Tuesday, July 31, 2012

AM Best Upgrades Ratings of American Strategic Insurance Corp and Its Affiliates - MarketWatch (press release)

OLDWICK, N.J., Jul 31, 2012 (BUSINESS WIRE) -- A.M. Best Co. has upgraded the financial strength rating (FSR) to A (Excellent) from A- (Excellent) and the issuer credit ratings (ICR) to "a" from "a-" of American Strategic Insurance Corp (American Strategic) and its affiliates, ASI Assurance Corp, ASI Preferred Insurance Corp and ASI Lloyds (Dallas, TX).

A.M. Best also has upgraded the FSR to A (Excellent) from B++ (Good) and the ICRs to "a" from "bbb+" of American Strategic's other affiliates, American Capital Assurance Corp and ACA Home Insurance Corp. (collectively referred to as ASI). The outlook for all ratings has been revised to stable from positive. All companies are domiciled in St. Petersburg, FL, except where specified.

The rating upgrades reflect ASI's long-term underwriting profitability and solid risk-adjusted capitalization resulting from prudent underwriting, pricing sophistication and an effective enterprise risk management process. As a result, significant surplus growth has occurred over several years from operations as well as support from the group's parent company, ARX Holding Corp.

The upgrades further contemplate that ASI's operating performance and risk-adjusted capitalization will continue to trend favorably going forward, as the organization begins to further diversify its geographical footprint. Furthermore, ASI's diversification strategy benefits from strong partnerships with several leading personal automobile writers.

These positive rating factors are somewhat offset by ASI's current geographic concentration of risk in Gulf coast states, which carries with it exposure to weather-related events and significant dependence on reinsurance. However, ASI's sound overall risk management focus, strong operating performance and capital strength have enabled it to reduce its dependence on quota share reinsurance. In addition, ASI continues to maintain a robust level of catastrophe reinsurance coverage.

The upgrading of the ratings for American Capital Assurance Corporation and ACA Home Insurance Corp. recognize the full rating enhancement each receives from its affiliation with American Strategic.

In addition, A.M. Best has assigned an FSR of A- (Excellent) and ICR of "a-" to ASI Select Insurance Corp. (ASI Select) (headquartered in St. Petersburg, FL). The outlook assigned to both ratings is stable.

The ratings for ASI Select reflect its low underwriting leverage, internal reinsurance through American Strategic and management's track record for operating new companies under the ASI brand with prudent growth and favorable underwriting performance. In addition, the ratings contemplate the implicit and explicit financial support ASI Select will receive from ASI in the future.

Negative rating actions could occur if ASI's operating results were to significantly deteriorate and cause a material decline in the organization's risk-adjusted capitalization.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: "Risk Management and the Rating Process for Insurance Companies"; "Catastrophe Analysis in A.M. Best Ratings"; "Understanding BCAR for Property/Casualty Insurers"; and "Rating Members of Insurance Groups." Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology .

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com .

Copyright (C) 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

SOURCE: A.M. Best Co.

                        A.M. Best Co.           Frederick DeLeon           Senior Financial Analyst           (908) 439-2200, ext. 5175           frederick.deleon@ambest.com           or           Rick Decker           Assistant Vice President           (908) 439-2200, ext. 5423           rick.decker@ambest.com           or           Rachelle Morrow           Senior Manager, Public Relations           (908) 439-2200, ext. 5378           rachelle.morrow@ambest.com           or           Jim Peavy           Assistant Vice President, Public Relations           (908) 439-2200, ext. 5644           james.peavy@ambest.com                

Copyright Business Wire 2012

Sunday, July 29, 2012

Taking heat is part of the job for state insurance chief - Boston.com

In recent months, insurers jacked up home insurance rates across Massachusetts. Auto insurance rates are increasing for at least the third consecutive year. And Liberty Mutual, one of the state's largest insurance companies, disclosed that it paid its top executive roughly $50 million a year, rather than returning money to the policyholders who own it.

The response of the Massachusetts Division of Insurance? Critics say not much.

This apparent lack of action has sparked criticism from Attorney General Martha Coakley and consumer advocates, who argue that Insurance Commissioner Joseph G. Murphy and his agency have not aggressively challenged rate increases and executive pay.

"This is a serious issue," said Paula Aschettino, founder of Citizens for Homeowners Insurance Reform, a nonprofit advocacy group seeking lower home insurance rates in the state, especially along the coast, where insurance can be difficult and expensive to obtain. "The commissioner of insurance is not using the powers of his office to protect citizens from excessive rates."

At issue is the role of the division, and whether it should actively use its powers to reject rate increases and rein in compensation, or instead focus on promoting competition ­— which industry officials say ultimately means a better deal for consumers.

Murphy, who became the state's insurance commissioner two years ago, said he is doing his best to balance competing responsibilities to insurers and customers. Although the most recent criticism has come from consumer groups, Murphy noted that he angered insurers two years ago when he rejected hundreds of health insurance rate increases.

"Our role here is not to be Mr. Congeniality," Murphy said. "If insurers and others are upset, we are probably doing our job."

The Division of Insurance is charged with licensing insurance companies, ensuring they are solvent and able to pay claims, reviewing rates and business practices, and helping consumers find information or file complaints about companies.

Many of Murphy's practices appear consistent with those of past commissioners, who approved most rate increases after staff reviews. Murphy has also allowed auto insurers wide latitude to set rates, maintaining the partially deregulated market established four years ago by his predecessor, Nonnie Burnes.

Murphy said his office carefully reviews rate hikes and frequently raises questions, but must typically approve personal auto and home rates, so long as they comply with state regulations and are not excessive, inadequate, or discriminatory.

Some consumer advocates have said that's not enough. Coakley, who is charged with representing customers in insurance proceedings, suggested in an April letter to Murphy that he was essentially rubber-stamping auto rates, allowing one insurer to boost rates by 30 percent over the past two years without even holding hearings. Coakley declined requests for an interview.

Many companies have also raised home insurance premiums recently, citing a jump in weather-related claims last year. Bunker Hill Insurance Co., which insures about 34,000 homes in Massachusetts, recently raised rates by nearly 10 percent. Andover Cos., with more than 100,000 customers in the state, raised homeowners' insurance rates by an average of 9 percent in March.

Coakley has blamed "untested and discredited hurricane models" used by insurers for contributing to rate increases in home insurance and called on Murphy to hold hearings on the issue. Her staff argued the computer models overstate the potential risk from storms and may have led to $500 million in overcharges to home insurance policyholders over the past six years.

The agency rejected Coakley's request to immediately hold hearings on the rate increases, but said it plans a public hearing later this year to consider concerns about hurricane models, which forecast the potential risk from the storms.

Murphy admitted he rarely rejects home and auto rate increases. But he insisted his agency reviews the filings, which sometimes leads companies to revise rate requests before they are finalized and made public. The agency estimated that companies make changes in about one in five auto insurance filings.

"There's back and forth and there are adjustments made," Murphy said. "If I were to reject a rate increase outright, and call for a hearing, this agency would grind to a halt. We'd be having hearings or filings all the time."

Murphy added that giving auto insurers more freedom to set rates has helped consumers, bringing more than a dozen new competitors to Massachusetts and lowering auto premiums by 7 percent from 2007 to 2011.

Murphy has also been criticized for doing too little to protect the ownership interests of policyholders of mutual insurance agencies, such as Liberty Mutual Holding Co. The Globe, citing filings with the insurance division and interviews with company officials, reported that Liberty Mutual paid former chief executive Edmund F. Kelly $200 million over four years, making him one of the highest paid chief executives in the country. Watchdogs and customers said at a least some of that money should have gone to policyholders, who, under the mutual corporate structure, own the company.

But Murphy said he doesn't feel it's his role to tell companies how much to pay executives, unless the costs threaten the firms' solvency and ability to serve customers. Despite the high pay to Kelly, Liberty Mutual remains profitable with $18 billion in equity.

Many insurance executives and industry observers, meanwhile, praise Murphy's office for its professionalism and fairness. "The insurance division has always done a good job of both protecting consumers and maintaining good relations with the business community it oversees," said Erin L. Ayers, editor of The Standard, an insurance trade publication.

Even some health insurance executives, who slammed Murphy two years ago for rejecting their rate increases, praised the agency's willingness to work with the industry to find ways to make premiums more affordable. Health insurers have since sought much more modest increases.

Murphy said that much of his agency's most important work occurs behind the scenes, including the regular financial examinations of insurers for solvency. In addition, the office said it handled about 1,600 consumer complaints in 2010 and was able to help consumers win a settlement or other relief in about one-third of those cases. Similar data from 2011 was not available.

Murphy also has the confidence of Governor Deval Patrick, who appointed him two years ago. In a statement, Patrick called Murphy "an exceptional insurance commissioner," who has helped consumers save hundreds of millions of dollars while strengthening the industry.

As for the constant barrage of criticism, Murphy said, it's just part of the job. To remind him of that, he keeps a small slip of paper in his wallet with a quote from one of his predecessors, Linda Ruthardt: "Whoever is commissioner of insurance is automatically the most hated person in the Commonwealth."

Todd Wallack can be reached at twallack@globe.com. Follow him on Twitter @twallack.

© Copyright 2012 Globe Newspaper Company.

Saturday, July 28, 2012

Dallas-Area Home Insurance Rates Can Vary by Hundreds, Review Finds - Eye on Texas Blog (blog)

AUSTIN — Homeowners in some parts of the Dallas area are paying hundreds of dollars more a year for insurance than their counterparts across town, even though they have similar homes, coverage and claim histories.

New rate figures compiled by the Texas Department of Insurance, analyzed by The Dallas Morning News, show wide disparities in the metropolitan area.

"Arlington is simply not 37 percent riskier than for folks a few miles away in Plano," said Alex Winslow of Texas Watch, a consumer group that follows insurance issues. "These are similar communities with similarly valued homes that face the same weather risks."

Winslow said the differences show that insurance companies "are arbitrarily slicing and dicing communities and manipulating … rating models that ignore common sense."

Read More: The Dallas Morning News

Home insurance aids employers - The Tennessean

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Citizens board approves insurance rate hike - CBS News

MIAMI — The governing board of Florida's insurer of last resort approved an average rate increase of at least 8.8 percent Friday for most of its homeowner policyholders beginning next year.

The Citizens Property Insurance Corp. hike could go as high as 10.2 percent on average if state regulators accept an alternative version taking into account the risks of a major hurricane striking the state. Officials contend these risk factors wouldn't count toward a 10 percent cap on annual increases mandated by state law.

The Citizens board could have opted for a lower 7.5 percent rate hike, but that would have been coupled with a new $15,000 limit on non-flood water damage. Several board members balked at that potential cost-savings measure, saying it would be far too low to cover damage from such things as burst pipes for many homeowners.

"I am opposed to any type of limit on water damage," said board member Nancy Baily. "It's a peril we need to continue to cover."

One option would be to set a water damages cap but still allow policyholders to buy additional coverage if they wish. Several board members said they would return to the issue in the future. Water damage not caused by floods is one of Citizens' major loss areas. The federal government sells flood insurance.

"I want to keep it on the table," said board member John Wortman.

The 2013 rate increase will be higher in certain areas prone to sinkhole damage, mainly in the Tampa Bay area.

State-backed Citizens has grown to become Florida's largest property insurer, with 1.4 million policyholders. Many private home insurers abandoned Florida as far too risky following the extremely active 2004 and 2005 hurricane seasons. Citizens now has a surplus of more than $6.1 billion, in large part because the state hasn't been struck by a hurricane since.

Citizens officials say its rates are far too low to remain competitive. It has been working over the past two years to shed policies by moving them into the private market, in part to prevent taxpayers from having to foot a big chunk of the bill if a major hurricane slams into Florida.

So far, getting rid of Citizens customers has been slow going.

Company Chief Financial Officer Sharon Binnun told the board Friday that about 100,000 policies have been shed over the past two years, including about 80,000 this year.

"That's a really good thing for Citizens," she said.

The proposed 2013 Citizens insurance rates proposals will be submitted to the state Office of Insurance Regulation, which has another 45 days to approve or disapprove them.

_____

Follow Curt Anderson on Twitter: http://twitter.com/Miamicurt

Friday, July 27, 2012

Quotemehappy Partners With comparethemarket.com on Home Insurance - Sacramento Bee

/PRNewswire/ --

comparethemarket.com, one of the UK's leading price comparison websites, has announced that Quotemehappy.com is joining its panel for home insurance. The move is intended to build upon the success of the ongoing partnership in car insurance.

An online-only insurance company, Quotemehappy.com offers a range of low cost home insurance deals. The insurer gives customers the ability to tailor their level of cover to best suit their requirements. With the choice of adding options as needed, homeowners can design a unique policy and pay only for the cover they need.

Prior to joining the comparethemarket.com home insurance panel, Quotemehappy.com teamed up with the comparison website to offer great deals on car insurance. The insurer has been a member of the comparethemarket.com car panel since December 2011.

Simon McCulloch, Director of Insurance at comparethemarket.com, said: "As our car insurance partnership continues to deliver for our customers, we are delighted to be able to work with Quotemehappy to offer good deals on home insurance too. comparethemarket.com makes it easy for homeowners to find the perfect quotes at great value prices."

Marco Distefano, managing director of Quotemehappy.com, said: "Like our car insurance, Quotemehappy.com home insurance sets out to provide customers with extensive and variable levels of cover at competitive prices. We're putting customers in control - they can choose the level of cover that's right for them and manage or amend their policy at any time online at no extra charge."  

Specialising in more than just home insurance, comparethemarket.com provides customers with an easy way to find the right deal on a wide range of insurance and financial products including car insurance, van insurance, bike insurance, life insurance, pet insurance and credit cards.  It also offers comparisons for a range of household utilities including electricity, gas, phone, broadband and digital TV.

About comparethemarket.com

  • comparethemarket.com was launched in 2006 and has grown rapidly over the past six years to become one of the UK's leading price comparison websites.  
  • comparethemarket.com provides customers with an easy way to make the right choice for them on a wide range of products including motor, home, life, travel and pet insurance as well as utilities and money products such as, credit cards and loans.
  • comparethemarket.com actively selects its brand partners, working with the best and most trusted organisations to ensure quality service to consumers.

comparethemarket.com is a trading name of BISL Limited.  BISL Limited is authorised and regulated by the Financial Services Authority. Registered Address: Pegasus House, Bakewell Road, Orton Southgate, Peterborough, PE2 6YS. Registered in England number 3231094.

SOURCE comparethemarket.com

Citizens board voting on insurance rate hike - Sacramento Bee

The governing board of Florida's insurer of last resort is preparing to vote on a proposed increase of at least 7.5 percent for most policyholders.

The Citizens Property Insurance Corp. board was set to vote on the rate hike request Friday in Miami. The state-backed Citizens is Florida's largest property insurer with 1.4 million customers. Citizens by law cannot raise rates more than 10 percent per year.

Many private home insurers abandoned Florida because of the threat of catastrophic hurricane damage. Others have sharply raised rates because of the risk.

The Citizens rate increase would be higher for homeowners in areas at most risk for sinkholes.

The proposed increase must also be approved by state regulators.

Citizens is cutting policies to reduce its potential exposure to major hurricane damage.

Quotemehappy Partners With comparethemarket.com on Home Insurance - MarketWatch (press release)

LONDON, July 27, 2012 /PRNewswire via COMTEX/ -- comparethemarket.com, one of the UK's leading price comparison websites, has announced that Quotemehappy.com is joining its panel for home insurance. The move is intended to build upon the success of the ongoing partnership in car insurance.

An online-only insurance company, Quotemehappy.com offers a range of low cost home insurance deals. The insurer gives customers the ability to tailor their level of cover to best suit their requirements. With the choice of adding options as needed, homeowners can design a unique policy and pay only for the cover they need.

Prior to joining the comparethemarket.com home insurance panel, Quotemehappy.com teamed up with the comparison website to offer great deals on car insurance. The insurer has been a member of the comparethemarket.com car panel since December 2011.

Simon McCulloch, Director of Insurance at comparethemarket.com, said: "As our car insurance partnership continues to deliver for our customers, we are delighted to be able to work with Quotemehappy to offer good deals on home insurance too. comparethemarket.com makes it easy for homeowners to find the perfect quotes at great value prices."

Marco Distefano, managing director of Quotemehappy.com, said: "Like our car insurance, Quotemehappy.com home insurance sets out to provide customers with extensive and variable levels of cover at competitive prices. We're putting customers in control - they can choose the level of cover that's right for them and manage or amend their policy at any time online at no extra charge."

Specialising in more than just home insurance, comparethemarket.com provides customers with an easy way to find the right deal on a wide range of insurance and financial products including car insurance, van insurance, bike insurance, life insurance, pet insurance and credit cards. It also offers comparisons for a range of household utilities including electricity, gas, phone, broadband and digital TV.

About comparethemarket.com

comparethemarket.com was launched in 2006 and has grown rapidly over the past six years to become one of the UK's leading price comparison websites.

comparethemarket.com provides customers with an easy way to make the right choice for them on a wide range of products including motor, home, life, travel and pet insurance as well as utilities and money products such as, credit cards and loans.

comparethemarket.com actively selects its brand partners, working with the best and most trusted organisations to ensure quality service to consumers.

comparethemarket.com is a trading name of BISL Limited. BISL Limited is authorised and regulated by the Financial Services Authority. Registered Address: Pegasus House, Bakewell Road, Orton Southgate, Peterborough, PE2 6YS. Registered in England number 3231094.

SOURCE comparethemarket.com

Copyright (C) 2012 PR Newswire. All rights reserved

AA: Home insurance premiums remain flat in Q2 but set to rise - Insurance Age

The average cost of an annual home insurance policy, both buildings and contents, fell slightly over the second quarter of 2012, according to figures released by the AA.

It said that despite the reduction, with the average cost of a building policy falling by 0.8% and the average cost of a contents policy falling by 0.1%, home insurance prices were flat.

The AA attributed the lack of movement to both the competitive nature of the market, the mild winter and fine weather at the beginning of the year.

However, Simon Douglas, director of AA Insurance, added: "Since then we experienced the wettest June on record and the bad weather has continued into July, resulting in flood insurance claims approaching £200 million, according to some estimates.

"While on their own these claims are unlikely to result in the kind of premium increases we saw after the 2007 floods, when the average quote for a buildings policy increased by 21.9%, insurers are likely to respond by resuming the upward premium trend sooner rather than later."

Mr Douglas said that what marked recent flooding incidents was that in many cases they occurred in areas with little or no history of flooding, instead arising out of extreme rainfall which led to flash floods from surface water, as opposed to flooded river systems.

He also pointed out that insurers have seen a rise in other weather damage, caused by high winds and even tornadoes.

He commented: "The kind of weather that has been battering Britain recently reflects an increasingly unpredictable pattern that insurers need to take account of when setting their premiums.

"They need to have adequate reserves in order to meet future claims."

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Thursday, July 26, 2012

Real: Homeowners pay for many kinds of insurance - The Republic

A typical homeowner has multiple insurance policies beyond a standard homeowners insurance policy. Some types of insurance are optional and some are mandatory, depending on your location and whether you have a mortgage. Some insurance policies protect you directly, while others safeguard your lender. — Mortgage insurance protects the lender or investor against default from the borrower, says Anthony Guarino, vice president of public policy development and research at Genworth Financial Mortgage Insurance in Raleigh-Durham, N.C. The borrower pays the insurance premium, even though the lender is the beneficiary. Usually, the premium is added to the monthly mortgage payment.

Private mortgage insurance, or PMI, is required for conventional loans with down payments of less than 20 percent. Premiums vary according to the characteristics of the mortgage loan and the borrower, Guarino says.

"PMI was created because lenders were unwilling to make loans with a lower down payment because of the risk," says Guarino. "Without PMI, homebuyers would have to come up with a 20 percent down payment for their purchases."

Private mortgage insurance has a government counterpart: the Federal Housing Administration, which insures FHA loans.

Title insurance protects the policyholder against claims about rightful ownership of a piece of property. If you borrow money to buy a home, your lender will require title insurance.

"Title insurance for the lender is issued for the amount of the mortgage loan and only lasts until the loan is paid in full," says Jeremy Yohe, director of communications for the American Land Title Association in Washington, D.C. "The policy protects the lender to ensure the enforceability of the title."

Regulations about title insurance vary. In some states, owner's title insurance is voluntary, while in others it is mandatory for homebuyers.

Homeowners insurance, also known as hazard insurance, is required by the lender if you have a mortgage. If you pay cash for your home this insurance is optional, although financial experts recommend insuring your property against fire, theft and other potential losses.

"The idea of homeowners insurance is to be able to replace the property to the condition it was in the minute before the loss occurred," says Dan Muhlenkamp, owner of the Preferred Insurance Center in Coldwater, Ohio. "The lender doesn't want the property to be worth less than the value of the mortgage, so that's why lenders insist on insurance coverage."

After a loss, you will receive payment directly from the homeowners insurance company after a claim is processed. In some cases, your lender's name will also be on the payment.

"An insurance company will help you figure out how much coverage you need based on an estimate of what it costs to rebuild the home," Muhlenkamp says.

Some lenders require homeowners to pay their home insurance premiums through an escrow account with their mortgage payment in order to make sure the policy is kept current, but homeowners can sometimes opt to pay the premiums on their own.

Homeowners insurance covers most things, Muhlenkamp says -- fire, theft, wind damage "and even things like a deer running through your window."

But a standard homeowners policy doesn't cover everything. "That list of exceptions is fairly long and includes things like acts of war, earthquakes and floods," Muhlenkamp says.

Homeowners can add "endorsements" to policies to cover losses from events that aren't covered by the standard policy.

"Earthquake insurance can be added to a standard policy, but the price varies widely according to where you live and how likely it is you'll have an earthquake," Muhlenkamp says. "The deductible for an earthquake is a lot higher than your normal deductible, usually 5 (percent) or 10 percent of your coverage. On a $300,000 home, that means the deductible would be $15,000 or $30,000."

Flood insurance is a separate policy, bought from the federal government.

"If you live in a designated flood zone, you'll be required by your lender to buy flood insurance," Muhlenkamp says. "Even if you are not in a flood zone, you should probably consider buying it after doing some investigation into the likelihood of a flood at your home. Flood damage can be very costly and will not be covered by a standard homeowners insurance policy."

Muhlenkamp recommends a "water backup of sewers and drains" endorsement on a standard homeowners insurance policy for all homeowners with a basement because it's an inexpensive add-on that will provide coverage if a blockage causes water to flood the basement.

Homeowners insurance policies generally provide a designated level of coverage for personal property, but Muhlenkamp recommends buying supplemental coverage for items such as jewelry, art, collectibles or guns that are not covered by the standard policy.

X...X...X

Mortgage rates dropped to new lows this week as signs continue to point to a slowing economy in the United States.

The 30-year fixed-rate mortgage fell 3 basis points to 3.75 percent. A basis point is one-hundredth of 1 percentage point.

The 15-year fixed-rate mortgage fell 4 basis points to 3 percent. The average rate for 30-year jumbo mortgages, or generally for those of more than $417,000, fell 5 basis points to 4.38 percent.

The 5/1 adjustable-rate mortgage, or ARM, was 2.89 percent, the same as last week. With a 5/1 ARM, the rate is fixed for five years and adjusted annually thereafter.

The volume of mortgage applications increased 0.9 percent last week compared to one week earlier, according to the Mortgage Bankers Association.

(Distributed by Scripps Howard News Service. Reach Michele Lerner at editors(at)bankrate.com)

Consumer advocate slams Citizens insurance over inspections - Sun-Sentinel (blog)

Westcott_Robin_1.JPGInsurance Consumer Advocate Robin Westcott on Thursday criticized Citizens Property Insurance's push to inspect homes and revoke discounts for hurricane-resistant features.

"Hardening of homes is the only way Floridians have to help control...the spiraling cost of insurance in this state," she said. "The more they hear, 'I didn't get anything for doing that,' the less they're going to" make upgrades.

Westcott said the inspections are also hurting the state's housing market: "You might get to the closing table [to find out] you can't afford to buy that house anymore because the insurance is going to be greater than you expected. We've heard a lot of realtors say potential sales go away."

Westcott recommended, among other things, that Citizens rewrite information sent to consumers with "plain language;" require inspectors to pull permits and provide detailed information to policyholders before the inspections; provide space for policyholders' comments on forms filled out during the inspections; and inform policyholders of why specifically they don't qualify for a certain discount so they can consider making the right upgrades.

Carol Everhart, a Citizens board member and the committee's leader, asked Westcott to help Citizens draft a brochure to make the process easier to understand. Citizens' employees plan to research some of Westcott's other recommendations before bringing proposals back to board members for consideration.

Westcott said her office is also concerned about a proposal to raise new Citizens policyholders' rates by more than its current cap of 10 percent a year and reduce coverage for water losses to $15,000. The insurer's board plans to vote on the proposals at a meeting in Miami Friday.

Complaints about inspections

Westcott described a consumer who had three inspections done by Citizens' contractors and each had a different result. One inspector pulled permits and took a photo of roof clips to help the consumer score discounts. The other two did not pull the permit and wrote "other" instead of noting the clips were there. "What is 'other'? Well, they lost all of their credits," she said.

"That is unfair," she said. "We are not doing the right thing by the consumer here."

She also said many consumers have windows with etchings on them that prove they're hurricane resistant if they're looked up at Home Depot. "It's discoverable...Just because it's not bloody obvious, [doesn't mean] they're not entitled to the discount," she said.

Westcott said the state has gotten complaints about inspections from consumers, bankers, real estate agents, inspectors, public adjusters and others. We'll note how many complaints the state has received when we get the information.

Citizens said only 3 percent of policyholders who had inspections done disputed them and only 1 percent received additional discounts after disputing the findings.

Are inspectors told to remove discounts?

Westcott questioned what Citizens is telling the inspectors. "We've got some folks out there that either aren't doing it correctly or are doing it under instructions to take the credit away," she said.

Citizens' executives said the insurer is doing the inspections so premiums and discounts are based on accurate information, not to raise premiums. "By no means, [are there] any instructions...to take away wind mitigation credits," said Yong Gilroy, Citizen's chief insurance officer. "We're trying to do all the right things" but Citizens employees have to balance what regulators, policyholders, board members and elected officials want.

Some policyholders have asked whether inspectors receive financial incentives for taking discounts away. Citizens Spokeswoman Christine Ashburn said, "Absolutely not."

Citizens' board meeting is Friday at 9 a.m. at the Marriott Hotel, 11099 Brickell Ave., Miami.

Wednesday, July 25, 2012

Home insurance premiums flat - Easier (press release)

The latest benchmark AA British Insurance Premium Index shows that the cost of an annual home insurance policy, both buildings and contents, fell very slightly over the second quarter of 2012.

However, the trend continues to be upward.  Over the 12 months to 30 June 2012, the cost of a buildings policy rose by 6.9% to £176 (a fall of 0.8% over the second quarter), while the cost of contents cover rose 4.8% to £92 (a fall of 0.1% over the second quarter), according to the Shoparound index.  This is an average of the five cheapest premiums for each property in a country-wide basket of risks, from a range of insurers, brokers and schemes.

Simon Douglas, director of AA Insurance, says that the lack of movement over the past three months reflects both the competitive nature of the market as well as a mild winter and fine weather during the first part of the year.

"Since then we experienced the wettest June on record and the bad weather has continued into July, resulting in flood insurance claims approaching £200 million, according to some estimates," he says.

"While on their own these claims are unlikely to result in the kind of premium increases we saw after the 2007 floods, when the average quote for a buildings policy increased by 21.9%, insurers are likely to respond by resuming the upward premium trend sooner rather than later.

"What marks the latest flooding events is that in many cases, they are happening in places with little or no history of flooding.  They have followed extreme rainfall over a relatively short period, resulting in flash floods from surface water rather than flooded river systems," Mr Douglas points out.

Not only that, insurers have seen a rise in other weather damage - high winds and even tornadoes tearing up trees, toppling chimneys and ripping off roof tiles.

"The kind of weather that has been battering Britain recently reflects an increasingly unpredictable pattern that insurers need to take account of when setting their premiums.

"They need to have adequate reserves in order to meet future claims."

Future flood cover:

The Government is currently discussing with the insurance industry a way of providing cover for homes that are in known flood zones.  According to the Committee on Climate Change, 4.1m properties are at some flood risk while 330,000 are at 'significant' risk, an increase of 12 per cent over the past decade.

"These discussions seek to provide an agreement to replace the 'Statement of Principles' that has enabled flood-prone homes to be insured since 2000, but this expires at the end of June 2013," Mr Douglas says.

"It's vital that these negotiations are concluded sooner rather than later or there will be a risk that many people won't be able to obtain flood cover, with all the implications that has for property values and mortgages."

Mr Douglas says that there has been a lot of speculation that any solution will result in premium increases for everyone, in order to subsidise those who are unfortunate enough to live in a flood zone.  He is urging the Government to ensure that there is:

No additional cost to homeowners

Ensure the agreement doesn't create incentives to encourage house building high flood risk areas

Support for home owners who have suffered past flood damage to improve the flood resilience of their properties to keep future costs down

Real investment in flood defences to reduce the impact of adverse weather and the costs it creates.

NewsChannel 10 Investigates: Spike in homeowners Insurance rates - KFDA

AMARILLO, TX - Texas ranks third in the nation when it comes to having the highest homeowners insurance rates and residents are now beginning to feel the pinch.

A new report released from the Texas Department of Insurance says rates have increased 21-percent since 2009.

Finding out exactly what was behind the increase took several days of research because insurance agents were turning their head the other way when we asked them for an explanation.

You'd expect insurance agents to be able to discuss insurance rates, but that has proven to be difficult.

State Farm's corporate office in Austin informed us they didn't have any knowledgeable agents in the entire Texas Panhandle who could talk to us about the state's report showing a steep increase in premiums over the last 3 years.

We also put in calls into the Allstate located at 3913 Bell St., but the secretary who answered the phone had no idea what we were talking about and said she didn't know anyone who knew about the increase.

Texas Insurance located at 1700 E. 16th St. also knew nothing about increased rates.

"The company doesn't want them speaking for the company on matters of rates and so forth so that's why there is probably some reluctance," Rep. John Smithee explained.

Smithee is the Chairman of the House Insurance Committee. He's well aware of the state's report, and says it doesn't surprise him. However, what drives up your rates may surprise you!

"The real load factor is a hail storm," Smithee said. "People assume it's tornadoes but it's really hail storms because that damage can we so widespread and so expensive."

The latest hail storm this year hit Lubbock back in June. While the north and northeast parts of Texas pay for tornado and hail damage, you're still having to pick up the pieces for the devastation that strikes the southeast coast.

"Hurricane Ike produced quite a bit of damage along the southeast Texas gulf coast including Galveston and the Houston area," Justyn Jackson with the National Weather Service said.

Ike caused billions of dollars in damages, and you're paying for it.

"It's something I've been working on for 15 years of trying to somehow detach the rest of the state from the tremendous exposure that the companies are subjected to in the coastal areas," Smithee said.

That's one of the biggest factors Smithee says has resulted in increased rates. He believes rates would decline if we didn't have the burden of dealing with coastal disasters. More importantly, he says the state needs to keep a close eye on insurance claims when catastrophic events occur.

"Insurer's can take advantage of a situation here in Texas and write premiums a little higher than they should, or significantly higher than they should," Smithee said. "We've got to be real vigilant to make sure that's not happening."

There are ways to save on insurance rates. One of the easiest ways to shrink your bill is by bundling homeowners insurance with auto insurance. However, if you're still not happy with your rate, it pays to shop around. 

There are more than a dozen home insurance carriers in the Amarillo area.

Citizens Property Insurance class-action awards could be at least $3000 - NOLA.com

Baton Rouge -- A total of 18,573 plaintiffs in a lawsuit against the state-run property insurance company should get at least $3,000 each when the claims are paid this year or in early 2013, lawyers for the group said Tuesday. Fred Herman, one of the attorneys representing the plaintiffs who alleged that Louisiana Citizens Property Insurance Corp. did not properly follow its claims policy after Hurricanes Katrina and Rita in 2005, said approximately $105 million for the payments was turned over to the Jefferson Parish Sheriff's Office late Monday.

The next step will be a hearing on how the money will be paid out and how much the attorneys' fees and other legal costs will run. Herman said that the plaintiffs in the lawsuit could get paid between November and January.

Herman said 24th Judicial District Court Judge Henry Sullivan in Gretna, who has handled the case since it was filed in 2006, has a status conference with the lawyers scheduled for Aug. 3 to start working through the details of the cash distribution.

"There is no way it can be stopped at this point now," Herman said of the long-delayed payout to the members of the class-action lawsuit titled Geraldine Oubre et al. vs. Louisiana Citizens Fair Plan. "This is the final chapter in this part of the saga."

Herman said "several thousand" other claimants may also be involved in a separate award.

"As far as we are concerned they have come to the end of the road," said Wiley Beevers, another attorney in the class-action litigation. "Citizens has exhausted all legal remedies."

Richard Robertson, president and chief executive officer of Citizens, agreed. "The money is already gone" from the Citizens bank account at Regions Bank, he said.

Insurance Commissioner Jim Donelon said, "It is in their account. It is all over."

Herman said that award to the plaintiffs could be up to $4,000 each based on how much Sullivan awards to the lawyers for their fees. Based on past procedures, attorneys representing the class could get 25 percent to 40 percent of the award, he said.

Citizens has battled paying the claims for years, alleging that Sullivan granted the judgment without giving the state-run insurer of last resort a proper hearing and due process. The case at one point wound up before the U.S. Supreme Court, which refused to grant relief.

Sullivan originally awarded a judgment of $92.86 million to the members of the class action in 2009 but that has grown by $10,000 a day in interest since.

Herman said the approximately $105 million was turned over shortly after the state Supreme Court refused to delay the payments in a lawsuit that Citizens filed against Regions Bank, where the cash was held in an account.

The Baton Rouge-based 1st Circuit Court of Appeal took less than three hours Friday to deny Citizens' claim against Regions, setting up Monday's last-ditch appeal and rejection.

Robertson said that even with the award, Citizens "has more than adequate cash reserves to operate smoothly."

"We have a balance of $100 million to $110 million in cash reserves" but a large payout of claims from a storm this year "could put enormous pressure on the company."

Ed Anderson can be reached at eanderson@timespicayune.com or 225.342.5810.

Florida home insurers lining up for rate hikes - Sun-Sentinel

Although Florida has dodged a direct hit from a hurricane for almost seven years, three major home insurers want to raise rates.

Allstate's Castle Key Insurance and Castle Key Indemnity want 32.7 percent and 21.9 percent statewide average increases; Universal Insurance Co. of North America wants a 22 percent average increase and State Farm Florida wants a 14.9 percent average increase.

The Office of Insurance Regulation will hold a hearing Wednesday to question State Farm about its proposed 58 percent increase for policyholders who rent their homes instead of live in them. It has also scheduled hearings for Castle Key and Universal in the next two weeks.

Meanwhile, state-backed Citizens Property Insurance's board plans to vote Friday in Miami on proposed increases of up to 10 percent for existing policyholders and possibly more for new policyholders.

Dozens of Florida home insurers raised rates last year.

Combined, the Castle Key companies are Florida's fourth-largest home insurers after Citizens, Universal Property & Casualty Insurance — which is not related to Universal Insurance Co. of North America — and State Farm. Castle Key Insurance has 124,382 home insurance policies statewide, including 27,361 in Broward, Palm Beach and Miami-Dade counties. Castle Key Indemnity has 128,377 policies, including 12,558 in South Florida.

Castle Key Insurance's increase includes a 44.9 percent increase for condominium unit owners, 8.8 percent for renters and 25.9 percent for basic and broad homeowners coverage. In its rate proposal, it says it needs the increase because of the hurricane risk in Florida, the cost of capital and the cost of reinsurance, among other things.

Castle Key Indemnity's increase includes an 18.4 percent increase for homeowner policies, 23.9 percent for special, broad homeowners policies and 21.2 percent for renters. In its rate request, it says it needed a 63 percent increase last year but planned to implement the increase in two years as "an appropriate transition period."

Castle Key spokeswoman Cathy Mayo said the company has paid out more in claims and other costs than it has collected the past few years, which has "eroded" its cash-paying funds. "The rates filed reflect Castle Key's desire to preserve its financial ability to serve Florida customers over the long term, and stabilize and rebuild the company's reserves," she said.

"In Florida, it's not a question of 'if' a large storm will strike our shores, it's only a question of when,'" she added.

Universal Insurance Co. of North America wants a 22 percent statewide average increase, including a 24.5 percent increase for homeowner policies and no change for renters and condo unit owners.

Universal, based in Sarasota, is among the top 20 home insurers in Florida with 75,225 home insurance policies, including 10,566 in South Florida.

Kristen Watson, a spokeswoman for the company, said the proposed increase relects the costs of doing business in the state. "Universal North America is committed to providing long-term, stable coverage and programs to policyholders in Florida. Sometimes, this commitment requires us to make hard decisions," she said.

State Farm Florida breaks down its proposed 14.9 percent increase in three groups: 48.8 percent for renters, 27.3 percent for condominium unit owners and 14.2 percent for homeowners policies, including the 58 percent increase for landlords. The increases are due to changes the insurer wants to make on home insurance discounts and deductibles.

Farm spokeswoman Michal Connolly said the proposal includes increasing or reinstating some discounts.

The insurer has 466,797 home insurance policies, including 66,960 in Broward, Palm Beach and Miami-Dade counties.

Robin Westcott, the state's insurance consumer advocate, said the proposed 58 percent increase includes a 16 percent "profit and contingency factor," to account for unexpected costs: "This profit factor is excessive and unjustified, particularly for a company that is unwilling to write any new business and has non-renewed approximately 125,000 policies in our state over the last two and a half years."

"Factoring in a risk contingency when determining rates is an appropriate and widely accepted industry standard," Connolly said.

The State Farm hearing is at 9 a.m. Wednesday and can be viewed live online on the Florida Channel, thefloridachannel.org. The Citizens meeting is Friday at 9 a.m. at the Marriott Hotel, 11099 Brickell Ave., Miami.

The rate hearing for Universal is Aug. 2 and the Castle Key hearing is Aug. 7.

jvpatel@tribune.com, 954-356-4667 or Twitter @juliepatel

Tuesday, July 24, 2012

Florida home insurers lining up for rate hikes - Sun-Sentinel (blog)

Poll: Should the rate hikes be approved?
beachfronthomescropped.jpg

Three major home insurers in Florida want rate hikes: Allstate's Castle Key companies want 21.9 percent and 32.7 percent statewide average increases, Universal Insurance Co. of North America wants a 22 percent average increase and State Farm Florida wants a 14.9 percent average increase.

The Office of Insurance Regulation will hold a hearing Wednesday to question State Farm about its proposed 58 percent increase for policyholders who rent their homes instead of live in them. They've also scheduled hearings for Castle Key and Universal in the next two weeks.

Meanwhile, state-backed Citizens Property Insurance's board plans to vote Friday in Miami on its proposed rate hike, including a proposal to raise rates by more than 10 percent for new policyholders.

Dozens of Florida home insurers raised rates last year.

Castle Key Insurance and Castle Key Indemnity want a 32.7 percent increase and 21.9 percent increase, respectively.

Combined, the Allstate subsidiaries are Florida's fourth largest home insurers after Citizens, Universal Property & Casualty Insurance in Fort Lauderdale and State Farm. Castle Key Insurance has 124,382 home insurance policies statewide, including 27,361 in Broward, Palm Beach and Miami-Dade counties. Castle Key Indemnity has 128,377 policies, including 12,558 in Broward, Palm Beach and Miami-Dade counties.

Castle Key Insurance's increase includes a 44.9 percent increase for condominium unit owners, 8.8 percent for renters and 25.9 percent for basic and broad homeowners coverage. In its rate proposal, it says it needs the increase because of the hurricane risk in Florida, the cost of capital and the cost of reinsurance, among other things.

Castle Key Indemnity's increase includes an 18.4 percent increase for homeowners policies, 23.9 percent for special, broad homeowners policies and 21.2 percent for renters. In its rate request, it says it needed a 63 percent increase last year but planned to implement the increase in two years as "an appropriate transition period."

Castle Key Spokeswoman Cathy Mayo said the company has paid out more in claims and other costs than it has collected the past few years, which has "eroded" its cash-paying funds. "The rates filed reflect Castle Key's desire to preserve its financial ability to serve Florida customers over the long term, and stabilize and rebuild the company's reserves," Mayo said.

Universal Insurance Co. of North America wants a 22 percent statewide average increase, including a 24.5 percent increase for homeowners policies and no change for renters and condo unit owners.

Universal, based in Sarasota, is among the top 20 home insurers in Florida with 75,225 policies, including 10,566 in South Florida.

State Farm Florida breaks down its proposed 14.9 percent increase in three groups: 48.8 percent for renters, 27.3 percent for condominium unit owners and 14.2 percent for homeowners policies, including the 58 percent increase for landlords. The increases are due to changes the insurer wants to make on home insurance discounts and deductibles.

The insurer has 466,797 policies, including 66,960 in Broward, Palm Beach and Miami-Dade counties.

Regulators don't plan to hold a public hearing on State Farm's broader request for a 14.9 percent statewide average rate hike, which would be the insurer's sixth increase in 2.5 years.

The State Farm hearing is at 9 a.m. Wednesday and it can be viewed live online on the Florida Channel. The Citizens meeting is Friday at 9 a.m. at JW Marriott Hotel, 11099 Brickell Ave., Miami.

The rate hearing for Universal is Aug. 2 and the Castle Key hearing is Aug. 7.

Photo: Beachfront homes in Fort Lauderdale. (Google satellite image)

HomeAway Presents First-of-its-Kind Insurance Product Tailored for Vacation ... - MarketWatch (press release)

AUSTIN, Texas, July 24, 2012 /PRNewswire via COMTEX/ -- HomeAway, Inc. /quotes/zigman/5675710/quotes/nls/away AWAY -0.77% , the world's largest online marketplace for vacation rentals, now offers HomeAway Assure(TM), a CBIZ Insurance Program, the first insurance product tailored specifically for vacation rental properties featuring an online calculator that delivers a quote within five minutes.

Provided in partnership with CBIZ Insurance Services, Inc. /quotes/zigman/386841/quotes/nls/cbz CBZ +1.36% , HomeAway Assure enables any U.S. vacation home owner, not just HomeAway® customers, to insure their property with a policy designed to cover the risks specific to vacation rentals not included in many second home insurance policies:

Third-party liability coverage protects the homeowner against lawsuits or expenses associated with a renter suffering bodily injury while on the rental property.

Property damage and replacement cost coverage for the home and its contents are offered at varying deductible rates. This coverage extends to a home's amenities such as a swimming pool, watercraft or docks and piers.

Business interruption coverage protects against the loss of rental income as a result of an unexpected disruption such as a house fire, natural disaster or other coverable incident that would render the home unable to rent.

In less than five minutes, vacation rental owners can determine their individual cost of HomeAway Assure coverage using the CBIZ online policy quote calculator tool at: http://www.cbizspecialtyinsurance.com/HomeAwayAssure .

"It is a common misconception among owners that their vacation rental homes are adequately covered by traditional second home insurance policies," says CBIZ Insurance Services Senior Vice President Scott Wolf. "Where other second home policies fall short, HomeAway Assure will prove greatly impactful in the protection of vacation rental owners who can now receive comprehensive coverage for their homes."

"Vacation rental owners have such a strong, personal connection with their homes," says Brian Sharples, chief executive officer of HomeAway. "It's important for us to offer an insurance product that helps protect our customers' properties and preserve the vacation experience they share with their guests."

About HomeAway, Inc.

HomeAway, Inc., based in Austin, Texas, is the world's leading online marketplace of vacation rentals, with sites representing approximately 700,000 paid vacation rental home listings throughout 168 countries. HomeAway® offers an extensive selection of vacation homes that provide travelers with memorable experiences and benefits, especially more room to relax, for less than the cost of traditional hotel accommodations. The company also makes it easy for vacation rental owners and property managers to advertise their properties and manage bookings online. The HomeAway portfolio of websites includes HomeAway.com, VRBO.com and VacationRentals.com in the United States; HomeAway.co.uk and OwnersDirect.co.uk in the United Kingdom; HomeAway.de in Germany; Abritel.fr and Homelidays.com in France; HomeAway.es and Toprural.com in Spain; AlugueTemporada.com.br in Brazil; and HomeAway.com.au in Australia.

In addition, HomeAway operates BedandBreakfast.com, the most comprehensive global site for finding bed-and-breakfast properties, providing travelers with another source for unique lodging alternatives to chain hotels. For more information about HomeAway, please visit www.HomeAway.com .

About CBIZ, Inc.

CBIZ, Inc. provides professional business services that help clients better manage their finances and employees. CBIZ provides its clients with financial services including accounting, tax and consulting, internal audit, merger and acquisition advisory and valuation services. Employee services include employee benefits consulting, property and casualty insurance, retirement plan consulting, payroll, life insurance, HR consulting, and executive recruitment. CBIZ also provides outsourced technology staffing and support services, healthcare consulting, and medical practice management. As one of the largest benefits specialists and one of the largest accounting, valuation, and medical practice management companies in the United States, the Company's services are provided through more than 130 Company offices in 37 states.For information contact: Adam AnnenPublic Relations ManagerHomeAway, Inc.512-505-1548aannen@homeaway.com

SOURCE HomeAway, Inc.

Copyright (C) 2012 PR Newswire. All rights reserved

/quotes/zigman/5675710/quotes/nls/away

US : U.S.: Nasdaq

Volume: 403,047

July 24, 2012 12:59p

/quotes/zigman/386841/quotes/nls/cbz

US : U.S.: NYSE

Volume: 17,583

July 24, 2012 12:54p

Market Cap

$294.54 million

Rev. per Employee

$146,028

How to calculate the value of your home contents - The Independent

If you have recently moved into a beautiful new home it's time to consider home insurance. Home insurance is one of those things that shouldn't be forgotten; you never know when an accident or break in can occur and whilst these incidents are heartbreaking, they are much easier to manage when you have the correct home insurance in place.

In order to organise home insurance you will need to accurately calculate the value of your belongings. This isn't the simplest of tasks, so here's a quick guide to get you through the process.

In order to calculate the value of your home contents you will need a pen and paper. First, we recommend that you list out each room in your home – underneath each room, you should write a list of all of the valuable items that the room contains. Do this for each room in turn. We then recommend that you sit down and write the value of each object next to it on your list. Many objects can be bundled together with one value, for example clothes or DVDs.

A great tip at this stage is to get a second opinion. Ask your partner or a close friend to walk through the house and compile his or her own list. Once they've done this, you can see how close the two values are and amend your list accordingly. If you are unsure about the value of certain objects then you can search on the Internet. Ebay or Amazon are both great sites to use in order to see how much items cost on the market.

Now you have a list of values for each of your belongings, it's time to find an insurance broker. There are many insurance brokers working in the UK, but we recommend that you work with a well-established company whom you can trust. Different insurance companies will offer a varied range of insurance services but the most common are home insurance and contents insurance.

The benefit to setting up home insurance cover is that it will cover your building against damage. Most home insurance providers will also include contents insurance as part of the home insurance policy. Home insurance will cover damage to walls, roofs and patios when caused by disasters such as smoke, fire or flooding.

Contents Insurance alone will not cover damage to your building. The purpose of contents insurance is to insure against damage or theft to any belongings that you own inside your house. Some content insurance providers will also insure against accidental damage.

Of course, you may find that these two varieties of home insurance won't fulfil all of your needs. This may be the case if you have special value objects such as a bicycle or top of the range computer. If this is the case you should look for specific additional insurance cover such as cycle cover, which will insure against damage or theft of your bicycle.

Once you have your home and contents insurance set up, store all insurance documents carefully and safely. It is also worth keeping your original evaluation lists for your personal records. At regular intervals check these lists to make sure that your cover is still accurate. Whenever you make a new and valuable purchase you should also let your insurance company know so that they can adjust your insurance levels whenever necessary.

 

Kemper Home Service Companies Recognized Among Ward's 50 Top Life ... - TheStreet.com (press release)

Kemper Corporation (NYSE: KMPR) announced today that United Insurance Company of America, flagship of Kemper Home Service Companies, was named as one of the top 50 performing life insurance companies by Ward Group for 2012. This marks the company's second consecutive year to receive this recognition.

"This is a significant achievement for our Kemper life insurance business," said Donald G. Southwell, Kemper's Chairman, President and Chief Executive Officer. "This award recognizes the dedication and hard work of our team in consistently providing top-quality products and services for our customers." Ward Group is a leading provider of benchmarking and best practices services for the insurance industry. Each year, the group analyzes the performance of nearly 800 life and health insurance companies and evaluates them based on financial stability, revenue growth, capital/surplus positions, underwriting results, and financial returns. Ward Group then identifies the top 50 as having achieved superior performance in all categories. Kemper Home Service Companies has been recognized as one of Ward's Top 50 in 2008, 2011 and 2012. About Kemper Kemper is a diversified insurance holding company with subsidiaries that provide an array of products to the individual and small business markets: Kemper markets to its customers through a network of independent agents, brokers and career agents. Additional information about Kemper is available by visiting kemper.com. >To order reprints of this article, click here: Reprints

Monday, July 23, 2012

Citizens Property Insurance revoking discounts for hurricane proofing home ... - WPTV

Citizens Property Insurance's push to inspect homes and revoke discounts for hurricane-resistant features has drawn fire and questions.

Premiums went up for nearly three-fourths of the 225,502 homeowners who have had the inspections. About 7 percent had decreases, and there was no change for 18 percent. The average inspection resulted in a $598 increase.

State-backed Citizens is the largest property insurer in Florida with 1.4 million policies.

We answer common questions about the inspections.

Why is Citizens doing the inspections?

Citizens found many forms used to verify discounts weren't filled out correctly and it appeared some customers were getting discounts they didn't deserve.

Citizens plans to conduct about 138,000 more residential inspections this year.

Some people think Citizens is using the inspections as a back-door way to raise premiums more than 10 percent a year – a cap set by state law. Citizens estimates premiums increased by $137 million based on inspections done so far. The insurer has spent $35 million on the inspections.

"The purpose of this program is not to circumvent the 10 percent cap," said Citizens spokeswoman Christine Ashburn. "Citizens provides $1 billion in credits annually to its policyholders. It is imperative that we only provide credits for policies which actually contain the wind mitigation features."

She said it's even more critical because the insurer has the ability to charge fees to nearly all Floridians to offset deficits if there's a major hurricane.

What should customers do to prepare for the inspections?

Customers should make sure shutters and other hurricane-resistant features are easy for the inspector to examine. Shutters don't have to be up, but the hardware that holds them in place should be permanently installed around the openings. Attics should be cleared out in advance so the inspector can verify certain features of the property such as how the roof is connected to the walls. Inspectors can remove credits for features they can't see, and they don't have to wait if the features aren't ready to inspect, according to Citizens.

Wayne Bragg, of Davie, said Citizens sent an inspector last year and the discounts were approved. This year, the inspector said he couldn't see the trusses in his attic because insulation was in the way, and he was unsure if all the shutters were there because they were stacked up – which Bragg disputed. After the inspection, Bragg said Citizens informed him his $4,700 annual premium would increase by $3,000 because discounts were removed and his roof is too old.

Policyholders should also have copies of contracts, building permits, receipts and other paperwork that document the home's upgrades.

Marc Velletri, of Wilton Manors, said a Citizens inspector questioned the hurricane-impact windows installed in his home in 2005. "Anyone can tell they are impact windows and all were labeled plus I had one of the original removable labels and Home Depot receipts. But he argued because some of the white print on the glass was difficult to make out," Velletri wrote in an email.

Diana Latzko, a Citizens policyholder in Davie, gathered an arsenal of documents and permits before a Citizens' inspector showed up at her home to verify hurricane-resistant upgrades. "I had a whole folder of everything, approval codes [and] clingy, silicon" stickers she said. Still, the insurer planned to increase her roughly $1,500 annual premium by $148. She successfully fought that with additional documentation.

Ashburn said Citizens can't comment on information about specific policyholders because of confidentiality requirements.

What happens after the inspection and when would the premium change happen?

A letter with the results of the inspection is mailed about 45 to 60 days after the inspection and it includes instructions on how to get a copy of the inspection report. Premiums increase at renewal for customers whose discounts are removed, and any new discounts take effect immediately, according to Citizens.

What happens if policyholders can't afford the higher premium?

Customers can dispute the findings by giving Citizens or their agent photos of the discrepancy and documentation, including a new inspection report paid for by the policyholder; roof permits; notice-of-acceptance letters for doors, shutters and other wind-resistant features; and invoices, sales receipts and other documents that show details of the products and work done.

Policyholders who don't prevail can try increasing the policy's deductible and lowering coverage, which should lower the premium. They can also shop around. But going with another insurer doesn't mean you're safe from getting re-inspected by the new company and losing discounts.

Homeowners with mortgages who can't afford the higher premiums could face losing their homes to foreclosure.

Should consumers consider making upgrades after the inspection and how can they qualify

for discounts?

Latzko said she had the frame around her door redone to qualify for a discount after an inspector she hired a few years ago suggested it. She said she got the original discount because the inspector allowed her to make the upgrade before he returned to inspect the home.

Once the work is done, policyholders should give Citizens or their agent proof of it. They can order a remediation inspection at a reduced fee of $50 to $100, according to Citizens.

Before you make the upgrades, do the math. The upgrades will make your home safer, an important benefit, but if you're strapped for cash, be clear on how much your premium would change if you make a certain improvement and whether the product you're using will qualify. Ashburn said Citizens can only provide an estimate of potential savings when it sends a renewal notice.

Paul Stuart, a Boca Raton resident and Coconut Creek City Attorney, said Citizens incorrectly had his opening protection discount removed after an inspection. That and some higher coverage limits made his annual premium increase $638 to $4,466. When Citizens later restored the opening protection status from "none" to "Class A," his premium only decreased by $22, or less than half a percent. In a complaint to state regulators, he said Citizens is overcharging people with hurricane-resistant protection while getting the benefit of reduced financial exposure, and the process reduces incentives for people to upgrade their homes.

More information about the inspections is available by clicking on the "frequently asked questions" tab at https://www.citizensfla.com/policyholder/about_inspection_outreach.cfm .

British Homeowners Going for Gold - PR Newswire (press release)

CHESTER, England, July 23, 2012 /PRNewswire/ --


  • Specified items of gold on insurance policies have more than doubled over the last two years
  • Average insured value of gold not increased in line with gold prices
  • Almost a third of Brits have bought items of gold recently

The number of British consumers specifying items of gold on their home insurance policy has more than doubled over the past two years, but homeowners are potentially leaving themselves underinsured due to the rising cost of gold according to analysis of 3.2 million quotes through MoneySupermarket.

The fifth edition of the MoneySupermarket Monitor on home insurance,* reveals recordings of specified items of gold on insurance policies have more than doubled since Spring 2010, with an increase of 103 per cent. However, despite the price of gold rising by an astonishing 43 per cent over the past two years, the average insured value of gold listed on policies has only risen by 5.8 per cent, suggesting many households could be considerably underinsured.

Further research by MoneySupermarket.com revealed a third of UK adults (28.9 per cent) have bought items of gold recently, with 16 per cent buying it as an investment.*** A fifth of those (21 per cent) have added the gold onto their home insurance policy as a specified single item. A further 30 per cent have not specified their gold on their insurance policy as they don't believe the value is high enough and another 19 per cent simply can't be bothered to add their gold onto their policy as a specified item.

Julie Fisher, head of home insurance at MoneySupermarket, said: "Many perceive gold as a 'safe haven' asset during these challenging economic times, and the cost of gold has increased markedly over the past few years. However, our analysis shows that the average insured value of gold items has not risen in line with the market increases and many people could find their precious items are underinsured. It is therefore important people reassess the value of any gold they own. I urge people to make sure the increased value of their gold is reflected in their insurance policies rather than simply rolling over the insured value year after year. A gold ring, which may have cost a couple of hundred pounds several years ago, may now be worth four or five times that value, so it is worth seeking a professional valuation.

"If you underinsure items on your policy, many insurers will invoke a condition of average clause which means you would only receive a percentage of the actual value of an item should you make a claim.

"Additionally, it is essential to add any specified items over £1,500 on your home insurance policy to ensure you don't take any risks which mean you are not covered for those items in the event of an accident or burglary."

* MoneySupermarket Monitor Fifth Edition. Based on 3,180,114 million home insurance quotes from 1stJune 2011 - 31stMay 2010.

The full report is available at: http://www.moneysupermarket.com/home-insurance/monitor/

** Seasonally:

Spring: March-May

Summer: June-August

Autumn: September -November

Winter:  December-February

*** Research run by One Poll on 11.07.12. Based on 1000 respondents.

MoneySupermarket.com compares (at 20th June 2012)

  • 100 car insurance providers and 81 home insurance providers
  • 12 broadband providers and 18 energy providers   
  • 32 unsecured loan and 6 secured loan providers
  • 58 mortgage lenders and 28 credit card providers
  • 67 savings providers and 37 current account providers.
  • Over 1,700,000 mobile phone deals

Our customers

We help our customers to save money on all of their household bills by providing a free, easy to use online service so they can compare a wide range of products in one place and find the product most suited to their needs. Our size means we are able to offer our customers exclusive, market-leading deals, including some they can't even get direct from providers.

Our providers

By having considerable volumes of informed customers actively looking for products and ready to purchase, we offer our providers an efficient and cost effective customer acquisition solution across all of our channels. This enables our providers to target their marketing spend in an effective and completely measurable way.

Our revenue comes predominantly from fees paid to us by product providers when a customer clicks through to their website and actually applies for or purchases a product. It is a success based marketing fee.

Our customer commitment

  • We make it easy to find the brands you expect to see
  • We strive to ensure a product cannot be found cheaper by going direct
  • We let you remain in control of your personal data
  • We are independent and impartial
  • We make it easy to switch and save
  • We strive to always show the most competitive product available

For further information, please contact: 

Nicki Parry
PR Officer
+44(0)1244-370318
nicki.parry@moneysupermarket.com

SOURCE moneysupermarket.com

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Romulus homeowners find ways to reverse floodplain designation - The Detroit News

Romulus— Residents call the neighborhood around Romulus' Oakbrook Street the Hale Creek/Carter Drain area and, despite the name, no one can remember it ever experiencing serious flooding.

So this year when the Federal Emergency Management Agency declared the area was in a floodplain, many locals were puzzled — and afraid for the financial ramifications.

When FEMA places a parcel in a flood zone, the owner is required to buy flood insurance. At costs ranging from several hundred to several thousand dollars a year, that requirement can be tough to meet. And even if a resident has lived in the same home for decades without ever seeing flooding, proving FEMA is wrong can be costly.

Most recently, the residents in Romulus felt the brunt of FEMA's work.

A new evaluation of the city — released in February — placed roughly 1,000 parcels in a flood zone. After several months and tens of thousands of dollars spent on appeals, roughly half of those properties have been taken out of the zone. But many community members were outraged at having to pay for something they believed was unnecessary.

"Romulus tends to be a headwater for the watershed here," said Tim Keys, the city's director of planning and community development. "Historically, we've never had flooding issues at all."

Prior to the release of the FEMA map, city officials had contracted for a $70,000 engineering a study to provide federal officials with updated information about what Romulus properties were truly at risk. Their hope had been to head off the incorrect designation of properties as being in the flood zone. After FEMA placed parcels in the flood zone, Romulus opted to enroll in FEMA's National Flood Insurance Program

Five years ago in Macomb County, a similar scenario occurred when FEMA introduced a new flood map, resulting in outrage and calls for changes to the flood insurance program. Now, the agency is assessing Wayne County, prompting calls for the program's outright elimination.

Following Hurricane Katrina in 2005, Congress gave FEMA the ability to borrow more money to cover its flood insurance commitments. The resulting debt incurred has only added fuel to those seeking the program's dissolution.

"This program was created in 1968, and we started writing policies in 1972," said U.S. Rep. Candice Miller, R-Harrison Township, in a speech on the floor of the House in May. "Today, this program is almost $18 billion in debt.And FEMA says that this debt will never be paid off.Never. So not only is the federal government improperly running a flood insurance program; it is operating a very bad flood insurance program."

Casting a wide insurance net

Since 2004, FEMA has been modernizing its national flood map, which details the properties at risk. But FEMA often bases its map revisions on outdated information from county and state governments, placing wide swaths of territory that are not prone to flooding in the "at-risk" category. And the onus — as well as the cost — is on property owners to prove the federal government is wrong.

Created more than 40 years ago, the flood insurance program was designed to save taxpayers money. By giving homeowners the chance to buy flood protection, federal officials hoped to cut down on the escalating costs of disaster relief.

Communities that agree to participate in the program make cheaper federal insurance available to their residents. In communities that remain out of the program, as Romulus was when it first received FEMA's maps, private insurance rates can be cheaper.

Critics say the flood insurance program casts a wide and inaccurate net trying to draw in as many homes as possible to pay for flood insurance. When FEMA's latest map revisions arrived in the offices of Dearborn City Hall in February, they indicated that an additional 1,392 properties were considered at risk from flooding. City officials fielded calls from confused and scared residents and helped guide them through the federal agency's appeal process.

As a result, all but 246 of those properties were determined out of the flood zone, said Mary Laundroche, the city's public information director.

"It's important to note that Flood Insurance Rate Maps are living documents," said Laurie Kuypers, a floodplain management and outreach specialist with FEMA, in a written response to questions. "The intent behind identifying and mapping flood risk is to show as accurately as possible the current risk. This is why FEMA and accepts new data and studies from communities, developers, the State of Michigan and other agencies for incorporation into our (maps)."

Real estate buyers beware

Bill Toner, a professional rehabber, had no worries about flood insurance last year when he purchased a vacant home on Oakbrook Street in Romulus. In the neighborhood just south of Detroit Metro Airport, plenty of homes are vacant after residents couldn't make their mortgage payments. Toner had planned to profit off the sale to a family that qualifies for a Michigan State Housing Development Authority loan, effectively giving them the chance to own a home they wouldn't normally have been able to afford. In February, however, the federal government placed his property in a flood zone. The added insurance costs threatened to derail the deal.

Ultimately, Toner's property was among many in the Oakbrook neighborhood that were removed from FEMA's floodplain. But the ordeal cost him three months in delays and taxes plus the $600 spent on hiring a surveyor to examine his property and submit an appeal to FEMA.

Those whose appeals are successful are supposed to be reimbursed by FEMA for any insurance costs incurred to date, but the months in limbo are unsettling for many.

Bill reauthorizes program

Complaints about the program caught the attention of U.S. Rep. John Dingell, D-Dearborn.

"I know that there have been concerns raised from many of the communities in my district about the FEMA flood plain maps," Dingell said in a written response to questions. "I am actively looking into this issue and my staff has been in contact directly with our mayors. It is clear that something must be done."

But Dingell's concern and Miller's efforts to eliminate the program may be for naught.

On June 29, Congress approved a reauthorization of the National Flood Insurance Program that was tucked in to the massive transportation bill. President Barack Obama is expected to sign it into law.

That bill would fund the flood program for five more years.

jlynch@detnews.com

(313) 222-2034

Sunday, July 22, 2012

INSIGHT-Flood risk rampant across Asia's factory zones - Reuters

Sun Jul 22, 2012 11:30pm IST

* Industrial parks still being built in Asia flood zones

* Extreme flood risk in China worries Swiss Re

* China flood insurance sold as part of property package, without claims limit

* Competition pushing down China property insurance rates - broker

By David Fogarty and Clare Baldwin

BANGKOK/HONG KONG July 23 (Reuters) - Global insurance companies are struggling to get a grip on their flood exposure in Asia nearly a year after one of the world's costliest disasters hit Thailand, with ex e cutives fearing an even worse event looms in the region.

Some firms learnt from the Thai floods, with new defences built to protect multi-billion dollar industrial estates in the country. Insurance premiums have also gone up, but factory construction in flood-prone areas remains rampant across Asia.

Insurance executives say the industry is vulnerable to another major flood, with scientists identifying the coastal plains of southern China as one area at greatest risk.

"When I go and look at these industrial parks and ports in some of the low-lying coastal areas, I just have to stand back and think: Who's insuring these things? Who's done the risk assessment?" said Adam Switzer, a coastal scientist at the Earth Observatory in Singapore.

"What I consistently see on the coasts throughout Asia is that we're still making the same sorts of mistakes."

The Thai floods hit nearly 1,000 factories feeding global supply chains - particularly in the auto sector - costing insurers an estimated $20 billion.

In the rush for development that has lifted millions out of poverty in Asia, many factories have been built along coasts, especially in river deltas. According to insurance industry executives, most construction was done without long-term historical data on floods and storms.

On top of that, rising sea levels, increasing rainfall and more intense s torms - together with more people and infrastructure - mean the risks have multiplied.

"We should be identifying these pockets of exposure earlier," said Scott Ryrie, Asia-Pacific vice chairman for Guy Carpenter, a global insurance industry services firm.

The goal, insurance executives say, is to break the cycle of paying for the same losses over and over again.

After the Thai floods, global reinsurer Swiss Re reassessed flood risk in emerging markets. The report's No. 1 risk was China, whose vast industrial estates are at the heart of global manufacturing, making everything from iPads to brake pads.

Among other Asian countries listed, Malaysia was 5, Indonesia 7 and India 10. Thailand was ninth.

Munich Re and Guy Carpenter have also reviewed flood risk models, particularly for industrial parks in Asia.

"A new risk awareness has to set in along the entire value chain," said Tobias Farny, Munich Re's Asia-Pacific chief executive. "The exposures present need to be defined, described and ring-fenced in order to become insurable."

Ryrie said insurers in many countries have contained risks by imposing tighter payout limits and pushing for better historical data to improve risk models.

WHERE NEXT?

At an industrial estate on the flat plains north of Bangkok, where Japan's Toshiba makes lighting and home appliances, workers rush to finish a 9.5-km (6-mile) concrete and earth dike that is 1.5 metres (5 ft) higher than the old one.

Behind them, a brown stain runs along the factory buildings where floodwaters lingered for two months, knocking out major foreign-owned manufacturing operations and triggering a flurry of business interruption claims around the world.

Many in the insurance sector agree that an even bigger loss is likely i n China, the motor of global manufacturing, where large areas of factory estates are vulnerable to flooding and storms.

Fierce competition among Chinese insurers, low premium prices and a lack of long-term disaster risk assessment mean insurance companies are potentially exposed to big losses.

"If we have a really extreme event in China, I am quite certain there would be some surprises for the insurance industry," said Jens Mehlhorn, head of Swiss Re's flood group. "The flooding we see currently in China is just average flooding. We haven't seen a 50- or 100-year flood event in the past 5 to 10 years."

The Pearl River Delta is one of China's biggest industrial zones. The western side of the delta, constructed on sediment-filled fish ponds and rice paddies, is flat for up to 100 km (60 miles) inland, and 40 percent is less than 2 metres (6.5 ft) above sea level.

The government has not published detailed maps showing China's most critical flood zones.

Meanwhile, competition in one of the world's biggest insurance markets has driven the cost of property cover 20 to 30 percent below what it is in other Asian markets, said Alex Yip, China chairman and general manager of insurance broker and corporate advisor JLT Lixin.

Price competition last year was so brutal that China's No. 2 insurer by market capitalisation, Ping An , recorded a nearly 200 million yuan ($31 million) loss on its corporate property and casualty underwriting, despite no major flood loss claims.

Ping An said in an email it cares more about the big picture than the profitability of individual policies. In 2011, Ping An's property and casualty division overall made a net profit of just under 5 billion yuan ($785 million).

Flood insurance in China is typically sold as part of a general property policy and does not have an upper claims limit, industry experts said. Rapid development and high levels of foreign investment mean the amount insurers are on the hook for in the next major flood has gone up.

"For floods and for earthquakes, to be honest, for international standards, the price is inadequate," said Zhang Qing, the Beijing-based general manager for State-owned PICC Property & Casualty Co's reinsurance business.

A recent study by Texas A&M University and Yale University shows the amount of developed land in low-elevation coastal areas in China is skyrocketing. In 2000, 13,500 sq km (5,200 sq miles) of low-elevation coastal land had been built up. By 2030, that is set to nearly quintuple to 63,600 sq km (24,500 sq m), an area nearly as large as the Netherlands and Belgium combined.

Another study, in the journal Irrigation and Drainage in 2010, said one third of China's farmland, two-thirds of its people, more than 60 percent of its cities and 80 percent of its GDP were threatened by floods.

Maryam Golnaraghi, chief of the World Meteorological Organization's disaster risk reduction division, said Chinese data is often not detailed enough to be useful - and that some government agencies feel information on water flows is too sensitive to share.

LESSONS LEARNED

Thailand is Asia's most developed auto parts market and a hub for the likes of Toyota, Honda and Mercedes-Benz, making cars and car parts the country's No. 1 export this year. The floods disrupted more than 100 components makers.

Over the past year, property insurance rates in Thailand have doubled or tripled and flood cover greatly reduced or even refused in some cases, said Jiraphant Asvantanakul, president of The General Insurance Association of Thailand.

Manufacturers such as Toshiba are moving machinery to the second storey, setting up sister operations in other countries and finding back-up warehouses and suppliers, though the bulk of operations remain in Thailand.

"I think the factories will stick with Thailand because the supply chain network is still very strong ... it is not that easy to move," said Kobkarn Watanavarangkul, executive chairwoman of Toshiba's Thai unit.

Toshiba's factories are in the Bangkadi industrial estate, one of seven parks built on former rice paddies on floodplains north of Bangkok that were inundated last year, affecting companies such as Sony, Canon and Honda.

Close to where workers were toiling to build new flood defences to protect the complex was a bronze statue of an elderly couple standing on sandbags.

They are the estate's founders and the statue commemorates a flood in 1995 in which 1 million sandbags were used to fend off high waters, a reminder that this is not the first time the estate has been threatened.

Insurers and reinsurers are also worried about dense concentrations of factories in other parts of Asia, particularly in and around the Indonesian capital Jakarta, where floods in 2005 and 2007 hit large areas.

The low-lying coastal city has 13 rivers flowing through it, is subsiding in parts and faces rising sea levels. It is the nation's manufacturing base with U.S., European and Japanese firms operating factories.

In Cikarang, east of Jakarta, five industrial estates with more than 3,000 plants employ over 1 million people.

Farny of Munich Re said natural catastrophe awareness was growing only slowly among insured firms and governments.

"But it is growing," he said. ($1 = 6.3735 Chinese yuan) (Additional reporting by Khettiya Jittapong and Orathai Sriring in BANGKOK, Tian Chen in HONG KONG, Andjarsari Paramaditha in JAKARTA, Chang-Ran Kim, Yoko Kubota and Taiga Uranaka in TOKYO, Kevin Lim in SINGAPORE and Norihiko Shirouzu in BEIJING; Editing by Michael Flaherty and Alex Richardson)