON WIND INSURANCE EFFECTS ON COAST ECONOMY

Mississipi's Affordable Wind Insurance Coalition (MAWIC)
sent out the news release below on 1/19/2015

Mississippi House Representatives Richard Bennett (District 120) and Carolyn Crawford (District 121) will host a meeting of senators and representatives to discuss the effects of high property insurance rates on the Gulf Coast economy on Wednesday, January 21 at 10:30 a.m. or shortly after both houses adjourn for the day in State Capitol building room 402. Senators and representatives serving on the house and senate insurance committees will hear facts and figures from coast business leaders David Dennis—president of Specialty Contractors and Associates, Bob Morrison—retired Hancock Bank Vice President (Mortgage Lending) and Jack Norris—Gulf Coast Business Council President, on how high property insurance premiums are stifling economic development on the Coast.

Because a substantial share of Mississippi’s Tax Revenue is generated in the coastal counties, this is an economic development issue that affects the entire state.

The purpose of the meeting is to encourage law makers to pass an Insurance Clarity Law this legislative session requiring insurance companies to annually report insurance premiums and claims data by zip code. Data from the law will require transparent reporting of insurance data, which is necessary in finding solutions to the high cost of wind insurance. One reason for high property wind insurance rates is due to risk sold to “reinsurance” companies overseas. A substantial portion of wind insurance premium dollars collected from Mississippians are being sent to re-insurers in other states and foreign countries. Accurate, annual data from the law would make it possible for our state to work with other states to solve the problem of high wind insurance premiums in coastal areas.

One prospective solution is the charter for a National Wind Insurance Cooperative within a Coastal Band (75 miles inland from the Coast) offering wind insurance coverage at lower cost and keeping millions of dollars in reinsurance premiums in Mississippi and the United States. Members of the Mississippi Affordable Wind Insurance Coalition, a group of citizens from the coastal counties, are advocating the Clarity Law and working with organizations in other states to address the problem. Alabama and Louisiana passed similar legislation in recent years.

Posted 1/20/2015

NORTH CAROLINA INSURANCE COMMISSIONER DENIES RATE INCREASE

North Carolina Insurance Commissioner Wayne Goodwin has ordered a zero-percent statewide overall average change in homeowners insurance rates, effective June 1, 2015. The decision comes after Goodwin held a hearing to examine the insurance companies' request to raise overall average rates by 25.6 percent.  Read the full story here.

GCECC participant Willo Kelly and her team were a part of this which shows what can be accomplished by grass roots efforts.  Now North Carolina is pursuing a Clarity Law!

Posted 12/26/2014

SOUTH CAROLINA PROBES ALLSTATE
RATE INCREASE REQUEST

South Carolina DOI shows great tenacity in probing Allstate's request for a rate increase and questions the validity of the hurricane forecast models they use.  HHII would like to see Alabama's DOI show the same level of interest in protecting the consumers' interests.

You can study the question and answer exchanges here and here .  (Warning: this is heavy reading!)

Posted 4/28/2013

Mass. home insurer seeks hike in premiums

Fair Plan cites storm risks, 7 years since last hike

From 4/16/2013 article by Taryn Luna in Boston Globe

Fair Plan, the state’s home insurer of last resort, is proposing to increase rates an average of 6.8 percent, citing greater vulnerability to major storms in coastal regions and the need to raise premiums after seven years without a rate increase.

Fair Plan, a consortium of the state’s insurers, provides policies to residents who cannot get coverage in the open market. It is the state’s largest home insurer, writing about 200,000, or 10 percent, of the state’s 2 million home policies.

Rate changes would vary among communities, but the proposal would cap both increases and decreases at 9.9 percent.

The proposal must be approved by state regulators before the rates can take effect in July. Last year, Fair Plan proposed an average statewide increase of 7.2 percent, also citing the risks of hurricanes and other major storms and the lack of a rate increase in years. State Insurance Commissioner Joseph G. Murphy, however, rejected the plan.

“The commissioner's position was that we did not provide enough evidence of the reasonableness of each component of the rate filing,” said Bob Tommasino, general counsel for Fair Plan.

This time around, Fair Plan is providing additional data. Tommasino said the increases are based on the cost of reinsurance, essentially the insurance company’s insurance, and new hurricane models that suggest an increased risk of a natural disaster hitting Massachusetts.

Read complete article

Posted 4/18/2013

Time to talk insurance reform

FromSouth Carolina The Post and Courier Storm of Money Series 4/14/2013

It isn’t easy for homeowners to discuss the complexities of property insurance — beyond saying that they pay way too much for it.

But in a series of articles called “Storm of Money,” The Post and Courier’s Tony Bartelme has given property owners enough information to explain to their representatives in Columbia why they are dissatisfied — often really, really dissatisfied — with what they are paying and how the industry works in this state.

A bill submitted to the State legislature for consideration sets out to gather data, address concerns and ensure that consumers and legislators have the information they need to handle their business effectively.

Its four basic tenets make sense and are similar to HHII's recently enacted Clarity Bill and several other bills proposed by Ben Brooks when he was in the Alabama Senate:

 ■ Homeowners must be empowered as informed consumers — able to shop for fair prices and make sound choices. The state’s insurance commissioner would be the facilitator.

 ■ More insurance providers must be willing to do business in the State because they are confident it is a fair and profitable market. The more providers, the more competition and the better prices for consumers.

 ■ Consumers should be encouraged to lower their premiums by making improvements to their property. The bill would increase funding that allows those upgrades to win homeowners tax credits, and would make people aware of other incentives related to property insurance.

 ■ The Legislature and the public need to receive regular, accurate and understandable data about the industry in the State and elsewhere. What are the premiums? What are the profits?

Wisely, the bill’s approach is not for the state to interfere in the insurance business overmuch, but instead to foster a market-oriented environment.

Read original post

Posted 4/17/2013

R Street paper shows South Carolina at low risk
of post-storm 'hurricane taxes'

R Street is a non-profit public policy research organization that supports free markets; limited, effective government; and responsible environmental stewardship. It has headquarters in Washington, D.C. and branch offices in Tallahassee, Fla.; Austin,Texas; and Columbus, Ohio. Its website is www.rstreet.org.

While a state Senate subcommittee has been appointed to study home insurance rates in South Carolina, new research from the R Street Institute demonstrates the state’s current system of property insurance regulation has held up well, particularly in contrast to other Southeastern states.

In a new paper, R Street President Eli Lehrer and Senior Fellow Ernst Csiszar, who was South Carolina's director of insurance from 1999 to 2004, examine how the property insurance market functions in coastal South Carolina, including how insurers determine rates and the roles of statistical modeling and reinsurance.

Lehrer and Csiszar conclude that South Carolina’s regulatory regime is fairly typical and that rates are reasonable, given the risks coastal properties face. They also note that South Carolina taxpayers face lower risks of post-storm assessments than other coastal states, such as Florida, Louisiana, Texas and Mississippi.

While South Carolina could do more to encourage property owners to protect their homes from extreme weather and to attract more carriers to the state, the current system is a rational one that serves consumers well, the paper notes.

"South Carolina's property insurance market isn’t perfect but it’s pretty good," Lehrer said. "Relative to other states, South Carolina does a pretty good job protecting its citizens from special hurricane related taxes while giving them a broad choice of insurers. While reforms may well be needed, the market is in pretty good shape."

To read the full paper, please click here.

Posted 3/5/2013

MA Voluntary Insurance Rates

Here are 2 letters   our MA Attorney General wrote to our Commissioner of Insurance requesting rate hearings on current homeowner rates of Voluntary insurers, private insurers , because she finds their rates are excessive and unjustified. Reinsurance amounts and how factored is also questioned.

These requests were denied by the Commissioner. We are reaching out to our State Financial Services Committee for a mandate for hearings.

The AG's explanations and examples of important findings in these 2 letters give serious question to the appropriateness of the current rates and lack of protection for consumers by our Division of Insurance.

The Commissioner not requiring proof of the accuracy of the hurricane models used and lack of proof on how the amounts of reinsurance were factored are negligent acts and result in severe economic hardship and overcharging of premiums for consumers.

I pass these letters on to you all so you can take the MA AG findings and have your State Attorney General comment on how your state is protecting consumers from excessive rates since the same hurricane models are used. Pass this on to your legislators and financial services committee as well. Thanks

Paula Paula Aschettino Chair - Citizens for Homeowners Insurance Reform www.homeownersinsurancereform.org, Cape Cod ,Massachusetts

Posted 3/22/2013

South Carolina is due for Insurance Review

Editorial in South Carolina Island Packet 03/03/2013

Posted 3/5/2013

Billion Dollar Coastline

Read series in South Carolina Low Country Weekly.

Posted 3/5/2013

Florida Residents to Free Itself of Some Condo Policies

(AP) The governing board of state-backed Citizens Property Insurance Corp. has approved another "depopulation" plan to move thousands of its coastal hurricane policies to a private insurance company.

The board voted Monday to allow the Florida-based Weston Insurance Company to assume wind-only policies from Citizens, including policies for condominiums in coastal areas. Citizens' is Florida's largest property insurer with nearly 1.3 million policyholders as of Jan. 31. The agreement was approved by the state's Office of Insurance Regulation last week.

Weston agreed to keep the policies for at least three years and will not exceed the 10 percent annual rate cap that now exists for policyholders, barring any legislative changes this spring.

Citizens' officials said the agreement could result in reducing its exposure in coastal accounts by $30,000,000.

Read original post at Local 15 website
See related post below

Posted 2/12/2013 (Hat tip to ACLeggett)

Heavily-Vetted Weston Ready to Shoulder Heavy Load in Florida Take-Out Program

2/13/2013 article by Chad Hemenway, PropertyCasualty360.com

Following nearly two years of modeling, stress-testing and refining its business model, Weston Insurance Co. is ready to embark on a “precedent-setting” move to assume about $30 billion in exposure from Florida’s bloated last-resort insurer.

Read complete article here

Posted 2/16/2013

Governors say no to hurricane deductibles

From CNNMoney webpage 11/1/2012Carolina is due for Insurance Review

Governors say no to hurricane deductiblesn insurance costs after several state governors declared that Sandy did not make landfall as a hurricane, exempting them from insurers' hurricane deductibles

Unlike regular deductibles that require homeowners to pay a set dollar amount -- typically $500 or $1,000 -- hurricane deductibles often require you to cough up 1% to 5% of your property's value. So a policyholder with a house worth $300,000 and a hurricane deductible of 5% would have to pay for the first $15,000 in damages before insurance payments kick in.

Hurricane deductibles only go into effect when storms have sustained winds of 74 miles per hour or more, or Category 1 hurricane strength. And state governors from New York, New Jersey and Connecticut are saying Sandy didn't make that cut.

"Homeowners should not have to pay hurricane deductibles for damage caused by the storm," said Governor Andrew Cuomo of New York. Governors Chris Christie of New Jersey and Dannel Malloy of Connecticut made similar statements, as did Maryland's insurance regulator.

The insurance industry would have reached the same conclusion that sustained wind triggers were not met, said Robert Hartwig, president of the Insurance Information Institute. "No one would have been charged the hurricane deductible," he said.

Insurers came up with the idea of hurricane deductibles after they made heavy payouts for Hurricane Andrew in 1992, which caused $15.5 billion in damages. Increasingly, insurers in hurricane-prone states along the Eastern seaboard and Gulf of Mexico have been adding the deductible to their policies.

Disaster and risk-modeling firm Eqecat estimates that there will be between $10 billion to $20 billion in insured losses from Sandy.

HHII comment:

Looks like a PR stunt. The Governors can make these statements but usually it's the state DOI, or its equivalent, which governs the insurance companies. And in Alabama, and probably most coastal states, it's not a 'hurricane' deductible, it's a 'Named Storm' deductible. Maybe that's why Mr. Hartwig was so willing to go along with not calling Sandy a hurricane; a named storm deductible would still apply.

 Posted 11/2/2012

NORTH CAROLINA INSURANCE COMMISSIONER
FINDS RATE REQUEST 'LACKS DOCUMENTATION'

In a scathing Notice of Hearing to the North Carolina Rate Bureau, the NC Insurance Commissioner, Wayne Goodwin, states that their latest rate filing 'suffers from significant deficiencies' including lack of 'necessary data, documentation and explanations of methodology'.  It continues that 'due consideration has not been given to actual loss and expense experience' and 'the use of the AIR .  . simulation model  .  . is inappropriate and lacks adequate explanation or justification.'

The NC Rate Bureau represents all insurance companies in the state and was seeking an average 17.7% premium increase.  The Insurance Commissioner is up for reelection in November which may account for his concern for homeowners' interests.  Read more here.

Posted 10/24/2012

MASSACHUSETTS DIVISION OF INSURANCE
REJECTS MPIA RATE FILING

The Massachusetts Division of Insurance fulfilled its responsibility to protect consumers by rejecting the Massachusetts Property Insurance Underwriting Association's (MPIA) request for an overall statewide average rate increase on the grounds that MPIA failed to provide adequate evidence to support the proposed rates.  Read the complete ruling here .

This is a large file and may take a while to download.

Posted 8/11/2012

OTHER STATES FACE SIMILAR INSURANCE PROBLEMS

Click on the links below to read about the insurance problems other states are facing and some of the steps they are taking to resolve them.

Beaufort County business leaders write Haley to try to lower home insurance rates.

Storm of Money: Hurricanes, insurance, and the secret black boxes that make our rates so high

UnFAIR plan: Why we need reform

Posted 6/12/2012

FLORIDA DEBATES INSURANCE FUNDING

Click on these links to Sarasota Herald Tribune to read articles

STATE INSURER: Senators' 'consumer' amendments set stage for hot debate

Lawmakers seek to derail Citizens insurance bill

IN GOOD SHAPE? CITIZENS:
In a twist, officials who want it dismantled now talk of its financial strength

Posted 3/1/2012

Storm Clouds Gather Over Florida Insurers

2/6/2011 WSJ article by Leslie Scism

State-run entities that expanded over the past decade to provide affordable homeowners insurance in hurricane-threatened Florida are in danger of becoming so big they threaten to wreak havoc on the local economy.

 Citizens Property Insurance Corp., already the state's largest home insurer, was growing late last year at a clip of 4,000 policyholders a month. It now has 1.5 million policyholders and a total exposure of $511 billion, about one-quarter of the market.

A sister entity, the Florida Hurricane Catastrophe Fund, is on the hook to reimburse insurers operating in the state up to $18.4 billion for losses they would incure from major storms.  It has about &7 billion on its books from accumulated premiums from the past six years, in which Florida has been hurrican free.

More (Subscription requred)

Posted 2/12/2012

Florida's Hurricane Reform Winds

Editorial in 12/14/2011 WSJ

Florida marked the end of its sixth straight season without a hurricane landfall last month, and the U.S. marked the longest stretch without a major storm since the beginning of reliable records in 1851. Even more remarkably, state politicians and Republican Governor Rick Scott are starting to reform two taxpayer-backed catastrophic insurance funds in advance of the next big wind.

Earlier this month, Boca Raton Representative Bill Hager unveiled HB 833, which would shape up the Florida Hurricane Catastrophe Fund, a state-run reinsurer. It's a courageous step given that any reform of the Cat. Fund, as it's known, will mean higher premiums.  And no one hates higher insurance costs than Floridians, who have the "tendency", as former representative Don Brown quips, to "builkd in very dangerous places and expect someone else to pay the bill."  That "someone else" are other Floridians and national tapayers.

More at WSJ on-line  (Requires subscription)

Posted 12/15/2011

FLORIDA HURRICANE CAT. FUND UNDERFUNDED

Editorial opinion in 10/24/2011 WSJ (Subscription required)

The Atlantic hurricane season is winding down without a disaster for Florida, but evidence continues to build that the state's taxpayers will get walloped sooner or later. The state's own hurricane reinsurer now admits its 12-month funding shortfall for claims is $3.2 billion.

That estimate is based on the taxpayer-backed Florida Hurricane Catastrophic Fund's cash on hand, its investment income and the amount banks estimate the fund could raise in municipal bond markets, ...

Read complete article

Posted 10/25/2011

Battle Over Insurance
State Farm Is a Holdout in Cutting Connecticut Deductibles

9/17/2011 WSJ article by Leslie Scism & Ianthe Jeanne Dugan
(Subscription required)

Hurricane Irene is long gone, but it left behind a clash between home insurer State Farm Mutual Automobile Insurance Co. and Connecticut officials over steep deductibles adopted by the industry to reduce exposure to storm damage.

Insurers are allowed in most communities along the East Coast and Gulf of Mexico to apply special hurricane deductibles that are tied to a storm's strength.

The guidelines vary by state, with Connecticut policyholders responsible for hurricane damage as much as 5% of their property's insured value, instead of the standard dollar-based deductible.

Read complete article here

Posted 9/19/2011

EXPECT MORE CANCELLED POLICIES & PREMIUM HIKES as
Allstate Swings to Loss

By Eric Holm WSJ (edited)

NEW YORK (8/2/2011) Allstate Corp. swung to a second-quarter loss of $620 million on the company's worst quarter for catastrophe claims since Hurricane Katrina struck the Gulf Coast in 2005.  Devastating tornadoes across the Midwest and South contributed to $2.34 billion in disaster costs, in line with an earlier warning Allstate had issued to shareholders.

The tornadoes have proven costly for the insurance industry, but Allstate, the largest publicly traded home and auto insurer in the U.S., has absorbed some of the largest losses.  The company has made a concerted effort to limit the number of homes it insures in coastal areas vulnerable to hurricanes, but the tornadoes struck away from the coast.

The company spent $1.23 on claims and expenses for every $1.00 it collected in premiums for the quarter, with catastrophic claims contributing 36 cents to that figure.  The company has faced elevated claims from severe weather over the past several years, prompting it to raise the price of home insurance in several states.  Now, CE Tom Wilson said, "we're acting as if the last three years are the new normal.

To read full article, subscribe to Wall Street Journal on-line

Posted 8/2/2011

Florida Bolsters Hurricane Coffers

By LESLIE SCISM WSJ (7/22/2011)

Just in time for the worst of hurricane season, Florida's state-run property insurer fattened its financial cushion with one of the nation's biggest municipal-bond offerings so far this year.

But despite its hefty size, the $900 million bond deal closed last week might not be enough if a series of monster storms strikes.

Volunteer Buddy Shipp in a destroyed Punta Gorda, Fla., church in 2004

The worst-case scenario is a reminder of the vulnerability facing more than a dozen so-called last resort insurers in hurricane-prone states such as Florida, Louisiana and Mississippi.

The idea behind most state-run insurers is to offer policies to homeowners who can't get affordable coverage elsewhere. Most of the insurers have ballooned in size during the past decade as private-sector companies have fled, often after complaining that regulators and lawmakers wouldn't allow them to charge rates that reflect the risks of doing business in areas where hurricanes hit.

Citizens Property Insurance Corp. has been the biggest insurer of Florida homes since 2006, backing about 1.3 million residences and businesses, or 26% of the total. With $406 billion in total exposure, the state-run insurer's premium volume makes it one of the nation's 10 largest homeowners' insurers.

Read full story

Posted 7/23/2011

FLORIDA’S INSURANCE NIGHTMARE

Herald-Tribune reporter Paige St. John won the Pulitzer Prize for investigative journalism for her series on Florida's insurance industry. 

In a two-year investigation, St. John examined the arcane property insurance system and created a unique database that assessed insurer reliability.

"While hurricanes may have gotten more dangerous, the reason we are paying more is we have a whole new system driving the insurance market," said Chris Davis, St. John's editor on the series and the newspaper's assistant managing editor metro. "Insurance industry funding has become much more speculative in past decades -- you have this whole house of cards, where no one knows exactly who owns what piece of the pie when a disaster happens."

You can read St. John's complete report here

Posted 7/8/2011

North Carolina sets up commission to study
reform of property insurance rates

By Wayne Faulkner StarNewsOnline.com

The N.C. General Assembly voted Thursday (6/16/2011) to establish a commission to study reforming how property insurance rates are set.

Home builder and Realtor lobbyists have called for reforms in the wake of huge property rate increases for coastal homeowners.

The bill sets up a joint legislative commission to study property insurance-rate making. The 14-member body would look at:
– Oversight of the industry's N.C. Rate Bureau, which acts as a collective bargaining agent for insurers; the N.C. Insurance Underwriting Association, known as the Beach Plan; and the N.C. Joint Underwriting Association, known as the Fair Plan.
– Adequacy of insurance commissioner duties on policyholder protection and "adverse effects of excessive, inadequate, or unfairly discriminatory rates."
– Whether citizens should be given a voice in rate appeals.

Currently, rates are set by the insurance commissioner in negotiations with the Rate Bureau. There is no vehicle for appeal. Neither the General Assembly nor the governor is involved.

Coastal North Carolina, including the Wilmington area, has been hit by the state's largest property insurance rate increases in recent years, raising cries of discrimination.

The Wilmington area's homeowner insurance rates are as much as six times those of Charlotte.

Posted 6/18/2011

HURRICANE SEASON STARTS JUNE 1

The Atlantic hurricane season starts in less than two weeks, and Floridians might want to keep an even closer eye on the skies than usual. Not only has the state been spared a big storm for five consecutive years, but the politicians in Tallahassee just gambled that their socialized insurance industry can cover any potential losses if a Category 5 does make landfall. Floridians better hope their Sunshine State lives up to its name.

Read complete WSJ 5/21/2011 editorial (requires subscription) or

Posted 5/21/2011

While Home Prices May Be Falling, Insurance Premiums Are on the Rise

By CHAD TERHUNE And ANNAMARIA ANDRIOTIS
Read full story in WSJ Real Estate News


Already plagued by stubbornly low home prices, homeowners soon may be facing another blow: rising insurance premiums.

Premiums vary by state, but last year, State Farm Mutual Automobile Insurance Co. says it increased homeowners rates 7.3% on average and, this year, has raised them in 18 states, including a few by more than 7%. By contrast, it cut rates in just two states.

In Florida, upscale insurer PURE Risk Management raised premiums 11% this year. Fireman's Fund Insurance Co., a subsidiary of Allianz SE, says it has started to raise premiums in some areas..

There may be more premium increases on the way, experts say, given the rising toll of natural disasters, including recent tornadoes and extreme weather in the U.S. and the earthquake and tsunami in Japan in March.

New risk models also are causing insurers to reassess rates, said PURE President and CEO Ross Buchmueller. A new hurricane model used widely across the industry forecasts a higher "wind risk," even for homes far from the coasts, driving premiums higher

. Posted 5/19/2011

Judge: State Farm overcharged

By TERRENCE STUTZ

AUSTIN — State Farm Insurance owes nearly $350 million to customers it overcharged dating back to 2003, a state judge ruled Monday, siding with the Texas insurance commissioner.

“There is substantial evidence to support the commissioner's decision, and the decision is upheld,” State District Judge Tim Sulak said. He ruled quickly after listening to two hours of oral arguments from attorneys for State Farm, the Texas Department of Insurance and the Office of Public Insurance Counsel.

A new report from the insurance department indicates that State Farm had a very profitable year in 2010, after paying out just 52 percent of its premiums to cover property losses. The 52 percent “loss ratio” was close to the state average of 48 percent for the 20 largest companies and significantly better than the 60 percent loss ratio that is consider a benchmark for profitability in Texas.

“State Farm has abused its policyholders through overcharges and years of legal wrangling,” said Alex Winslow of Texas Watch, who attended Monday's hearing. “Every day that State Farm dodges this truth, the abuse continues. The insurance commissioner knows it, the court knows it and certainly State Farm's customers know it.”

Read complete 4/12/2011 story at mySA

4/26/2011

All Americans will pay if Florida doesn't reform its insurance market

Florida's Citizens Property Insurance Corp. and Hurricane Catastrophe Fund are significantly underfunded.  Read Wall Street Journal's 2/23/2011 editorial analysis

Posted 2/24/2011

SOME LOUSIANA HOMEOWNERS OVERCHARGED FOR FIRE INSURANCE

Fire officials say it's because of a mistake made by the insurance company.

Officials say insurance companies are overcharging clients because the companies are using incorrect fire ratings. Fire ratings measure what kind of fire service your home receives base upon complex mathematical formulas.

  Read completre 1/27/2011 story by Brandon Richards at KPLCTV.com

Posted 1/30/2011

FLORIDA FACES HIGHER INSURANCE RATES

More than 4 million Florida homeowners, battered by property insurance rate hikes and disappearing coverage, are about to get hit again.

State regulators have approved $718 million in rate increases -- despite five years of no hurricanes. They will widen an already $20 billion gap between what Florida consumers this decade paid for protection and what insurers returned by way of claims checks.

Florida insurers continue to claim they are losing money -- the top 20 carriers reported losing $111 million the first half of the year after big payments to reinsurers for hurricane protection -- but the Herald-Tribune found those figures also hide profits.

Read complete 12/25/2010 story by Paige St. John in Herald-Tribune

Posted 1/25/2011

STATE FARM RAISING RATES IN LOUISIANA

State Farm Fire and Casualty Co. is raising insurance rates on nearly 30,000 small rental properties by a statewide average of 19 percent and dropping wind and hail coverage in the New Orleans area and other coastal parishes.

Read full 1/16/2011 Times-Picayune story at nola.com  

Posted 1/16/2011

New Insurers tip-toe into Coastal Markets

A handful of new insurers have trickled into the coastal markets of Alabama and Mississippi in the last year, offering new options to some homeowners.

Coastal American, PURE, American Strategic, Wilshire, Republic and Southern Fidelity aren't household names, and may not increase competition enough to lower prices.

Read Jeff Amy's complete 1/9/2011 MPR story here.

  Posted 1/16/2011

Gulf Coast homeowners scramble to find coverage

Major insurance companies are issuing cancellation notices regarding wind and hail coverage to thousands of Gulf Coast homeowners.  Read about it and watch video clip on WKRG channel 5's blog site and leave your comment!

Posted 1/14/2011

Texas officials must stop unjust homeowners rate hikes now

By Enterprise Editorial Staff
Published: 02:00 a.m., Thursday, January 6, 2011

We're not happy with the tsunami of rate increases for homeowners insurance in Texas, but we have to admit they're justified. After all, the state was hammered by countless natural disasters in 2010. Hurricane Buford alone caused billions of dollars in property damage along the Gulf Coast. ...

That's sarcasm, of course - though there's nothing funny about the higher bills that Texas residents will have to pay in 2011. That is, unless the Legislature and Department of Insurance step up now and stop these unjustified rate hikes.

Texas had no unusual property losses last year, but major insurance companies are still increasing homeowners rates by 4 percent or 5 percent. Allstate even has a 9.7 percent surge.

That's outrageous. If insurance companies are able to pull this scam after a disaster-free year, imagine what they will do after a hurricane. State officials must demand justification for these rate hikes.

If insurers can't provide that proof, the increases must be withdrawn.

Posted 1/7/2011

TEXAS HOME OWNERS SHARE OUR PAIN

(Texas) 'Lawmakers can't be fooled by arguments from insurance companies that Texas has had a lot of major hurricanes.  We've had two in the recent past, and many years of virtually no damage from tropical storms - like this year.  The biggest priority for the Legislature will be addressing the state's budget shortfall of up to $25 billion. That's a pocketbook issue for state government that cannot be ignored.  But homeowners insurance is a pocketbook issue for the people of Texas.  The elected officials who represent them must not come home until they have delivered tangible relief here.'

 Read complete article here

Posted 12/4/2010

Allstate Requests Hearing On Miss. Rejection Of 44% Homeowners' Rate Hike

Original article by Phil Gusman published by NU Online News Service 11/9/2010

An Allstate Insurance Company spokesperson confirmed that the company has filed a request for a hearing regarding the Mississippi Insurance Department’s decision to reject a 44 percent average statewide homeowners insurance rate hike request.

Allison Hatcher, Allstate spokesperson for the southern region, said Allstate worked with the Mississippi department to explain the need for the rate increase, but she said the department denies the insurer’s request. Allstate then decided to file the notice for request of a hearing, she said. She noted that Allstate has asked for an outside individual to preside over the hearing due to public comments that Commissioner Mike Chaney made when rejecting the increase request.

Commissioner Chaney had said he would not approve the request without a court order to do so.

Allstate and Commissioner Chaney subsequently sparred over the decision. Allstate contended that Commissioner Chaney’s comments were “perplexing” considering an actuarial report Allstate said was commissioned by the Mississippi Insurance Department (MID) found that the rate hike was appropriate and reflected Allstate’s increase in non-hurricane and non-wind-related claims and claim costs.

Commissioner Chaney responded to NU Online News Service, noting that one actuarial report did reach that conclusion, but another found that Allstate as not justified to receive more than an 18 percent rate increase. Commissioner Chaney said at the time, “These companies know how to work the system—you put garbage in the front side and get garbage out of the back side. But the fact is there is a lot more to approving rates, such as market disruption and unjustified use of certain models.” He also said he believes Allstate is attempting to price itself out of the Mississippi market based on comments made by George Ruebenson, former president of Allstate Protection. During a 2009 conference call, Mr. Ruebenson, who is now retired, said if the company could not reduce its exposure through risk management, it would “simply price our way out of the problem.”

Ms. Hatcher responded at the time that Allstate wants to “remain in a strong position in Mississippi. We want to be there for our customers. We want a strong insurance marketplace in Mississippi where consumers have choices.”

Regarding Allstate’s decision to ask for a hearing, Commissioner Chaney said, “We are very disappointed that Allstate has taken this route, and as for a public hearing, this is the first time in the history of the department, since the abolishment of the old rating commission, that we have been asked to have a public hearing on a rate denial.”

Posted 11/16/2010

State Farm cancels 125,000 in Florida

Read 2/3/2010 article here

 

This page last updated 7/13/2015

2/19/2015