Judge Russell speaks about insurance reform
Read original 10/28/2011 article by
John Underw ood
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
|
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
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