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I live in Lillian and I do NOT reside on a waterfront lot. I am about 1/2 mile from the nearest body of water and about 40ft. above sea level.
The home went through Ivan with very little damage. No claim was submitted.
I purchased the house in 2007. The insurance company that I started with charged us about
$2200.00 a year for coverage. The second year they raised the rate to over
$4k. I made many calls and found a company to cover us for
$3400.00. I am still with that company and paying the same amount,
even though the value of my home has dropped from $225k in 2008 to
$155k now. I am currently shopping around for a better rate but the pickings are thin. If a company does write policies in Baldwin
Co. their rates are no better that what I currently have.
I can't sell my home because I owe more that what its worth. I am on a fixed income due to a disability from 2001 and it's getting harder to make ends meet. I am contemplating letting my home go and renting but I am
afraid that my credit would be destroyed and no one would even rent to us. I really don't know what my next move will be but I know nothing will be done about our rates.
I think that because the area of concern is such a small percentage of the entire state that nobody cares that we are being abused here on the coast. Florida has a better chance of getting something done because the percentage of homeowners involved in this "abuse" is such a greater percentage of the entire state. Why would someone living in Huntsville paying very low rates care about our insurance problems? Why would a Governor that has a handfull of votes at stake care about us either? We don't have the votes to make us a threat to him and he simply doesn't care.
Someone last night said (at 12/6/2011 Lillian HHII Educational
Meeting) that the insurance companes are not at fault. I can't believe this at all. I know from the past that insurance companies will not pay out or lower rates unless they are forced to. I had to take my LTD insurance company to court to make them pay what they were supposed to pay. As long as
the insurance companies can get away with overcharging us and making more profits and no one in office is concerned, they will not lower our rates.
I see homes everyday being walked away from and left empty because people can not continue being overcharged. I am afraid that soon my family and I will be another one of those. Thank you anyway but I don't see anything changing in the future.
Posted 12/7/2011
We live in Orange Beach, We got canceled 2 years ago. We are Seniors, One is 82
& One is 75
We are paying about $3800. with flood, we just can't keep paying these cost, We are down in money and now they are going to take more out of S S checks. So what can we do? Why do we pay so much, when people over 10 are charged so little. They have Tornado's every year some where,
& look about this year. We have maybe a Hurricane in 10 to 15 years. We have not been hurt only once with just the roof. So we supply the northern people the money for all there disaster. Please do something now!!!!!. Another year
& and our home will have to go in forclosure and we have it just about paid for. So Help us Please.
Posted 9/24/2011
Read stories sent to AHIC following Listening
meeting in Mobile 8/29/2011
Posted 9/9/2011
I, Mary B. Walker who have lived here in south Alabama south of interstate 10. Before Katrina we were insured by Alfa insurance. My premium was about $4,000.00 per year. The deductable was $250.00. After the Storm Katrina Alfa insurance wrote a letter and canceled our wind coverage. They stated that we could remain with them but the company will no longer cover wind damange. The coverage for the policy would be $12,000.00. The deductible was $1,500.00. with no wind coverage. They stated that we lived in a hurricane prone area. Also we were a high risk area coustomer. I did not sustain any damage in hurricane Katrina. I did not file a claim. Why would they consider me a risk and I didn't even file a claim? I need help! How can you fix the problem. Please pass the Clarity Bill. I want a lower Insurance.
Posted 8/22/2011
My wife and I (72 and 74 yrs. old respectively) have been living on East Fowl River for over 10 yrs. Early part of that period I had homeowners insurance without high deductible. Currently my home is insured for $400,000 with a premium of $4,800 annually. Premiums have been higher, but I’m taking a chance on a non-listed out of state insurer.
My retirement dream home has turned into a nightmare. We live on Social Security and supplement income by drawing down on small retirement fund we saved up in a 401 and IRA accounts. Our house is for sale at a reduced price and we’ve had NO inquiries because of high insurance cost. We are stuck with our situation and the option of a reverse mortgage if things don’t change for the better soon.
In the 10 yrs. living here we have spent approx. $40,000 in premiums and collected $6,000 when a few shingles were blown off and we have water damage in a few places on our ceiling.
Here’s what the next 10 years could represent in revenue to the insurance companies.
No claims 10 yrs:
Out of pocket for us $50,000 in premiums. Add this to the $40,000 previously spent and you out of pocket $90,000.
With a claim 10 yrs:
Add the above cost to 5% deductible and we’re out $110,000 before we see a dime of insurance money.
Additionally:
All of the clean up expenses of debris, fallen trees and boat dock repairs have fallen on us. We’re okay with this because we choose to live on the water.
Our home is 15 miles from the Gulf of Mexico and 1 ½ miles inland from Mobile Bay. My elevation is 13 feet about flood plane. Anything South of I-10, please give us a break. Everyone is in harms way, but we thought that’s what insurance is for.
Joe and Lois
Theodore AL
Posted 8/17/2011
I OFTEN HAVE NIGHTMARES AS I LAID IN MY BED AND LISTEN TO THE WIND AND RAIN REMEBERING KATHRINA. WE HAD INSURANCE BUT THEY PAID VERY LITTLE. WHEN WE SUBMITTED OUR CLAIM WE HAD SUFFER OVER $10,000 IN DAMAGES WE RECEIVE A PAYMENT AFTER OUR DED. WHICH WAS A $1,000 A CHECK FOR $400.00. THEY DROP OUR COVERAGE. WE ARE NOW WITHOUT INS. PREMIUM IS NOT AFFORDABLE. WE FEEL AS IF NO ONE CARES. BEING ON DISABILITY MY HUSBAND AND I DON'T HELP. OUR INCOME IS LIMIT. OUR HOME IS WORTH EVERYTHING TO US. IT HAS BEEN APPR. AROUND 90,000. IF WE LOSE IT BECAUSE OF WIND, HAIL. WHAT ARE WE GOING TO DO? WHO WILL HELP AND GIVE US INSURANCE AT A AFFORDABLE PRICE? WHO CARES?
Posted 8/8/2011
First, my Farmer's agents' secretary called me and told me they were going to drop my wind and hail coverage last year. Then later she called me back and said they were not going to drop it. Then I received a notice in the mail where they were going to drop me. I am a single woman living alone and my sole support. I lost my job in June 2009 and was out of work for seven months. I only have a part time temporary job for the past year and am struggling just to pay my house note and cannot afford the premiums which have doubled. I was not going to carry and wind
& hail since I could not afford it, but my mortgage company let me know if I didn't get it they would get it for me and at a much higher premium. So, I have no choice. I think this is very unfair for people who are struggling to keep their home after job losses, etc. that now they have this additional tremendous increase. I am glad to hear about this organization and am glad that they are trying to do something
about this and I would like to join in the effort.
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Posted 6/8/2011
My home was built in 1989, It was insured for $123,000.00 for $600.
They have increased that to $1,800.00 over the years without a penny's more coverage. I still only have the same $123K in insurance. I went from a $50 deductible to $1,500 in an attempt to keep the rates lower.
Last year they dropped my wind coverage. Now I pay $1,200 wind pool and $550 for fire. Now the stinking wind pool wants me to prove my house is not in a flood plain
or get some kind of certificate. My house is 45ft above sea level If my house floods the entire city will be under water. I am really mad at getting ripped off like this. My insurance agent told me if we the public knew how much cash the insurance companies were sitting on we would
be really upset. Seems they are making money hand over fist with these huge increases.
I say let's create an insurance commission again that has teeth. And if the insurance companies don't like it, they can lump it.
We could form a citizens' insurance company as a cooperative and insure ourselves. We need a few thousand people to get on board with the idea and kick in some cash
and we can become self insured.
That is the premise of insurance anyway sharing the risk.
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Posted 4/14/2011
Yesterday I received a "new" quote on an insurance policy on two buildings we have in Daphne. Currently ,with wind coverage, we pay $5,000+- annually. With the new policy we will only pay $3,597.00. That's great , right? But that's with out wind which I can not get through a standard company but wait the State WIND POOL will save the day.....wind coverage $6,100.00 !!!!!!!!! Wow what a relief...my new coverage will only cost me, $9,697.00. That's only $4,500 more than what I was paying and the best of all is my rents remain the same where my net cash return is less than the increase! That sounds like a really good deal ....I wonder why no one wants to buy property at an established value???
Posted 3/2/2011
I have been unemployed for the last year (construction management job) and
we have been fortunate to keep our home and our bills paid, so
far...
We are currently insured through Farmers after having moved to
them when Alfa was going to increase our rate from a little over
$600 a year to $3200 after we completed our repairs post
hurricane Ivan. They had paid us a claim of around $21,000 for
damages caused by a tree falling on our house. Part of the
reason they used for such an outrageous increase was that they
claimed that our home was now worth $196,000 instead of the
approximately $105,000 at that time. So, we shopped and found
Farmers. They were at a little under $700 a year, but required
that we move out automobile coverage to them before they would
consider us. Their auto rates were about 20% higher than our
carrier at the time, but we were in that same pinch that so many
on this site have found themselves in, that is fewer and fewer
carriers from which to select.
That first year we were fine, no substantial increase, then last
year hit. We were increased to $1319 per year. What could we
do, we sucked it up and had to pay. Now, this year we have been
notified that to keep our current level of coverage we will have
to pay another $500!!! It doesn't take a super intelligent
person to do the math and see that in only two policy years our
coverage has almost tripled! Not only that, the only option we
have is to continue replacement cost coverage. We do not even
have the option of electing coverage on a per unit (per $1000 in
value) basis. Last year part of the reasoning used for our
increase was that they said our home would take $176,000 to
rebuild for a structure that can be rebuilt for a max of about
$112,000 at the most extreme (remember my profession is
residential construction). I have not yet seen the figures that
they are basing this current year rate increase on. I will not
be surprised for them to be claiming that my home will now cost
almost $200,000 for full replacement cost. This is for a 1213 sq
home that can easily be rebuilt for $70 - $75 a square foot and
more realistically for under $65.
It is impossible that we have become a risk to Farmers that
requires a 300% rate hike but we are stuck with it until we can
get our legislature to take reasonable action to protect us.
The biggest problem I see in that thought is that we have
representation for Mobile and Baldwin Counties that IS motivated
to protect us from predatory insurance practices that is being
offset my every other representative and senator for every other
area of the state that is not affected by this issue.
Therefore, there is little to no incentive for the rest of the
state to support something that has no direct affect on their
constituency. It is high time for our state and other coastal
states to form a STRONG coalition that CAN fight the big money
in the insurance industry and begin protecting the citizens
while allowing REASONABLE profits in by insurance carriers while
doing what insurance was originally designed to do and that is
spread the risk of few to the shoulders of many.
Ken Morgan
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Our story is similar to
so many others. Brick built house, 2-1/2 miles from Bay,
25 miles from Gulf, survived Ivan, Denis & Katrina, no claims.
Original premium when built in 1999, $847. Increased
steadily through 2006 to $1266.5 which, considering Ivan, Denis
& Katrina, did not seem unreasonable. Then increases took
off. 59% in 2007 to $2012 (reduced to $1473 by upping
deductable from 2% to $5000), followed by 35.9% in 2008 & 36.8%
last year. We now pay $2740 a year, well over 3 times what
we paid when we bought our house. We are with Farmer's who
have promised to drop 10,000 more homeowners in the coming year.
We carry a note on the house, so insurance is mandatory.
Fortunately, we can still afford to pay this amount but, as
retirees with limited income, our financial cushion is rapidly
being devoured.
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When our
homeowners' insurance notice came around, it was doubled. When
we asked why, they said that it was because we made two claims
on our house. We had not and asked that they give us specifics.
Little did we know that a cell phone was considered a house.
We bought a personal properties policy for only 35$ a year
because the ATT salesperson said that our own personal
properties policy would be cheaper than the policy that ATT
supplied. Within six months two of our family cell phones had
to be replaced. We thought we had been smart. Now this will be
on our record for two years. I would like to know how all this
information is connected!! It may be legal, but it is not
moral!! The insurance companies are getting away with lame
reasons to raise our premiums because the Department of
Insurance lets them get away with it.
Michelle Kurtz
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My cancellation notice
from Allstate regarding windstorm and hailstorm coverage arrived
in August. My 100 year old farmhouse was built in 1908 from
timber that fell on family property in the 1906 hurricane. It
has been continuously occupied by family members since that
time. My husband and I have lived there for the past 26 years.
No insurance claim has ever been filed on this property. We
are four miles east of the bay behind the high bluffs of
Daphne. My insurance agent told me that if we lived in
Rosinton, a community 91/2 miles due east of here, that my rates
would be lower. Rosinton is exactly the same distance north
from the gulf that we are, now, for 2/1/2 times as much as last
year, we are part of the pool, and Allstate still covers us, but
only for fire.
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My cancellation notice
from Allstate regarding windstorm and hailstorm coverage arrived
in August. My 100 year old farmhouse was built in 1908 from
timber that fell on family property in the 1906 hurricane. It
has been continuously occupied by family members since that
time. My husband and I have lived there for the past 26 years.
No insurance claim has ever been filed on this property. We
are four miles east of the bay behind the high bluffs of
Daphne. My insurance agent told me that if we lived in
Rosinton, a community 91/2 miles due east of here, that my rates
would be lower. Rosinton is exactly the same distance north
from the gulf that we are, now, for 2/1/2 times as much as last
year, we are part of the pool, and Allstate still covers us, but
only for fire.
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I
would like to speak to the insurance issues in Baldwin County as
the both the Chairman of the Family Selection Committee for
Habitat for Humanity of Baldwin County and as a twelve year
veteran of the mortgage business. Lest anyone have the mistaken
impression that the current insurance plight only affects “rich
people on the coast”, I would like to explain how it has
impacted Habitat for Humanity. Very simply because of the
simultaneous and disproportionate increase in taxes and
insurance, we can no longer extend our housing program to those
at the lowest end of the income scale. Yet these are the very
people who need our help the most. Previously, a typical Habitat
mortgage payment would be approximately $250. Now, the payments
range between $350-500.
Therefore, those people who make minimum wage or who are living
on disability, can no longer afford our payments. Yet, they are
the very ones living in poverty housing.
In
the mortgage field, I have met a vast spectrum of people from
senior citizens who used their life savings to purchase their
retirement homes here to first time homeowner’s who are having
to give up their home because they can no longer afford their
payments. This is not because they had bad mortgages but because
their insurance doubled and tripled.
Affordable housing cannot be obtained without affordable
insurance.
Sherry S. Weaver
Chairman Family Selection
Committee
Habitat for Humanity of
Baldwin County
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My name is Judy Goodman and I live at 22353
Peed Place, Gulf Shores, Alabama. I am 69 years old and have
been a resident at this address for the past 13 years.
When I decided to retire here, I purposely bought a small, brick
home located north of the canal bridge a couple of miles from
highway 59 (east on county road 4). I got a mortgage that was
within my very limited budget, since I am on a low fixed income
plus interest from my savings. My home insurance at the time of
purchase was just under $600 a year. Well, we all know what has
happened. Like others, I have watched my insurance double, then
triple, then double that again until the few quotes I have
received are up to $6,000.
I was informed by Allstate about six months ago that they would
no longer write wind and hail on my home. I called many places
and most would not insure me at all due to the fact that my home
was built before 2000 and because of location. My little house
is miles from the beach and has stood the test of time since it
was built in 1970 and is still standing. I did have damage from
Hurricane Ivan, but it was actually from a tornado that spun off
resulting in three trees falling and damaging my roof.
Of course, you may imagine the anguish this has caused me. Here
I felt sure that, by being frugal and saving, I would be able to
take care of myself and not have to worry about necessities. In
actuality my safe little “nest” and “nest-egg” both came
crashing down because of excessive insurance costs.
I have solved the problem the only way I was able to and at
great cost to me resulting in a constant worry about the future.
Since I could not get any insurance that I could begin to
afford, it was necessary to pay off my mortgage because they
insisted on total insurance for my home. (Allstate was quite
happy to insure for fire, at approximately the same cost that
included wind 10 years or less ago.)
In order to pay off my mortgage, I was forced to cash in my
retirement investments early (hefty penalty); this also
necessitated selling stock in this extremely low market for less
than the purchase price years ago. I also had to significantly
deplete my savings account depriving me of the extra interest
dollars that I so desperately needed per month. I simply do not
feel this is fair and do not understand why some regulations
and/or controls are not enforced for these insurance companies.
Not only am I unable to have (or afford) insurance now, I live
in a constant state of unrest, worrying about not only a storm
damaging my home but mainly worrying about what my future days
may hold. What if I need that extra money for “care” as I
further age? – that extra money I was forced to forfeit by
cashing in my “nest-egg” which provided me the security I should
have at this time in my life. People with homes need help!
One more final thing: we are ALL facing the economic problems in
our country resulting in home values declining. Add to that the
inability to sell because most buyers cannot get or cannot
afford the outrageously high cost of insurance, and the poor
sellers may just as well give away or abandon their homes. Our
homes are usually our most valuable dollar assets. What a shame
that the greed of powerful insurance companies can destroy so
much. All we can do is rely on our elected and appointed
officials (and prayer) to help us
.
Sincerely,
Judy B. Goodman
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We have a
homeowner who had a total payment of $177.86 a month which
included insurance. Well, early last year she changed insurance
companies because the one she had put up their rates. In the
meantime the mortgage co. (Regions) only had a figure of $919
for insurance which was paid by them. The new figure of $2134
was never figured into the escrow which made a large shortfall.
This year the rate has gone up to $2744 further adding to the
escrow deficit. In order for the homeowner to catch up she
would need to pay $599.21 a month this year. Her monthly S. Sec
check is just over $500 and she has no other income. Regions
has offered to spread the deficit over two years at $466.77 a
month or over three years at $417.29. Obviously this homeowner
cannot pay any of these and in another year the insurance will
probably go up again. We really don't know what to advise her
and she feels that we should sort it out for her. She has had
the home since 02. I have been trying to get new estimates for
insurance but so far have not received any quotes. Any
suggestions?
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Per our
conversation on Wednesday March 4 we are submitting our
insurance history for you to present to the State Legislators.
We hope that they will see that there is indeed an insurance
crisis in South Alabama.
|
YEAR |
INSURER |
COVERAGE |
COST |
HUR. DEDUCT. |
|
02-03 |
Alfa |
$118,200 |
$1035.00 |
2% |
|
03-04 |
Alfa |
$118,200 |
$1077.00 |
2% |
|
04-05 |
Alfa |
$127,000 |
$1167.00 |
2% |
July 05 Alfa no longer will
cover wind and hailstorm.
We did have a claim with Alfa of $5500.00
for tree damage due to Hurricane Ivan.
At this
time we shopped around and found that Allstate had the best
price, but also required that we had to have our auto coverage
with them for six months before we could get homeowners with
them. We did that and got a new policy with them.
| 05-06 |
Allstate |
$160,000 |
$1216.00 |
2% |
| 06-07 |
Allstate |
$172,000 |
$1338.00 |
2% |
| 07-08 |
Allstate |
$184,000 |
$2460.00 |
5% |
On March 31, 2008 we
received a letter from Allstate saying they would not cover any
loss or damage caused by windstorm or hail upon renewal of our
policy.
Again we shopped around
and found the best that we could do was to go with Alabama
Insurance Underwriters Associations for our windstorm and hail
coverage for the cost of $3403.00
This policy
is not for replacement value but for actual cash value only.
Besides the fact that this insurance is very expensive, its lack
of replacement value makes it almost useless but our mortgage
company requires that we have this coverage.
Our total insurance cost for
08-09 is $4220.00
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From: "larry livingston" <lliving36@mchsi.com>
To: blindog@bellsouth.net
Subject: March 11 Testimony at Montgomey, Al.
Date: Sun, 08 Mar 2009 14:54:14 +0000
I read the news article in the Sat. 7 March edition of the
Islander,page 7A.
"HOMEOWNERS HURRICANE INSURANCE GROUP TO GIVE TESTIMONY"
I am writing to applaud your efforts to make the Legislative
Insurance committee aware
of the exorbitant insurance premiums homeowners are being
charged in Gulf Shores and
Orange Beach. I understand most owners South of Interstate 10
pay higher premiums and
South of US Highway 98 pay extremely high rates "IF" they can
locate an insurance
company that will offer insurance coverage for their home.
Here is my personal testimony for the record: Only one company
would offer coverage-
Lloyd's of London underwritten by Southern Cross Underwriters in
Moorehead City, NC.
[Whitehaven Ins. Gulf Shores]
I am Retired US Army-My wife and I put forth most of our life
savings into a large
down-payment on a nice retirement home in March of 2005 near the
Bon Secour River
on Plash Island, Gulf Shores,Al. I knew the HO premiums would be
higher than inland
homes not near or on the water. I accept that fact and had
planned on that in our budget.
What I did not know was what was going to happen with the annual
rates. My HO
2005 premium with a $25,000.00 Wind/Hail Deduction was $1700.00
for $200,000.
In 2006 the premium was increased to $2756.00
In 2007 the premium was increased to $3286.00
In 2008 the premium was increased to $4240.00
For 2009 the premium will be $5138.00- I did increase the home
coverage to $261,000
which would in fairness account for part of the last increase.
Overall that is an increase of about 300% in four years! Our
monthly HO plus my Flood
Ins. Premium [which is reasonable] is nearly $500.00 per month.
That is a third of my
mortgage payment. On a fixed income it makes it very difficult
to cope with. If I had
known insurance would cost that much I may not have purchased a
home here in this area.
I do not expect to pay the same rate [lower] as an owner not in
a hazardous area.
However, to pay three to five times more is just not acceptable
or fair to the residents
who have invested their hard earned money in property near or
along the Gulf Coast and
now face annual property tax increases plus insurance increases
than double every year!
And these increases may force many to sell their homes at prices
less than they paid for
them a few years ago or default on their loans! Insurance
companies must share the pain
in these uncertain economic times just like EVEYONE ELSE!!
Any relief in the order of adjustments or pooling of owners to
bring down the rates will
be welcome. Thank you for your efforts! I hope you have some
success with your
meeting!
Sincerely,
Larry D. Livingston CW4 [US Army Retired]
16163A Bon Bay Drive
Gulf Shores, Al. 36542
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I have been a Realtor in South Mobile County for over 15 years. I opened Port City Realty in the Tillman's Corner/Theodore area in 2001. In 2001 we did not have the insurance issues that we have now. Since 2005 insurance has been an issue daily. Since 2005 I cannot tell you how many times I have heard "not south of I-10 from buyers." In the past year we have seen a trend towards higher premiums even when we are selling properties in town and in West Mobile. It's not just south of I-10 anymore.
Did you know?
• Insurance companies use NATIONAL construction cost numbers to determine how much replacement cost coverage is needed.
• Local construction costs are less than the national average in our area.
• Even if you have a low mortgage or no mortgage, in order to have replacement cost coverage on your home, insurance companies use numbers that are too high for our area.
• MOST homeowners are paying for more insurance than they need.
• They use national numbers for how much insurance you need and then they charge you more because you live in Mobile or Baldwin County.
• By claiming it would be too difficult to compute local numbers the insurance companies are getting away with highway robbery.
• The excuse that the insurance companies don’t have a better way to determine replacement cost coverage is absolutely no excuse for over-insuring everyone and therefore over-charging everyone. And the excuse that the insurance company is just trying to protect the consumer from being under-insured is simply protection the average person does not need. They are protecting people straight into foreclosure!
• There is no system in place to dispute what the insurance company claims is the replacement cost coverage.
• We need a system to dispute the cost to replace.
Here's one example: I recently sold a small, wood framed 1950's cottage for $84,000, the appraisal for the mortgage company confirmed the sale amount. The buyer after shopping several companies, was required to purchase coverage for $150,000 because that was the replacement cost based on the NATIONAL CONSTRUCTION NUMBERS.
If your insurance company says it is going to cost $150,000 to replace your house, but you can get a written estimate from a licensed home contractor or appraiser that says the cost the replace your house would be $100,000 and you owe $100,000 or less, you should be able to buy less insurance.
One Proposed Solution:
Appraisers are required to determine the sales value of homes and also THE REPLACEMENT COST based on local standards. The system they use is the Marshall Swift book. It contains National costs as well as local costs for every region of the country.
Homeowners should be able to dispute the coverage required just as we can dispute the value assessments for our property taxes.
Posted 9/4/2011
This is not so much an insurance horror story (although it could be!), but is my experience with having to find affordable homeowners insurance in the wake of the recent homeowner policy cancellations for wind/hail coverage.
I live in the Hollowbrook subdivision just south of highway 181 and 104 (about 5 1/2 miles from the bay) and have had homeowners/auto insurance with the same company for the last 5 years. To save about $700 for this coming year, I chose an all-peril policy with a $5000 deductible, which would have been effective June 29, 2011, at a cost of $1884.08 for these coverages (based on their "formula"): dwelling-$185,000; other structures-18,500; personal property-$138,750; loss of use-$92,500; personal liability-$300,000; medical payments-$1000.00. This quote included these discounts: 50 plus, new home, auto/home, and non-smoker.
In March of 2011, I was sent a letter informing me that my insurance company would no longer insure my property in Fairhope AL for wind and hail "due to substantial exposure to windstorm losses." In May of 2011 I received a new homeowner policy quote with a $5000 deductible and a windstorm and hail exclusion at a reduced premium of $106.80 for these coverages: dwelling-$185,000; other structures-$18,500; personal property-$138,750; loss of use-$74,000; personal liability-$300,000; medical payments-$1000.00. This would provide $116 per square foot to rebuild my home, but would not provide guaranteed replacement cost coverage. I believe this quote also assumes that I would also continue insuring my automobile.
For reference, my brick veneer house is 1595 square feet; additions/improvements include gas line, fireplace, upgraded appliances, fenced back yard, screened back porch, concrete patio, water feature, and extensive landscaping. Its current estimated value on Zillow is $148,000; the same model in my subdivision in now selling for a base price of about $142,500, which comes out to about $90 per square foot.
Based on the above square footage and estimated price to rebuild at the current building cost per square foot, the best premium quote from a local insurance agency I have received so far ($2,182) includes a wind/hail deductible of 5% and all-other perils deductible of $2,500, and would provide these coverages: dwelling-$150,000; other structures-$0.00; personal property-$50,000; loss of use-$12,000; personal liability-$300,000; medical payments-$1000.00.
If I chose to accept the above quote and had to file a claim due to wind or hail, $7500 would come out of my pocket before the insurance company would pay. In all of the 36 years I have been a homeowner in Mobile or Fairhope, the only claim I ever made, and that an insurance company ever had to pay for was after Frederic, for wind damage to the shingles on my roof. So, unless a tornado directly hits my current property (unlikely), repairing or replacing a damaged roof is most commonly what I would absorb the cost for, out of my deductible. My potential annual cost then, for premiums/deductibles: $2182 + $7500=$9682. Probable cost to the insurance company in this case: $0.00. Probable annual cost to the insurance company over the life of the policy: negligible. Return on my “investment”: also negligible. The odds hardly seem in favor of the homeowner. Maybe if insurance companies were to return the amount paid for premiums or offer vanishing deductibles after so many years if no claims were filed, I might feel as if the risks vs. payouts were more evenly distributed.
From what I understand, homeowners who live south of I-10 are paying higher premiums than those who live in the northern counties of Alabama. If this is the case, and considering all of the claims incurred by insurers for the recent tornado activity in those areas, the cost of homeowners insurance in this state needs to be more fairly assessed. And from what I've learned about the model used by the insurance companies in this state to calculate the premiums it charges for homeowners insurance, and especially for wind/hail coverage, it would make me feel better if I knew their figures were accurate and reflected the true cost of providing coverage to all of its Alabama customers.
Posted 6/9/2011
I was encouraged when I started to read the May 29 Press-Register editorial ("Insurance has to be a statewide issue now"). My enthusiasm disappeared just as quickly as the focus of the editorial shifted from insurance to the need for a statewide building code.
Everybody should be able to agree on the merits of a common, strengthened building code. But the elephant in the living room that was completely ignored is the continuing and growing burden in insurance costs borne by coastal residents.
In my case, my home suffered minor damage in Hurricane Ivan and none in Katrina. The real damage was to come later. My insurance carrier of 40-plus years abruptly canceled my policy. In its place, I now pay an annual premium that is five times higher, with a wind deductible that is almost 20 times higher.
And, if that weren’t enough, the deductible for all other perils increased tenfold. If this were football, insurers would be penalized for "piling on."
Your editorial offered the hope that north Alabama would not suffer the policy cancellations and premium increases that coastal residents have experienced because they have "suffered enough already." Does that imply that we have not suffered enough?
Let’s have another editorial about the fundamental principle of shared risk that the insurance industry still claims to embody but has conveniently forgotten. That discussion might also include the need to share the premium pain equitably throughout the state.
Damaging winds do not honor arbitrary lines drawn on a map, and insurance companies should not be allowed to draw them.
KURT KEENE
Gulf Shores
Posted 6/7/2011
AT RENEWAL IN AUGUST, MY WINDSTORM AND HAIL COVERAGE IS BEING DROPPED BY STATE FARM. I'M IN
GULF SHORES ON WEDGEWOOD DR. I EXPECT MY PREMIUMS TO GO FROM ABOUT $3670 TO $7000. NOT FUN. AND I HAVE A MORTGAGE.
Posted 5/20/2011
I just got my Allstate cancellation today. I'm 89 years old and lived in my house for 40 years. Only filed one claim in 40 years and have had Allstate for many years. This whole thing is out of control, it's a fraud on the public.
As most of us in our elder years we would never have imagined our country would be in the condition it currently is after fighting for it in WWII. That our politician have committed treason on the American people and this nation. Not only am I sickened by this insurance increase I'm sickened by our government (State and Federal). It's pathetic and downright criminal.
Politicians have tried to convince Americans ever since the economic collapse of the housing market and financial market that somehow we were all to blame. Hog Turds, and that's what your politicians are nasty hog turds. The American public has been fooled by our politicians. What appalling is they are trying to convince all of us its our fault that the economy collapsed, this is to save
their hide and as long as they could convince you we were all had a part in it when they actually destroyed this economy and country. But as long as ignorant
Americans buy that bluff they've got you right where they want you. Behind closed doors they are laughing at the American public, saying "can you believe we practically destroyed the country, collapsed world markets and we didn't get hung in the court house square by a mob of outraged Americans, heck we can do anything now to the American people because they are just plain stupid".
Your politicians are laughing at you because they robbed Social Security, manipulating the financial markets and your not dong anything. . Now they are trying to convince the young people of America they have to work longer to get social security. Are you kidding me! Surely American people aren't falling for this deceptive rhetoric. They are manipulating the younger generation convincing them to work longer for SS when they, the republican and democrats, destroyed Social security. Then they convinced most all!
of us to invest in the market as 401k plans and they manipulated and destroyed the faith in that system. And destroyed the housing market as well. Social Security needs to be saved for the younger generation since there are no more retirements from companies and the financial markets can't be trusted along with home values can't be trusted to be there. Then they have almost convinced the younger kids in their 20s and 30s they won't have SS when they get old. Good God, they have brain washed the young kids. Your career politicians are very sick and have need to be taken out of office.
What scares me the most is Americans old and young are just rolling over like sheep to the slaughter. I'm not sure who scares me more our corrupted government, Republican and
Democratic politicians, or naive complacent Americans who are letting your government put you in the streets like some dog. There has been no one running this country for 40 years, and now the ship is sinking and the government politicians past and present need to be held accountable. I pray to God the young people in America will wake-up, organize and string up all these old gray haired corrupt politicians that have perpetrated the biggest fraud on the American public in the history of this nation.
This brings me back to the Insurance increase which is criminal and another fraud passed by your politicians causing economic treason on the American public. Im 89 years old fought in WWII, Korea, worked in the business sector for 50 years and I'll fight these corrupt treasonous Republican and Democratic politicians till I die. They wont smear their nasty feces in my face. And if the rest of you don't get up out of your complacent stooper your ass is going to be on the streets with a tin can in your hand and when your politician drives pass you all he will do is spit in your tin can and laugh at you. Thats what they think of you the American public. God help us and God Bless American as long as it stands or as
long as people will stand for it!!!!
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Posted 4/14/2011
Read Jason Horn (the Insurance Guy)'s
letter to Senator Shelby
Our story is that we have owned our home
since November of 2003. We are insured through Allstate,
including cars - - as that got us the better deal when we signed
up. We did not have a claim after Ivan or Katrina. The home is
solid brick, on the back side of the island, 13 ft above sea
level. Two years ago our rates increased about 50% to $1,200.
We expected that. Then a year ago it doubled to $2,400,
increasing our mortgage payment by $400. We did not expect
that. Now we have been notified that this year, Allstate has
cancelled wind coverage. The only available coverage appears to
be through a company in Mississippi. Through them, we would
double our rates again, to $4,600….with an estimate of an
additional $500 (minimum) on our mortgage to cover the escrow.
Right now, apparently there’s been some miscommunication and our
mortgage company has not realized our new coverage is minus the
wind. They paid Allstate for the coming year at the VERY
reduced rate of $700 (no wind) and haven’t realized yet we don’t
have the wind. When they do, they will force us to get it.
When that happens, we will go into foreclosure. We were
struggling to make the additional $400 a month……another $500+
will not happen. We work hard. My husband has his own
business. He’s on the Planning & Zoning Board. I homeschool
our daughter. We participate in this community. We love Orange
Beach. It’s where my husband spent his childhood, and we have
lived here almost 7 years. We have never been late on a
payment, but the economy has devastated our business and it’s
taking all we have to get by. The insurance issue will be the
final blow. We are, of course, praying the paperwork mistake
goes unnoticed by our mortgage company for this year. We’ll
know in the next few weeks I suppose. he next few weeks I suppose.
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THESE ARE THE
CURRENT DEDUCTIBLE OPTIONS WITH AIUA (THE BEACH POOL) OFFER OF
COVERAGE:
5%
HURRICANE WITH AOP $ 500= $ 3680
5% HURRICANE
WITH AOP $1000= 3424
"
" " " 2500= 3021
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
10%
" " " 500= $ 3095
"
" " " 1000= 2878
"
" " " 2500 2542
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
THIS
INSURANCE COVERAGE IS FOR $131,000 BUILDING....
$
90,000 CONTENTS
5%
HURRICANE DEDUCTIBLE $ 6,500
ALL OTHER
PERILS $ 2,500
UNBELIEVABLE....
I
HAVEN'T MADE A DECISION YET...
JUST
THOUGHT YOU MIGHT LIKE TO SEE WHAT 2009 HURRICANE COVERAGE IN
GULF SHORES....1 1/2 MILES FROM THE GULF OF MEXICO....ZONE 1...
I HAVE
NEVER MADE A HURRICANE CLAIM IN 25 YEARS.....IN 2004 AFTER IVAN
THE TERRIBLE...I MADE A SMALL CLAIM FOR LODGING WHILE I WAS AWAY
FROM MY HOME.....THAT IS IT.....I AM SHOPPING FOR COVERAGE
ELSEWHERE...I HAVE UNTIL NOV. 3, 2009......
THANKS
BARBARA
SPARKMAN
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Another Vale of Tears
Bob Morgan reports our Bill Dawkins' story
in the Islander
Hang on to your hats--- Our bill for W and H
coverage is now ( as of Aug.09) $7200.
No, we are not on the water and yes, we are 200 feet above sea
level.
We were paying about 2700. a year. City location is Daphne.
So hang on guys, it is going to get worse.
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We live in Lillian,
having moved here in 2004. We had no damage to a house during
Ivan, as our house was not yet built. We were living in our RV.
The house was finished in 2005. That year we paid $600 to
AllState for coverage, including windstorm. The next year, the
insurance rose to $1200 for full coverage. This year AllState
cancelled our windstorm coverage, forcing us to the "beach
pool", and raising our premium to $3200. We are 43 feet off
Perdido Bay, across the road and some distance from the water.
In our subdivision, there were minor repairs during Ivan to
shingles, etc. caused by wind, but nothing major. We would like
to self insure, but we can't, since we have a home mortgage. We
are retired and on a fixed income. This is a huge financial
burden for us both. We are trying to find work at the present
time, but know that in a few years, we might not be physically
able to work, unable to sell our house due to the insurance
premium, and in a word: trapped in the situation.
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My agency,
Eastern Shore Affordable Housing, has several houses. People who
work in our $6-to-$12-an-hour-paying jobs rent them. They can
barely afford what little I charge. Their car breaks down, or
they miss a few days work because they’re sick, or their power
bill goes extra high one month, or gas prices jump and they fall
behind on their rent. The next month some fall further behind.
Now Christmas is just around the corner.
If I add just
the increased cost of wind insurance to these rental
houses, I’ll have to increase the rent I charge these people
another $100 or more a month.
I don’t carry
homeowner’s insurance on my own house because it’s too
expensive.I run a thrift
shop in Fairhope. The proceeds helps people with their housing
needs. My rent for the shop increased by $300 a month because of
the hurricane insurance costs.
This insurance
problem is making low-income rental even more expensive, and
something needs to be done about the premiums
Sr. Julie
Guillot, SJ
Founder and Director
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I’ve been a Realtor in Baldwin County for over 14 years. The
recent housing crisis has affected our market, like almost every
other area of the country – but, we now have been given a second
“hit” to our local housing market. I am talking about the
negative impact from the increase in rates for Homeowners’
Insurance – with an increase in fees for wind coverage and
higher deductibles.
My first question: How can the housing market in Baldwin County
recover when the Buyers we, as Real Estate Agents, work with go
into “sticker shock” at the large costs to insure and walk away,
not because they want to, but because they simply can’t afford
to live here with such a high cost to insure? Imagine being
approved for a mortgage – then you get your final Homeowners’
Insurance quote and your payment jumps up a minimum of
$400/monthly? There also seems to be a misconception that only
the “wealthy” live in Baldwin County – “at the beach” – and that
the wealthy can afford the increase in Insurance rates. Not
everyone in Baldwin county lives in a $500,000 and up home! The
following facts are provided from the University of Alabama
website (Alabama Center for Real Estate):
1. Total homes sold in the City of
Birmingham – January 2009 – 564
2. Total homes sold in all of Baldwin
County – January 2009 – 134 (Take into account the recent
Auctions)
3. Median Selling Price in the City
Birmingham – January 2009 - $129,900
4. Median Selling Price in all of
Baldwin County – January 2009 - $176,250 (Take into account the
recent Auctions)
5. Average Selling Price in the City of
Birmingham – January 2009 - $151,584
6. Average Selling Price in all of
Baldwin County – January 2009 - $231,077 (Take into account the
recent Auctions)
7. A recent Auction of Gulf Front
Condominiums in Baldwin County sold $600,000 - $700,000 valued
condos for $200,000’s up to $300,000’s. Penthouses valued at
near $1,000,000 sold for in the $300,000 - $400,000’s at the
Auction! To the Buyers who bought – I’m sure they are
thrilled.
To the developers, condominium owners, homeowners
who are losing to foreclosures, auctions, short sales – it is a
disaster. You can shake your head and say, “They were
speculating, trying to make a quick buck by investing in these
condos and homes they are now losing.” Not all the owners
losing money in these actions were speculators – they were
homeowners like me who worked hard, saved their money, bought
their primary homes, their vacation homes – and helped pay our
government officials salaries, helped add to Alabama coffers,
helped pave your roads, repair or build your schools – and
more!
My next question: Have you looked at the
Insurance companies maps for “seafront” and seen how far north
in Baldwin County they now consider the “beach”. If you live
south of Interstate I-10, you are now or about to be seafront!
My final question: Who will service the
resort areas of Baldwin County? Who will continue to help earn
the over 20+% of the State of Alabama’s revenue coming from
Baldwin County, going to help the other counties of Alabama
survive? What will happen if the servers, merchants, condo
owners, apartment owners, home owners who work and or live here
- or rent their properties to vacationers and workers – when
they can no longer afford to live or own in Baldwin County? As
the Insurance rates have gone up, the rentals fees will and are
following. Do you expect the workers to live outside the area
and drive to Baldwin County to work, day after day? Do you
expect the vacationers – who have saved all year just to come to
Baldwin County, to spend their money, that is then sent to add
greatly to the State of Alabama’s coffers – still be able to
afford to come here, stay as long, spend as much money – if the
increases that are and will come as Insurance rates continue to
go up, make their costs to vacation/live here continue to go
up? Will Baldwin County become a “Ghost town”? Will Gulf
Shores and Orange Beach, the jewels of the Alabama Gulf Coast,
become one big Sandbar? Will we see an increase in Foreclosures
as the Insurance rates increase? How will our housing market
pull out of the continued downturn, finally stop and turn
around? We need help – and quickly!
Deborah Benton, Realtor
President, Timeless, LLC
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My husband, 10 y/o daughter and I live in Point Clear on
beautiful Mobile Bay. We live in a 60 y/o home built by my
husband's parents which we acquired 23 years ago when we
married. We have a wonderful life in a wonderful setting and I'm
not writing to solicit sympathy, but simply to reinforce some
information about our area.
Our country and our state are in an economic crisis. Most of
this crisis stems from problems related to housing. Homeowners
insurance in Baldwin County is contributing to this economic
crisis throughout the state of Alabama and it is spilling into
the national economy, as well. Because of the exorbitant cost of
insurance, homes are not being sold. The housing market is
already a disaster, but the added burden of costly insurance is
making this crisis worse. People have lost their savings and
cannot buy a house with an annual insurance premium which they
cannot afford. Banks aren't lending money for the additional
premiums. For these same reasons, builders aren't building new
homes. These builders are now losing their jobs and health
benefits, along with members of the real estate industry, the
supply industry, the electricians, the plumbers and the
thousands of individuals in Mobile and Baldwin County associated
with housing. Those thousands of people support other industries
throughout the state, so those businesses and employees suffer,
as well.
Existing homeowners are having their insurance canceled and new
coverage is costing about 10 times more than it did 3 years ago.
In addition to having lost our 401Ks, our children's college
tuition savings, and the value of our homes, we are now paying
thousands of dollars more each year for a service which we may
never need. This means that we will be spending even less at the
restaurants, malls, salons, and grocery stores. An overnight
trip to Montgomery to see a play at the Alabama Shakespeare
Festival with a stay at a hotel and dinner at a restaurant will
be out of the question. Business in Huntsville will have to be
conducted by phone. The vacation at Lake Martin will be
canceled. The great shopping in Birmingham foregone. All of
theses businesses and employees will lose money, all of whom pay
taxes to the state of Alabama. Alabama is losing that tax
revenue - yes, those little communities in northern Alabama are
losing money because of the cost of insurance in south Alabama.
Businesses are closing everywhere, but they will close quicker
here because of the exponential effect of our unique
circumstances. Houses which Tuscaloosa residents used to rent in
Gulf Shores and Orange Beach will either be shuttered or the
rental rates will rise significantly to cover the cost of
insurance. The same with the condominiums and the hotels and the
restaurants and the souvenir shops and the fishing boats and
every business which services tourism. I don't have statistics,
but I suspect that tourism along the Gulf is a major source of
income for the State of Alabama. I also suspect that as this
economy continues to shrink, more and more families throughout
the country will be changing their vacations from the Caribbean
and more exotic locales to the economical and beautiful Alabama
Gulf Coast. The Alabama Coast is poised to become a major
tourist draw as more of the nation adjusts it's travel interests
and abilities. But we can lose out on that opportunity if the
area cannot afford to operate as a destination.
My family and my husband's family has lived in this house for 60
years and has faithfully paid annual insurance premiums to
Allstate for all of those years. In the 23 years that we have
lived here, we have made 2 claims and I believe his parents may
have made 2. Without a doubt, the premiums paid in have been
much greater than the claims paid out. Allstate has made a very
nice profit off our family, but future profit doesn't appear to
be as great, so our insurance has been canceled. We were good,
loyal customers for many years, but now we look a bit weathered
and not so pretty and Allstate and the other insurance companies
are dumping us for the more attractive models. I understand that
they are businesses but businesses must be accountable (wasn't a
lack of accountability a reason for the banks, and subsequently
the economy, failing?).
If I have learned anything in recent months, it's that what
happens in California or Detroit or China or Gees Bend, also
effects me. Like it or not, we are all now financially connected. I would like to think that we were always morally connected
and would want to help each other during this very scary time in
history. I appreciate any support the state can give us in order
that we can continue to support the great state of Alabama.
Thank you,
Jeri Jones Harrison
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