Friday, October 26, 2012

Hurricane Sandy: What Homeowners Need to Know - Smartmoney.com

It's hard to say which causes homeowners more anxiety: the radar images tracking Hurricane Sandy's path up the eastern seaboard or the pages of confusing legalese that makes up their home insurance policies.

The biggest financial pitfall homeowners hit by a hurricane face, experts say, is how insurers define wind damage and flood damage. The insurance industry classifies wind damage as a direct result of a hurricane or tropical storm, but flood damage is more complicated, according to a spokesman for the National Association of Insurance Commissioners. "This was a concern after Hurricane Irene," he says. "The big question is whether it's flood or non-flood." Navigating that distinction has caused tremendous delays in processing insurance claims from previous storms, he says.

Of course, some of the confusion over claims comes from people not understanding their coverage in the first place. That goes for renters as well as owners. For instance, the building owner -- or the owner's insurance company -- is responsible for paying for damage to an apartment building or condo, but tenants that don't have renters insurance are not covered if there is damage to their belongings. Experts advise that consumers contact their company before the storm hits for emergency numbers, and photograph and document all their valuables now.

But there is a possible upside for homeowners in the path of the storm. If Hurricane Sandy is downgraded to a tropical storm before it makes landfall -- as happened with Hurricane Irene last year -- policyholders with wind damage should not have to pay out a pricey hurricane deductible. This could be a big savings for those who live in coastal areas, most of whom are required to pay a mandatory hurricane deductible, experts say. Some insurers have raised those deductibles from 1% or 2% to as high as 5% -- dramatically adding to out-of-pocket costs for policyholders.

What's more, insurance companies have learned lessons from the far more devastating Hurricane Katrina in 2005, experts say, when many policies took months to process. Insurance companies in the northeast will be deploying "catastrophe teams" -- thousands of extra customer-service reps and claims adjusters -- to deal with the spike in expected claims from householders in the path of storm, says Roseanne Placey, a spokeswoman for the Pennsylvania Insurance Department, the agency that regulates the insurance industry in that state.

Remember, remember to check home insurance before bonfire night - MyFinances.co.uk

Bonfire night is fast approaching and with it the biggest home insurance risk of the year.

Bonfire night results in the highest number of home insurance claims of any night of the year and the risk extends to cars and personal injury as well as buildings and contents home insurance.

If you are hosting a bonfire party then you need to be aware of the personal liability insurance risks and rules as well.

In this guide we will outline how you can reduce the risks to your property and your person and the people you are with as you celebrate Bonfire Night.

I can say that I am a fairly good guide to this subject as I live near Lewes, East Sussex, which has the biggest and oldest set of Bonfire Night celebrations in the UK and having attended at least 20 times in the past 30 years and seen and heard all sorts of stories as to the potential dangers of Bonfire Night, I can tell you that the risk certainly exists.

Insurance risk

There are always a small percentage of homes that get damaged by fireworks and research shows that the risk of burglary to the home or vehicle increases by around 25 per cent on November 5th.

November traditionally has the second highest number of claims for fire damage, only beaten by December when the UK collectively attempts to wire up Christmas lights.

Parties and celebrations

If you are planning to host a fireworks party at home, you need to consider the risk of injury or damage to your guests and make sure you are covered. Over 6,000 people are injured and treated for firework accidents each year, with half of these injuries happening to children under the age of 16.

You need to check that your home insurance policy is up to date and that you have adequate personal liability cover for yourself, your home and the people who attend the event. If someone was injured, you could be liable for any injury or damage if you are not covered by insurance.

Read the small print

Before you organize the firework party, it is vital you read the small print of your home insurance cover and make sure you have sufficient personal liability protection.

Most buildings and contents insurance policies will provide sufficient cover if your property or possessions are damaged by a bonfire or firework.

However, make sure your home insurance policy also covers garden equipment, furniture and other valuables. Sheds, fences and greenhouses are usually covered by buildings policies but other contents in your garden may not be covered.

Protecting your home

The risk of burglary increases on November 5th. If you are going out for the evening, close the curtains but leave a few lights on so that it looks as if someone is at home.

Make sure all doors, windows and outbuildings have been locked. If your home is fitted with a burglar alarm, make sure you switch it on before you go out. Test your smoke alarm to ensure it is working.

Protecting your family

If you are hosting a fireworks party, nominate a responsible, non-drinking parent, preferably yourself if it is on your property, to be in charge of lighting the fireworks. Keep fireworks sealed in a container and away from children.

There are no laws against having a bonfire on your property but it makes sense to keep it away from sheds, hedges and other things that may catch fire.

Let your neighbours know in advance, or better still, invite them. They are much less likely to complain.

Last year a Mr Metcalf had a bonfire in his garden last year. Despite taking all the necessary precautions and building the fire 30 metres away from his house an ember from the fire was blown into his dog kennel. Unfortunately the kennel was attached to an out building in which a number of goods that he collected for charity events were kept.

Mr Metcalf noticed immediately and was able to extinguish the flames with a fire extinguisher but a significant amount of damage had already been done to the outbuilding and to the contents in it. Fortunately no one was harmed in this fire but it was a shock to Mr Metcalf how quickly the fire took hold and how much worse the damage could have been if he hadn't been able to control it.

Selwyn Fernandes, Managing Director of LV= home insurance, said: "Whether you are having a bonfire to get rid of garden waste of just for fun it's important to think about the dangers involved when lighting a bonfire. Fire spreads quickly and so positioning your bonfire away from any buildings or trees is essential."

If you are out at a fireworks display or bonfire keep an eye on the people you are with, especially children. At some bigger processions the streets can become very crowded and it is easy to lose someone. Watch out for stray lit torches and fireworks that are left on the street. If you are watching a bonfire, don't get too close.

Protecting your garden and car

Put valuable garden ornaments or plant pots inside a locked shed or other outbuilding. If you have a gate to your garden, make sure you lock it before you go out. If possible put your car away in a locked garage or on the drive. If that is not possible consider parking away from the main street. Always lock your car and set the alarm if you have one.

Safety tips for handling fireworks

Always read the instructions carefully and never return to a firework after it has been lit. There are a lot of inferior products around. To make sure you get fireworks that conform to safety standards only buy fireworks marked with the British Standard Kitemark BS 7114. This also means that the fireworks are likely to be of a better standard than the fake ones that are available.

Never use petrol to help get your bonfire going and make sure you build the bonfire in a space away from any buildings, fences or hedges. You should also try and make sure that no fireworks are thrown onto the bonfire.

Bonfire night and pets

Make sure your pet is worn out by exercising it on the day. This will help it get to sleep easier.

Close the curtains and try and create a natural den, a place that an animal would make for if it was scared.

Dr Scott Miller from Tesco Pet Insurance said: "We have noticed a clear spike in owners seeking advice before bonfire night, as well as in the incidence of stress-related injuries in the days after.  Noise phobia in animals can worsen from year to year so it is especially important that pet owners do all they can to help support their animals through the bonfire night period."

Andy Woodward, Sheriff's Deputy, Loses Homeowners Insurance Because He ... - Huffington Post

Dogs may be a man's best friend - but not necessarily when that man is a sheriff's deputy in Nebraska.

Last week, American Family Insurance informed Douglas County Sheriff's Deputy Andy Woodward that his homeowners insurance would be terminated because he takes care of a police dog.

The county initially argued American Family was barking up the wrong tree -- all its police dogs are insured by a separate policy, and according to the Omaha World-Herald, Woodward has to live with the police dog as part of his job.

Despite these arguments, Woodward received a letter shortly after an insurance company worker visited the deputy's home. It read, "Due to the additional liability exposure of your police dog, we are unable to continue your homeowner coverage."

American Family says that its decision rests on its belief that the pooch, Diezel, counts as an attack dog. Diezel is a Belgian Malinois and doesn't qualify as one of the company's "prohibited breeds" (pit bulls, Rottweilers, etc.), but the company believes his high degree of defense training increases the likelihood he could bite someone.

"We regret this situation occurred," added American Family spokesman Steve Witmer in an emailed statement to The Huffington Post. "American Family Insurance supports law enforcement and pet owners. Mr. Woodward was a long-time customer of American Family Insurance, and we wanted to continue that relationship."

"With the appropriate information regarding Douglas County's liability insurance coverage, we would have and will renew coverage. We care about Mr. Woodward and all law enforcement officers and are working to resolve this matter going forward."

American Family estimates around 2 percent of the U.S. population suffers a dog bite every year, or about 4.7 million people.

"It's a big issue. Dog bites, or dog attacks, are the largest single cause of homeowners' claims since the 1990s," explained an American Family spokesman to Consumerist.

PHOTO of Woodward and Diezel:
andy woodward police dog insurance

Also on HuffPost:

Thursday, October 25, 2012

Home insurance company drops officer because of - Police News

By Margery A. Beck
Associated Press

OMAHA, Neb.  — A Nebraska sheriff's deputy is being dropped by his home insurance company, who says the police dog he keeps at his Omaha home is a risk it is not willing to bear. And the head of the nation's largest police union warns American Family Insurance Co. to prepare to be shunned by its 325,000 members.

Douglas County Deputy Andy Woodward, 36, said he learned this summer after the insurance company conducted its annual inspection of his home that American Family was considering ending his homeowner's policy because he cares for his K-9, Diezel — considered an aggressive dog by the insurance company, because it's trained to attack on command.

Woodward said he informed his agent that the county carries liability insurance for the dog and thought the matter was settled. But American Family sent him a letter this month, informing him his policy would end on Dec. 19 "due to the additional liability exposure of your police dog," the document reads.

"It was just like a slap in the face," said Woodward, who is required by the sheriff's office to keep the 4-year-old Belgian Malinois at his home. "I'm going to get dropped from my home insurance for this?"

Steve Witmer, a spokesman for American Family, called the cancellation "an unfortunate misunderstanding," saying the company expected the deputy to provide confirmation that Douglas County held liability insurance on the dog.

Woodward is the fourth law enforcement officer in 33 years to have his homeowner's policy canceled because of the presence of a police dog, Witmer said. In all the cases, except for Woodward's, American Family continued coverage because proof of liability coverage on the K-9s was shown, he said.

Dropped coverage for dog ownership is rare, said Bruce Ramge, director of Nebraska Department of Insurance, only three complaints filed in Nebraska over the last 10 years.

"This is the first time I've heard of this occurring with a law enforcement officer," said Ramge, who noted American Family was "within their legal rights."

Witmer said American Family's underwriting guidelines list certain types of dogs as being ineligible for homeowners' insurance, including certain breeds deemed to be aggressive, such as Akitas, American pit bull terriers, chows, Rottweilers and any kind of wolf hybrid.

"We also will not sell a new policy to customers who own a trained guard dog or attack dog," said Witmer, noting that a police dog would fall under that definition. He also said American Family has no plans to drop coverage on every law enforcement officer who cares for a police dog.

The director of the National Fraternal Order of Police isn't swayed.

"We don't view it that way. They don't call us a union for nothing," Jim Pasco said. "The idea that they can cherry-pick among our members and decide who's worthy of their insurance based on whether they like the dog or not is at variance with common sense."

Pasco said this is the first time in his 46 years of law enforcement and union work he has heard of a K-9 officer losing his coverage because of keeping a police dog at home.

"You would think that insurers would want police officers with all of the equipment that they're provided with to protect individuals — whether its dogs or firearms or whatever — in the neighborhood," Pasco said.

Witmer, however, says dog bites account for the largest percentage of homeowners' liability claims, so American Family determined years ago that it would not write policies for owners of what the company considered to be dogs likely to bite.

"We look at it as not expecting other customers to subsidize people who chose to own aggressive dogs," Witmer said.

But Woodward said his drug-sniffing and patrol dog will attack only at his command and undergoes eight hours of training a week to keep him familiar with his commands and ensure that he's obedient.

"He knows that what I say goes, and he doesn't act on his own," Woodward said.

Asked if American Family would have retained Woodward's coverage if he had shown proof of liability coverage after receiving the Oct. 15 cancellation notice, Witmer said Wednesday that he wasn't sure.

"I don't know if at that point that it would have been possible," he said. Several hours later, Witmer released a statement saying that with documentation of Diezel's liability insurance, "we would have and will renew coverage."

"We care about Mr. Woodward and all law enforcement officers and are working to resolve this matter going forward," the statement said.

Woodward, however, won't be going back to American Family. He said he already has new coverage from a different company. And other law enforcement officers could soon follow suit, Pasco said.

Associated PressCopyright 2012 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

"It's a quid pro quo world," he said. "I have two (Labrador retrievers), and the only thing I wish is that I had American Family Insurance so I could drop them."

Copyright 2012 Associated Press

Jump in title insurance cost pinches homeowners looking to sell, refinance - 77Square.com (blog)

Title insurance underwriters doing business in Wisconsin have just made it a lot more expensive to refinance or sell a home.

"I've heard complaints from people all over the place, in all corners of the state," says Tom Larson, chief lobbyist for the Wisconsin Realtors Association.

On Aug. 24, Fidelity National Title Insurance Co. and Chicago Title Insurance Co., which Fidelity owns, filed rate increases effective Oct. 1 with the state Office of the Commissioner of Insurance that significantly raise the cost of title insurance. Their rate structure now starts at $375 on the first $15,000 of property value and adds per-thousand increment charges at different thresholds after that.

On Sept. 12, three more underwriters — Old Republic National Title Insurance Co., Westcor Land Title Insurance Co. and Commonwealth Land Title Insurance Co. — followed suit with their own increases, also effective Oct. 1. Those hikes were of different sizes, but the final rate structure in each case is the same as those for Fidelity National and Chicago.

That is also true for Stewart Title Guaranty Co., which filed its rate increase on Sept. 26 with an effective date of Nov. 1.

Together, those companies underwrite the vast majority of title insurance policies in Wisconsin.

The underwriters have also done away with what's known as "downward deviations," colloquially known as discounts. While Wisconsin requires underwriters to use the rates they file with the insurance commissioner, the state allows them to deviate downward from those rates. Until Oct. 1, discounts were offered to practically everyone who sold or refinanced a home, but the amounts varied widely. The move to eliminate discounts is in response to tightened regulations by the insurance commissioner, the companies say.

A prominent local title company president also says the rate changes are desperately needed because the industry has been suffering in recent years because of low prices resulting from Wisconsin's highly competitive title insurance industry and the lean years spawned by the real estate meltdown. Underwriters deny that there has been any collusion among them.

Consumers will definitely notice a price increase.

One local mortgage lender, who requested anonymity, says a comparison of the costs of a refinance before and after the rate changes revealed that the new rates for Commonwealth pushed the price for title insurance on a $245,000 home sale from $700 to $920, a 31-percent hike.

An area title agent, who agreed on the condition of anonymity to run the numbers, came up with similar results. The agent, using an example from an unnamed underwriter, found that the cost of title insurance on a $200,000 home sale went from $675 before the rate changes to $830 under the new rates, a 23-percent increase. For a $500,000 home sale, the cost went from $975 to $1,430, a 47-percent hike.

Larson says the changes have infuriated real estate clients, some of whom are already upset over the declining value of their homes.

"They're saying, 'I've got to pay an extra few hundred bucks because you gave me the wrong information,'" he says. "And the Realtors say, 'That's the information I was given in September when we started looking into this, and now it's changed.'"

The timing of the rate changes is raising some eyebrows.

"It seems kind of fishy," says Larson. "If the real estate industry sent something out to everybody saying all of our rates are going to be 10 percent (a 6 percent commission is common) starting Oct. 1, somebody would be filing an antitrust lawsuit."

Peter Carstensen, an expert on antitrust issues at the University of Wisconsin Law School, agrees that the nearly industry-wide rate change "looks a little suspicious."

But he adds that past state and federal court rulings make it hard to go after insurance providers with antitrust litigation.

"The message here is, 'Hey, we figured out that nobody could hold us liable,'" he says.

He adds: "This is the kind of thing, anywhere else in the world, if you saw it you would immediately as a government prosecutor convene a grand jury and you'd start looking for a criminal indictment."

Carstensen says despite court rulings that provide shelter for insurers who are required to file rates, as they are in Wisconsin, it may be possible to get an injunction against the rate increases or to win some other remedy under state law.

"The real question here is who can get into court successfully, and then what kind of remedy are they going to be entitled to," he says.

While the state Attorney General's Office won't comment on cases that are under investigation, a Department of Justice spokeswoman says the office is aware of the situation.

"We've heard about this, but we're not going to comment beyond that at this point," says spokeswoman Dana Brueck. "We are always concerned about things that may raise prices for consumers."

But John Arcidiancono, senior vice president of marketing at Stewart Title, denies that any collusion took place among the various underwriters, and that same message is echoed by others in the industry.

"We don't talk to our competitors," Arcidiancono says. "We filed our own rates."

Carstensen says Ted Nickel, the state insurance commissioner, could exercise his influence on behalf of consumers.

"He doesn't have much authority to change the rates, unfortunately," Carstensen says, "but he can make life pretty difficult going forward for these firms."

The prospects of that happening are uncertain.

J.R. Weiske, a spokesman for the insurance commissioner's office, says his office hasn't reviewed the new rate filings in detail, but he also says the office is in the business of promoting competition.

"I think there could be a concern," he says. "I don't know that there is, but I think there could be."

Weiske called the underwriters' decisions to eliminate discounts "an overreaction" that they will likely rethink when they feel the pressure of market forces.

"We don't expect that this is going to happen for the long haul," he says, "and they may be, to a certain extent right now, cutting their nose off to spite their face."

The underwriters have said they decided to do away with discounts after an April 30 bulletin from the commissioner reiterating that downward deviations have to be properly documented. The bulletin was in response to reports that title companies were providing discounts randomly, compromising predictability in the marketplace. The commissioner's office made it clear to the underwriters that discounts had to adhere to criteria contained in an established rate program, be based on the cost of title work or reduced risk factors, and can't be made for purely competitive reasons.

Weiske says the commissioner's bulletin was aimed at stopping a practice that had gotten out of hand.

"You just don't know whether consumers are being treated fairly," he says, "whether or not similarly situated consumers" are getting the same deal from the same company, rather than getting a better deal "depending on who they know or what they look like, or whatever."

In response, the companies simply did away with the discounts.

"Eliminating discounts is the key thing because the discounts are the things that were creating the competition," says Carstensen.

But Tom Rostad, owner and president of Dane County Title Co., says that in recent years, title companies have been at pains to make a profit in the state.

"They said they were having a hard time surviving in Wisconsin," says Rostad. "It was out of line with the surrounding states in terms of what was being charged, and there were so many deviations that they decided, 'We're filing new rates.'"

Rostad is not speaking on behalf of underwriters. His company, like other title service businesses, acts as an agent for underwriters and has to charge the rates they set.

Rostad points out that under the previous rate structure, residential customers were subsidizing large commercial clients, who paid lower rates. The new rate structure raises rates on commercial transactions.

"It's a level playing field across the board," he says.

The rates had not seen an increase for eight years, Rostad says, even as the rate of inflation rose. Low rates and discounts for both residential and commercial clients, resulting from intense competition, had put the Wisconsin title insurance market in a tailspin, he says.

"In my opinion, we were an industry with a death wish."

Rostad says the fact that the companies all went to the same rates at the same time is likely the result of one company filing rates, then the others following suit.

"I don't think they had any secret meeting behind closed doors and said, 'Hey, let's do this,'" he says. "It's an industry where word gets around."

But for homeowners, the decision to make selling and refinancing more expensive still stings.

"Imagine when you're selling your house and you're already taking a bath on it," says the Realtors Association's Larson. "You bring a check to the closing. Now they're saying they're nicking you for another few hundred bucks. Yeah, you're pissed."

North Carolina Regulator Calls for Hearing, Delay on Home Insurance Rates - Insurance Journal

Two weeks ahead of an election deciding whether he keeps his job, North Carolina's insurance commissioner told companies they'll have to prove they should be allowed to increase homeowner's premiums by a statewide average of 17.7 percent.

The move by Insurance Commissioner Wayne Goodwin at least postpones the rate increase that insurers had wanted to take effect on June 1.

Goodwin scheduled a hearing June 3 where the companies and staffers at the state agency will present arguments for and against the increase. The commissioner — either Goodwin or Republican challenger Mike Causey — would then decide whether any increase is warranted, and if so how large it should be. Insurers could appeal in court a decision they didn't like.

The insurance companies are represented by the North Carolina Rate Bureau. The group's director and attorneys didn't respond to requests for comment Tuesday.

The last homeowner's insurance rate increase was in 2008, before Goodwin took office. Insurance companies sought an average of 19.5 percent statewide and got 4 percent.

The agency headed by the Democrat seeking re-election to a second four-year term said the proposed rates appear "excessive and unfairly discriminatory." The state insurance commissioner's duty is to balance the cost of consumer and business insurance rates with the need to foster a competitive insurance market in North Carolina.

"After an initial review of the filing and comments submitted by the public, department experts believe the requested rate increases are not justified based on the data submitted," Goodwin's office said in a statement.

Goodwin's department said insurers may be trying to support their argument for a homeowner's rate increase by using old data, unjustified risk factors, and a profit calculation method previously denied by the state Supreme Court.

A model estimating hurricane damage and losses companies could face "does not appear to be adequately documented or justified," Goodwin's office said.

Causey has gotten a boost in coastal counties because the property insurance increases approved in 2008 went into effect during Goodwin's term, causing premiums to soar by up to nearly 30 percent along the coast.

Copyright 2012 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Hundreds of Hurricane Isaac victims show up for legislative Insurance ... - NOLA.com

"Without elevation (rebuilding is) like buying a new pair of shoes and then you go stand in the river. It doesn't make sense to me." -- resident

More than 200 St. John the Baptist Parish residents affected by Hurricane Isaac attended a state legislative Insurance Committee meeting in LaPlace on Wednesday to get answers about insurance concerns. Isaac, which came ashore Aug. 29, caused widespread flooding in St. John and required the emergency evacuation of about  4,000 residents who were stranded in homes surrounded by rapidly rising water. Parish officials estimate more than 7,000 houses were damaged during the storm.

Members of the Senate and House Insurance Committee held a joint meeting at the St. John the Baptist Parish Community Center to discuss insurance issues related to Isaac and to hear residents' problems and questions.

"Our goal is to try and answer questions and let citizens know that we are there to assist them in their recovery efforts," said Sen. Gary Smith-D Norco, vice chairman of the Senate Insurance Committee.

It was a meeting punctuated by applause from those in the audience as fellow residents shared with the panel of legislators their trials in the post-Isaac landscape. Residents' groans expressed their disagreement or disgust with answers from federal government agencies, such as FEMA representatives.

"I feel very, very frustrated right now," said one woman, who said she has lived in the Cambridge subdivision for more than 30 years and is wondering why there are no grants for home elevations. "Without elevation (rebuilding is) like buying a new pair of shoes and then you go stand in the river. It doesn't make sense to me."

Sen. Troy Brown-D, Assumption said the federal government determines flood zones, which is a primary step in deciding whether an area should be considered for an elevation program. However, Brown said he and other elected officials were pushing to fast-track the construction of a hurricane protection levee for St. John so that elevation wouldn't be needed.

Many residents said they don't understand how insurance companies determined "substantial damage" and the seemingly capricious nature of adjusters in issuing advance checks for property damage to some people while in other cases, withholding money until homeowners provide contract estimates.

Debra Schum said she questioned the logical nature of the National Flood Insurance Program and the FEMA Disaster Assistance Program, two programs meant to help residents in recovery efforts.

Schum said she received an advance from the flood program to start repairs on her house, but the check was made out to her and her mortgage company. The mortgage company wouldn't release the money without having an adjuster's estimate, which wouldn't come for another 30 days, she said.

"Why couldn't the check be made out directly to me?" Schum asked. When FEMA gives disaster assistance the money goes directly to the individual, she said.

Smith, who represents the area and helped schedule the joint session, said the meeting grew out of the many calls and conversations he and other elected officials have had with residents about the insurance process.

Residents were asked to submit their questions and include contact information on cards that were collected by legislative staff members. Smith and other panel members promised the audience that their concerns would be addressed. "If we can't get the issues answered tonight, we will follow up," Smith said.

Wednesday, October 24, 2012

California Commissioner Considering 'Force-placed' Regulations - Insurance Journal

A meeting slated for Thursday called for by California Insurance Commissioner Dave Jones to deal with "force-placed" insurance has cast the dye for debate on whether such insurance should be filed in the category of specialty lines or commodity.

Other than fleeting references expressing an interest in drafting regulations to govern force-placed, also called "lender-placed," insurance, Jones has said little else publicly. On Monday Jones referenced his desire to create new the regulations when he announced a 30.5 percent rate reduction for lender-placed homeowners' insurance coverage offered by American Security Insurance Co., an Assurant Inc.-owned company.

"The Department is also contemplating regulations that would require all insurers that write lender placed property insurance to file the rates as a commodity rather than as a specialty line," Jones said in the statement announcing the American Security Insurance rate reduction that resulted from a CDI investigation launched in March, which yielded an estimated $42.7 million savings to homeowners.

Filing as a commodity restricts an insurer's ability to deviate from the standard prior approval template. Traditional homeowners' insurance and personal automobile insurance are already required to file as commodity coverages. Jones' proposed regulation would eliminate the exemption for the high premium master policies that provide lender placed property coverage.

There are those who question such regulations, and wonder how they will impact insurers and mortgage lenders.

"This came out of left field," said Armand Feliciano, vice president of the Association of California Insurance Companies and Property Casualty Insurers Association of America.

Feliciano said he will request clarification and state his concerns about such regulations to the commissioner during Thursday's meeting.

When a bank lends an individual money to buy a home or a car it requires homeowners or automobile insurance, and if the individual fails to maintain that insurance, lenders then place insurance on the home or car to protect their security interest. The practice is referred to by many as "force-placed," or "lender-placed," insurance.

However, it's Feliciano's contention that such insurance isn't really "forced-placed." He also maintains that these requirements are necessary for banks to protect their assets, and that it's the banks – not the insurers – that those concerned about the practice should be looking at.

"When you say 'forced,' did they not sign a contract?" Feliciano said. "If you're going to lend someone $500,000, you're going to want some assurances. Obviously (Jones) can't regulate the banks. But he should talk to the banks. The banks tell us what to cover."

Requiring lender-placed insurance to be filed as a commodity would force insurers to treat the large numbers of homes they typically deal with en masse in lender-placed insurance situations instead like a personal homeowners policy, requiring insurers to look at the risks of each individual home instead of offering coverage rates for dozens or hundreds of assets together, Feliciano said.

"What's the rationale?" he added.

In March, Jones contacted the state's 10 largest lender-placed coverage insurers over concerns about excessive rates, and he directed them to submit new rate filings. CDI examined the insurers' annual financial statement data, and found many cases of low loss ratios, which were a flag to CDI officials that rates charged by insurers may be excessive, according to a statement from Jones' office.

The American Security rate reduction is a result of that examination, and it's the first insurer to lower rates based on the examination.

CDI spokesman Dave Althausen said that other than the press releases in March and on Monday the commissioner has made no other public references to creating the new regulations, which according to the spokesman have yet to be written.

Althausen said no other comments on the regulations would be offered until Thursday's workshop, which is scheduled for 10:30 a.m. at CDI's office on the 22nd floor of 45 Fremont St. in San Francisco.

A letter sent out announcing Thursday's meeting states the department is considering amending California Code of Regulations Title 10, Section 2642.7 – the section allows for certain lines to be disaggregated for ratemaking purposes into subcategories for commodity and specialty insurance – to the following:

Raise the $75,000 premium threshold to qualify as "specialty insurance" to $1 million; raise the $100,000 deductible threshold to $500,000; clarify that group policies and master policies are not considered "single" policies for the purpose of qualifying as specialty insurance; clarify that excess and/or umbrella policies written over personal lines do not qualify as specialty insurance; clarify that an underlying policy must cover a commercial exposure before the excess/umbrella  policy  can be  considered  specialty  insurance; raise the $500,000 underlying  limit threshold  to  $1 million  for excess/umbrella policies to qualify as-specialty insurance; clarify that while certain lines, sublines and risks qualify as specialty insurance they may also be filed as commodity insurance; and expressly provide that lender placed insurance does not qualify as specialty insurance.

Force-placed insurance has garnered more attention in the past year following a long period of increasing foreclosures and news stories that have called attention to financial relationships between lenders and lender-placed insurers. And the financial sector continues to be hammered by bad headlines. On Wednesday the Justice Department said it's seeking $1 billion from Bank of America for alleged fraud for selling defective mortgages.

In launching the investigation Jones said several homeowners have complained that they pay more for forced-placed insurance than they would if they obtained the insurance themselves.

"Homeowners have complained that they are forced to pay for homeowners' insurance purchased for them by their mortgage lender at a price higher than insurance they could obtain themselves-yet another facet of lender practices associated with the mortgage crisis," Jones said in his March statement at the start of the CDI investigation. "Recent investigative reports detail the lack of arm's length transactions between lenders and insurers and, in some cases, a financial relationship between lender and insurer, which means the insurer is able to charge a higher price than would otherwise be the case."

Among Feliciano's concerns about the proposed new regulations is that changing the filings from a specialty template, in which insurers can file rates backed by actuarial evidence, filing under a commodity template could establish rates that are too low.

There already exists under Proposition 103's prior approval language the ability for CDI to compel insurers to lower rates that they think are too high, he added.

"The argument from our perspective is if you're concerned about the rates being high, they can compel these guys to come back if these rates are high," Feliciano said.

Insurer cancels deputy's homeowner policy; police dog at home deemed too risky - Kearney Hub

A national insurance company is canceling a local K-9 officer's homeowners insurance — because he keeps a police dog in his home.

In what appears to be a local first and a national rarity, American Family Insurance told Douglas County Sheriff's Deputy Andy Woodward last week that his insurance would be terminated in December. The company apparently was not swayed by arguments that the county insures the dog and that Woodward is required to live with it.

The issue arose after an insurance company worker, while conducting an on-site review of the deputy's home, spotted Woodward's marked K-9 cruiser in the driveway. American Family subsequently learned that Diezel, the deputy's Belgian Malinois canine partner, lives at the house.

American Family notified Woodward by letter Oct. 15 that his homeowners insurance coverage would be terminated.

"Due to the additional liability exposure of your police dog, we are unable to continue your homeowner coverage," the letter said.

Diezel is insured by Douglas County. Woodward, like his fellow K-9 officers, is required to keep his dog at home.

The company gave Woodward time to procure insurance from another company, which he has done. But that doesn't make it all right with him, and the matter raised concern among law enforcement union leaders in Douglas County and Omaha.

"This is infuriating that I'm getting dropped because of my profession," said Woodward, 36, who has been a deputy for eight years. He said the company's decision amounted to bias against his profession.

"He's my dog," Woodward said. "He has to go home with me."

The dog is well-trained — including daily training with Woodward at home and a full day of training with the deputy each week, Woodward said. The two have state and national certifications. Diezel is restrained in a large kennel with high fences and a concrete pad, Woodward said.

Jim Maguire, president of the deputies' union, the Fraternal Order of Police Lodge No. 2, said he had never heard of an insurance company dropping a K-9 officer because of his dog. Maguire plans to inform union members about the matter.

He and Sgt. John Wells, president of the Omaha police union, expressed concern that it might set a precedent.

"This just doesn't seem right, for a company this size, to do this over a police dog," Maguire said.

Added Wells, "Today, it's a K-9 guy. Tomorrow, is it a SWAT guy because he has a high-powered rifle? ... It's a very unfair decision that seems solely based on his occupation."

An American Family spokesman, Steve Witmer, said the company has nothing against law enforcement officers. The decision was based on the dog, not its owner's occupation, Witmer said.

"It's a big issue. Dog bites, or dog attacks, are the largest single cause of homeowners' claims since the 1990s," he said.

American Family has underwriting guidelines that restrict certain breeds of dogs, as well as trained guard or attack dogs, Witmer said. Woodward's dog doesn't fit the former category. The company's prohibited breeds are Akitas, American pit bull terriers, Chows, Rott-weilers and wolf mixes, Witmer said.

But, to American Family, the deputy's dog fit the latter.

Witmer said someone from American Family asked Woodward, "What would happen if somebody wandered into your yard?" and Woodward replied that the dog would attack.

Woodward said no such conversation occurred.

Witmer confirmed that Woodward told the company that Douglas County covers the dog. He said there was discussion of the county certifying in writing that it has liability coverage of the dog. Witmer said he isn't sure what happened in that regard.

Normally, such certification would resolve any problem with a K-9 officer's homeowners insurance, said Terry Fleck, a nationally known canine legal expert based in Nevada.

He called the insurance company's action ludicrous.

"In 30 years of doing this, I've heard of this happening once, in Florida, and it got resolved immediately," Fleck said. "It's the owner of the dog who's always held liable for the actions of the dog."

The owner is the Douglas County Sheriff's Office.

The Belgian Malinois, a type of shepherd dog that is increasingly popular as a military and police dog, can be dangerous to bad actors when on duty. It has been widely reported that Cairo, the canine member of Navy SEAL Team Six on its mission to kill Osama bin Laden, was a Belgian Malinois. Diezel is a dual-purpose dog, working on patrol and narcotics detection. There have been no problems with him.

Mark Langan, director of field operations for the Nebraska Humane Society and a former longtime narcotics officer, said he had never heard of an attack locally by a Belgian Malinois or of an unprovoked attack by a police dog on a person.

For his part, Woodward said the insurance company asked if the county would sign a letter verifying that it provides liability insurance for Diezel, and he said the county would.

"I was told that they were going to send a letter and have the county sign it," Woodward said.

Instead, he said, another letter arrived — a cancellation notice.

Tuesday, October 23, 2012

Home insurance premiums are going up - The Independent (blog)

1893cbcedfa6978bed8a9ac78c0d42c68c54de84 300x225 Home insurance premiums are going upAccording to the new figures from AA Insurance, the cost of buildings cover rose 2.4% to £181 over the three months to the end of September (and 5.2% over 12 months), while contents cover rose 1% to £242 (7.2% over 12 months).

Simon Douglas, director of AA Insurance, said that the wet summer is a sharp reminder that the industry must be prepared for more of the same over coming years. Indeed, The Environment Agency and the Climate Vulnerability Monitor predict flooding will get considerably worse over the next decade, with the cost of flood damage in Britain likely to triple by 2030.

"I am very concerned that no agreement has yet been reached in finding an affordable option to the 'statement of principles' between the insurance industry and the Government, which ensures that families in flood-prone properties can continue to obtain flood cover," said Douglas. "This expires in June next year and if no agreement is reached soon, could lead to the most vulnerable homes becoming uninsurable.

"To put this into context, insurers measure flood risk in terms of events likely to happen over a period of years. Even if a home is at risk of flooding once in a century, given that the average cost of repairing a flood-damaged property is £20,000 that is the equivalent of £200 per year, on top of the cost of covering other risks. It's vital that the Government and local authorities make tackling the problem at source by investing in flood defences a priority."

He added that £38 million was spent on flood defences in Carlisle following floods there in 2005 and that last month the new defences kept around 1,500 homes in the city dry.

In terms of buildings insurance, every region of the UK has seen premiums rise, according to the same report.  The most expensive region in which to insure a home is London and the South East, with the biggest regional premium increases in Yorkshire and East Anglia. Wales and the West Country continue to be the cheapest regions to insure a home. The highest premium for contents cover is in the Central and North West England.

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Tagged in: contents insurance, home insurance

Home Insurance Premiums Come Tumbling Down - Sacramento Bee

/PRNewswire/ --

  • Across the UK, home insurance premiums decreased by 5.4 per cent
  • Galashiels, Scottish Borders, sees steepest drop
  • But London bucks the trend with a rise in the cost of home insurance

The cost of home insurance has fallen by 5.4 per cent in the past year, with the average premium now standing at £146, according to analysis of over 3.3 million quotes by MoneySupermarket.

The sixth edition of the MoneySupermarket  Monitor on home insurance* reveals over the 12 months to August 31, 2012: combined buildings and contents insurance saw an average fall of 8.4 per cent, standalone contents insurance premiums decreased by 14.8 per cent and standalone buildings cover by 2.6 per cent. The research also showed residents of the Scottish border town of Galashiels benefited the most from falls in home insurance prices, seeing an 11.5 per cent drop, closely followed by Sunderland, Kirkcaldy, Worcester and Blackpool - all with an 11 per cent reduction.

It was not good news for all homeowners however, with the MoneySupermarket Monitor revealing 10 UK postcodes registering an increase of up to 10 per cent to the cost of home insurance. Unsurprisingly, nine of those were in Greater London. Northern Ireland was the only area outside of Greater London to see an increase to annual premiums.

Hannah Jones, home insurance expert at MoneySupermarket, said: "With energy bills on the rise and Christmas around the corner, insurance deflation in the home insurance markets will be welcome news to those with stretched budgets. Homeowners shouldn't get complacent however, and expect this trend to last.

"Although the overall picture shows the cost of home insurance coming down, our research shows Greater London has been hit hard, with households seeing quite substantial increases to the cost of home insurance. Many factors impact the cost of home insurance and living in a more affluent area can add to the cost of a premium, typically because the value of the property and the contents values will generally be higher. This may be the case in London, as property prices have also bucked the downward trend felt by other regions of the UK.

"The postcode you live in can dramatically affect how much you pay for your home insurance. If your property is classified as being in a 'high-risk' area - whether it be for crime, flooding, expensive or even fraudulent claims - it will be reflected in the cost of your insurance. Unfortunately, there is very little you can do about where you live, except move house, but there are steps everyone can take to reduce premiums, such as installing a home security system or even by joining your local neighbourhood watch.

"In order to capitalise on current low home insurance prices, it's crucial for people to shop around and ensure they get the best possible deal on cover. Finding the best deal on home insurance is quick and easy to do and the average annual saving made by those using MoneySupermarket.com is £126."

Notes to editors:

* MoneySupermarket Monitor on Home Insurance; sixth edition.

Based on 3,311,112 million home insurance quotes from 1st September 2012 to 31st August 2012.

Top 10 postcodes with the largest decreases to the cost of home insurance:

Postcode District Post Area % Decrease GBP Decrease TD Galashiels -11.5% -GBP15.44 SR Sunderland -11.3% -GBP17.14 KY Kirkcaldy -11.0% -GBP16.32 WR Worcester -11.0% -GBP15.89 FY Blackpool -11.0% -GBP18.78 LA Lancaster -10.1% -GBP15.10 NE Newcastle upon Tyne -9.9% -GBP14.17 ST Stoke-on-Trent -9.8% -GBP14.21 DY Dudley -9.8% -GBP13.66 NR Norwich -9.5% -GBP12.15

The 10 postcodes registering an increase to the cost of home insurance:

Postcode District Post Area % Increase GBP Increase EC London EC 10.1% GBP14.83 SW London SW 9.4% GBP14.82 N London N 8.8% GBP15.46 NW London NW 7.5% GBP13.12 SE London SE 6.8% GBP11.24 E London E 6.3% GBP10.12 W London W 5.7% GBP9.18 WC London WC 3.9% GBP4.86 UB Southall 0.6% GBP1.13 BT Northern Ireland 0.4% GBP0.57

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

Average savings of £126.00 on home insurance with MoneySupermarket.com. Based on Online independent research by Consumer Intelligence during 01 September 2012 to 30 September 2012.

MoneySupermarket.com compares (at 30th Aug 2012)

  • 107 car insurance providers and 82 home insurance providers
  • 12 broadband providers and 18 energy providers   
  • 32 unsecured loan and 6 secured loan providers
  • 62 mortgage lenders and 28 credit card providers
  • 66 savings providers and 37 current account providers.
  • Over 1,200,000 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

Home Insurance Premiums Come Tumbling Down - The Herald | HeraldOnline.com

— /PRNewswire/ --

  • Across the UK, home insurance premiums decreased by 5.4 per cent
  • Galashiels, Scottish Borders, sees steepest drop
  • But London bucks the trend with a rise in the cost of home insurance

The cost of home insurance has fallen by 5.4 per cent in the past year, with the average premium now standing at £146, according to analysis of over 3.3 million quotes by MoneySupermarket.

The sixth edition of the MoneySupermarket  Monitor on home insurance* reveals over the 12 months to August 31, 2012: combined buildings and contents insurance saw an average fall of 8.4 per cent, standalone contents insurance premiums decreased by 14.8 per cent and standalone buildings cover by 2.6 per cent. The research also showed residents of the Scottish border town of Galashiels benefited the most from falls in home insurance prices, seeing an 11.5 per cent drop, closely followed by Sunderland, Kirkcaldy, Worcester and Blackpool - all with an 11 per cent reduction.

It was not good news for all homeowners however, with the MoneySupermarket Monitor revealing 10 UK postcodes registering an increase of up to 10 per cent to the cost of home insurance. Unsurprisingly, nine of those were in Greater London. Northern Ireland was the only area outside of Greater London to see an increase to annual premiums.

Hannah Jones, home insurance expert at MoneySupermarket, said: "With energy bills on the rise and Christmas around the corner, insurance deflation in the home insurance markets will be welcome news to those with stretched budgets. Homeowners shouldn't get complacent however, and expect this trend to last.

"Although the overall picture shows the cost of home insurance coming down, our research shows Greater London has been hit hard, with households seeing quite substantial increases to the cost of home insurance. Many factors impact the cost of home insurance and living in a more affluent area can add to the cost of a premium, typically because the value of the property and the contents values will generally be higher. This may be the case in London, as property prices have also bucked the downward trend felt by other regions of the UK.

"The postcode you live in can dramatically affect how much you pay for your home insurance. If your property is classified as being in a 'high-risk' area - whether it be for crime, flooding, expensive or even fraudulent claims - it will be reflected in the cost of your insurance. Unfortunately, there is very little you can do about where you live, except move house, but there are steps everyone can take to reduce premiums, such as installing a home security system or even by joining your local neighbourhood watch.

"In order to capitalise on current low home insurance prices, it's crucial for people to shop around and ensure they get the best possible deal on cover. Finding the best deal on home insurance is quick and easy to do and the average annual saving made by those using MoneySupermarket.com is £126."

Notes to editors:

* MoneySupermarket Monitor on Home Insurance; sixth edition.

Based on 3,311,112 million home insurance quotes from 1st September 2012 to 31st August 2012.

Top 10 postcodes with the largest decreases to the cost of home insurance:

Postcode District Post Area % Decrease GBP Decrease TD Galashiels -11.5% -GBP15.44 SR Sunderland -11.3% -GBP17.14 KY Kirkcaldy -11.0% -GBP16.32 WR Worcester -11.0% -GBP15.89 FY Blackpool -11.0% -GBP18.78 LA Lancaster -10.1% -GBP15.10 NE Newcastle upon Tyne -9.9% -GBP14.17 ST Stoke-on-Trent -9.8% -GBP14.21 DY Dudley -9.8% -GBP13.66 NR Norwich -9.5% -GBP12.15

The 10 postcodes registering an increase to the cost of home insurance:

Postcode District Post Area % Increase GBP Increase EC London EC 10.1% GBP14.83 SW London SW 9.4% GBP14.82 N London N 8.8% GBP15.46 NW London NW 7.5% GBP13.12 SE London SE 6.8% GBP11.24 E London E 6.3% GBP10.12 W London W 5.7% GBP9.18 WC London WC 3.9% GBP4.86 UB Southall 0.6% GBP1.13 BT Northern Ireland 0.4% GBP0.57

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

Average savings of £126.00 on home insurance with MoneySupermarket.com. Based on Online independent research by Consumer Intelligence during 01 September 2012 to 30 September 2012.

MoneySupermarket.com compares (at 30th Aug 2012)

  • 107 car insurance providers and 82 home insurance providers
  • 12 broadband providers and 18 energy providers   
  • 32 unsecured loan and 6 secured loan providers
  • 62 mortgage lenders and 28 credit card providers
  • 66 savings providers and 37 current account providers.
  • Over 1,200,000 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

Minnesota home insurance prices on the rise - WDAY

Fargo, ND (WDAY TV) - Minnesotans are shelling out more money than ever to protect their houses. The average yearly premium for insurance has doubled in the last 10 years.

The average cost of home insurance in Minnesota sits between $700 and $1,200 a month - a lot for the average homeowner.

Before you break the bank on insurance, there are options to keep costs low.

Rick Stotts can feel the pinch on his pocketbook.

Rick Stotts, Moorhead Homeowner: "Insurance was about 300 dollars a month."

Now, his home insurance premiums are up 500 dollars. A significant increase in his 14 years.

Stotts: "Everything is going up. From the grocery store to gas, now this. It all adds up and the pinch gets harder every year."

State Farm Insurance Agent David Eggers says - blame it on our wild weather.

David Eggers, State Farm Ins. Agent: "Hail and wind is driving homeowners and property rates in general."

Eggers says modern building materials don't help. They damage easily.

He says if hail hits an older home, the cost of a claim is between $5,000-10,000. But on a newer home? It can run between $20,000-$40,000.

Eggers: "Typically vinyl siding, steel siding, so when hail comes through it either puts holes in the siding, or dents in the siding."

However, there is hope. Eggers says you can reduce the premium price. You can bundle your home and auto insurance for a discount. Or, install a security system. Either way, you should touch base with your agent often.

Eggers: "Review the coverage they have on their home. Review their deductible. Typically if you take a higher deductible you reduce the insurance cost. That means of course you pay a little more when a claim occurs."

Eggers says severe storms in recent years could have an influence on the rising rate of premiums. From strong winds, to last year's tornado that tore through Minneapolis. It all adds up to be the high price we pay for living in the Midwest.

Tags: kelsey roseth, news, money, minnesota, reporters, updates

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Monday, October 22, 2012

'Actual cash value' policies an option for homeowners insurance - Tulsa World


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Home insurance high on Florida stress list - Sarasota Herald-Tribune

<p>Rising property insurance rates could be a growing political liability for Florida lawmakers, with a new survey indicating home insurance now significantly outweighs property taxes as a financial concern for state residents.</p><p>The annual Leadership Florida survey released this week found that 46 percent of Floridians say property insurance "puts a greater stress on my personal finances" than property taxes, compared with 24 percent who say the opposite is true and 22 percent who were not sure or not affected by the issue.</p><p>That is a much greater spread than 2008, when 36 percent of Floridians said property insurance costs were more of a concern and 31 percent cited property taxes.</p><p>The number of Floridians citing insurance as a greater burden than taxes has increased in every Leadership Florida survey since 2008, leading University of South Florida political science professor Susan MacManus to conclude that "the issue is bubbling up and it's not going away."</p><p>"The common perception is that the government and insurance companies are in bed with each other to the detriment of the public," MacManus said. "People think there's no real interest in the pressure this is putting on the public's pocketbook."</p><p>While property taxes dipped along with property values in the recession, property insurance costs have continued to rise. Many insurers requested double-digit rate increases this year.</p><p>One Allstate affiliate asked regulators to boost rates by 33 percent while Florida's largest property insurance company, state-run Citizens Property Insurance, received approval this month for a 10.8 percent average statewide rate increase.</p><p>Florida homeowners often pay more for property insurance now than they pay in annual property taxes, yet Florida lawmakers and Gov. Rick Scott have continued to push for property tax breaks while simultaneously working to increase Citizens' rates, which also affect those set by the private market.</p><p>Scott and other top state leaders argue Citizens' rates are too low and the company unfairly undercuts private insurers. They want to push more customers into the private market.</p><p>But MacManus said most homeowners are more concerned about rates.</p><p>"People don't really care where they get insurance from," she said.</p><p>Leadership Florida is a nonpartisan organization that seeks to build more civic engagement statewide by cultivating potential leaders from a variety of backgrounds.</p>

Sunday, October 21, 2012

Citizens to pay up to $400000 for reviews of loan plan - Sarasota Herald-Tribune

<p>Two outside auditors will review a plan by state-run Citizens Property Insurance to loan $350 million to private insurers, as questions linger about the program's financial wisdom — and whether it can succeed where past efforts to boost Florida's ailing property insurance market have fallen short.</p><p>Citizens' board of directors voted Friday to hire investment bank Goldman Sachs and a yet-to-be-chosen second company to review the loan proposal and recommend by December whether it is a good idea.</p><p>Top elected officials and consumer advocates have urged Citizens to move slowly on the loan program, which was first pitched by a private insurer in April but received little public attention until last month.</p><p>If history is a guide, state leaders have good reason to want a deeper analysis before so much money is committed.</p><p>Florida has been offering incentives for private insurers to expand since shortly after Hurricane Andrew rocked the state's property insurance industry 20 years ago. But the results have been mixed and customers continue to flock to the government insurer.</p><p>Citizens — now the largest home insurance company in the state with nearly 1.5 million policies — once paid private insurers generous "take out bonuses" of up to 25 percent of a policy's annual premium. But some companies simply pocketed the bonus money and dumped many policies back on the state insurer as soon as possible.</p><p>Georgia State University Professor Robert Klein analyzed private insurers that were formed to take policies out of Citizens' predecessor in the 1990s and found that some quickly went out of business while others seemed to be gaming the system.</p><p>"There were some aspects that I think invited abuse," Klein said.</p><p>Citizens paid $206 million in bonuses to private insurers that took over policies between 1996 and late 2005. Robin Westcott, the state's insurance consumer advocate, said the bonuses "as a long-term strategy weren't very effective" because the policies often returned to Citizens.</p><p>A $250 million loan program approved by the Legislature in 2006 that used money from the state's general fund to help private insurers expand also fell short, Westcott said, with companies writing far fewer than the 1.7 million policies projected.</p><p>"I think that the incentive programs have had marginal success," Westcott said.</p><p>Citizens' latest incentive program could also be abused without more refinement, Westcott added, because there is room for private insurers to take Citizens' policies for a shorter period than what is required, or to replace policies that are canceled for valid reasons with less risky policies.</p><p>" 'The devil is in the details' is a very true statement in this case," she said. "You must plan very carefully how you're going to monitor this."</p><p>Westcott applauded Citizens' board for voting to bring in independent reviewers. The board approved spending up to $200,000 for a review by Goldman Sachs and up to $200,000 more for the second review.</p><p>Citizens President Barry Gilway said that the reviews will "ensure that this program is a prudent investment and in the best interest of Citizens, its policyholders and all Florida taxpayers."</p><p>But some lawmakers say no amount of independent review will suffice. New Port Richey Republican Sen. Mike Fasano, an outspoken critic of Citizens and the loan proposal, said only the Legislature and the governor can approve the program. He expects a legal challenge if Citizens goes forward with the plan without legislative approval.</p><p>"This is unprecedented and, in my opinion, illegal," he said.</p><p>Fasano said the loans are a questionable use of money that should be available to pay Citizens' claims after a hurricane.</p><p>Citizens officials argue the proposal is a creative way to limit the company's liability and the number of potential claims.</p><p>Gov. Rick Scott and top lawmakers have pushed hard in recent years to shrink Citizens and move more policies into the private insurance market. The state-run company has increased rates and decreased coverage in an effort to drive customers away.</p><p>"We have to be willing to make the hard and sometimes unpopular choices," Gilway said.</p>

Costs skyrocket for nursing home insurance - STLtoday.com

The cost of long-term care insurance is soaring. It's up 6 to 17 percent this year, depending on the type of coverage, according to the American Association for Long-Term Care Insurance.

Insurance companies are losing money on the policies, and dropping out of the business.

That has prompted people to wonder if they really need such expensive coverage. A healthy 60-year-old might pay $1,750 a year for a Thrivent Financial policy that will cover home health aides and most nursing home costs for about three years.

This kind of coverage protects your retirement nest egg. So, let's look at the odds of ending up an invalid, and what such bad luck might cost you.

The Department of Health and Human Services says seven out of 10 people will need help when they're old – be it getting out of bed, cooking a meal or getting up the stairs.  They'll need it on average for three years.

They often don't pay for it. Families help out. Grannies move in with the kids. When my 98-year-old mother-in-law started slowing down last year, her bachelor son moved in. It's working out fine.

But paid help is expensive. A home health aide, visiting 18 hours a week, costs an average of $19,656 a year in 2010.

According to the government, 13 percent of us will land in "assisted living" apartments where help comes with the rent. One third of us will spend time in nursing homes, where costs average about $75,000 a year.

Most won't stay long. A 2007 study in California found that 76 percent of nursing home residents stay less than three months. Only one in 10 nursing home patients stays more than a year. (This is important because some long-term care insurance policies won't pay for the first three months.)

So, if you buy a policy, there's a reasonable chance that you'll use it.

But that doesn't mean you need one. If you don't have much money, you can lean on Uncle Sam.

Medicare doesn't pay for nursing or home health care, except under very limited circumstances. Medicaid does pay, but that's a program for the poor. If you have no insurance, you'll have to spend your own money until you're poor by Medicaid's definition.

If you're single, you have to be down to your last $1,000 in savings. But Medicaid lets you keep your house, one car and household goods.

If you're married, your spouse can keep half of the joint assets; the spouse can keep at least $21,912 and as much as $109,560 in Missouri, plus the house and car.

The spouse might be able to keep part of the patient's income, such as a pension, depending on the spouse's needs.

The bottom line: People without much wealth and income don't need long-term care coverage. They won't lose much before Medicaid takes over.

On the other hand, rich people don't need it either. They can pay the bills themselves. Chris Lissner, president of Acropolis Investment Management, draws the line at about $1.5 million. If you have that much, you don't need coverage.

So, long-term care insurance is a product for middle-class people with mid-sized nest eggs who want to preserve what they have, either for a spouse or their heirs.

If you decide to get a policy, shop around. Costs for the same coverage can vary by 90 percent, says Jesse Slome, director of the American Association for Long-Term Care Insurance, which represents insurance agents.

These policies have lots of fine print, so be careful. Slome recommends finding an agent who represents many insurance companies, so he can find a policy that fits you. Don't sign with a newbie; you want someone who understands these policies. Slome points to his group's website, aaltci.org, as a referral site for agents.

Long-term policies are cheaper if you buy when younger, and there's less chance of rejection because of your health. They generally cover nursing homes, in-home care and assisted living centers.

Policies limit the amount per month they'll pay, and the total amount of payments. So, even an insured person can end up poor and on Medicaid after a very long nursing home stay.

Prices are going up fast. Insurers blame low interest rates, which are sapping insurance company profits. Ten of the 20 biggest players have left the market. "Lifetime" benefits are becoming a thing of the past, and customers are cutting back on coverage to avoid rising premiums.

"Changes in interest rates have more impact on long term care than on anything else we sell," says Randall Boushek, chief financial officer at Thrivent Financial for Lutherans. Bucking the trend, Thrivent is getting back into the business after nine years on the sidelines.

Boushek says it's easier to sell women on such policies than men. Women are more likely to have helped care for an older relative, and they don't want to put their children through the same thing.

"It's often less about the cost than if you've had a personal experience with it," he said.

Protect Your Home With Flood Insurance - NASDAQ

I live in Colorado Springs, near where the Waldo Canyon fire destroyed homes this summer. My home was spared, but now that the foothills west of town have burned, flash flooding and mudslides in nearby neighborhoods are possible. Homeowners insurance doesn't cover flooding, so how can homeowners protect themselves?

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Damage from the fires was covered by homeowners insurance. But to cover the risk of floods and mudflows (the technical term for a river of liquid and mud flowing on normally dry land), you need to buy a flood insurance policy from the National Flood Insurance Program. You can buy coverage through your insurance agent, or find agents and price quotes for your address at FloodSmart.gov .

Although the chances of flood and mudflow damage grew after the wildfires, flood insurance prices have yet to rise, says John Prible, of the Independent Insurance Agents and Brokers of America. Some people in the area are paying just $313 a year for $150,000 in structural coverage and $60,000 of coverage for possessions.

The Federal Emergency Management Agency is letting residents of some areas near the Waldo Canyon and High Park wildfires buy flood coverage that kicks in immediately rather than after a 30-day waiting period. (FEMA is approving residents for this exemption on a case-by-case basis, and the coverage must be purchased within 60 days of the fire's containment date. The waiting-period exemption will also apply on a case-by-case basis to people affected by future wildfires.)

But flood insurance is important even if you don't qualify for immediate coverage. Floods and mudflows can occur years after a fire. For instance, vegetation is still sparse after the Hayman Fire in Colorado in 2002, and "those hills are susceptible if we have heavy rains," says Fred Lautenbach, an independent insurance agent in Littleton, Colo.

If you live in a federal disaster area and have damage that isn't covered by insurance, you may qualify for a FEMA grant , a Small Business Administration disaster loan (even if you don't own a business) or tax breaks for uninsured casualty losses . Whether you had coverage or not, you may be eligible for disaster-related unemployment benefits, crisis counseling and other programs, says Micki Trost, of the Colorado Division of Homeland Security and Emergency Management . You can find out about benefits at DisasterAssistance.gov or a FEMA disaster recovery center, or contact your county.

Also, people who were evacuated because of the wildfires may have coverage for hotel costs and other living expenses under their homeowners policy, even if their homes weren't damaged, says Lautenbach.

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