Posted by Benji Riggins on February 3, 2012 under Insurance News | 
Rates won’t rise, but some could pay more if they’re below maximum allowed.
Drivers are getting a little good news: Auto insurance rates are not going up this year.
This is the second year in a row that the state’s auto insurers have not sought a rate increase.
The claims data just didn’t support an increase, said Ray Evans, general manager of the N.C. Rate Bureau, which represents 142 insurance companies that write auto policies in North Carolina
Evans said the frequency and severity of accidents has been stable over the past few years. He credited people driving less frequently, improved car safety and more active law enforcement – particularly the ticketing of people who text while driving.
“Those things have an impact, and we’re seeing the graduated driver license training continue to have an effect. … The fatality rate has dropped dramatically,” he said. “The end result is that with things stable there does not appear to be any need for an increase.”
That doesn’t mean some people won’t see an increase. Some companies may not be charging the maximum allowed and will be able to raise rates.
The average annual premium in North Carolina was $595 in 2008, the most recent data available from the Insurance Information Institute.
The Rate Bureau does not get the last word. That belongs to Insurance Commissioner Wayne Goodwin. And no state insurance commissioner has approved an auto insurance rate increase in 15 years, according to the Department of Insurance.
The DOI staff will review the Rate Bureau’s filing and could conclude that a rate decrease is needed. If that happens, the two sides will negotiate to reach a settlement.
That happened in 2009. Insurers had requested a 1.4 percent increase. But Goodwin ordered a rate decrease of one-half percent. Insurers appealed that decision, and in the meantime, as they are allowed to do, implemented a rate increase. After the settlement, insurers had to refund more than $50 million.
By Mary Cornatzer
mcornatzer@newsobserver.com
Read more here: http://www.charlotteobserver.com/2012/02/03/2980841/auto-insurers-seek-no-increase.html#storylink=cpy
Posted by Benji Riggins on January 20, 2012 under Flood |
If you don’t think your home is at risk for flooding, think again.
People outside of high-risk flood areas receive one-third of disaster assistance for flooding and file more than 20 percent of flood insurance claims, the National Flood Insurance Program says. Floods happen in all 50 states — not just hurricane-prone coastal areas — and are the most common natural disaster in the United States.
“Maybe if you lived on top of a mountain along the Continental Divide, maybe then you wouldn’t need flood insurance, but that’s about the only place you don’t need it,” says J. Fletcher Willey Jr., president of The Willey Agency in Nags Head, N.C.
Yet flood insurance is one of the most misunderstood types of insurance coverage. Here are eight facts to clear up some of the most common misconceptions about coverage through the National Flood Insurance Program:
1. No flood coverage under home insurance
Many people still assume standard renters and home insurance covers floods, says Larry Case, executive vice president of the Missouri Association of Insurance Agents. But you must purchase a separate flood insurance policy to protect your home and belongings from flood damage.
Most flood insurance is provided through the National Flood Insurance Program, administered by the Federal Emergency Management Agency. You can buy federal flood insurance from companies and agents certified to sell it if your community participates in the National Flood Insurance Program.
2. Flood insurance has caps
The amount of coverage you can buy through the NFIP is capped at $250,000 for a home’s structure and $100,000 for contents.
If you want more coverage, you have to buy excess flood insurance, which is sold by private insurance companies. The excess policy covers the cost of flood damage over and above the $250,000/$100,000 caps.
3. Coverage limited in basements
The distinctions can be tricky, so read the policy for details. Some structural elements in the basement are covered, such as central air conditioners, foundation walls, electrical outlets, furnaces and hot water heaters. However, carpeting and floor tile are not covered.
Some appliances in the basement are covered, such as washers and dryers, portable air conditioners and freezers. But refrigerators are not covered. Most personal belongings–including furniture, clothing and electronic equipment–are not covered when they’re in the basement.
4. Building and contents insurance required
A standard home insurance policy automatically covers personal belongings up to a certain percentage of the home’s insured value. With flood insurance, you must purchase contents coverage as well as building coverage to get both.
5. No additional living expenses provided
If your home is destroyed by fire, homeowner insurance pays for the cost to rent comparable living quarters until the house is rebuilt. But flood insurance does not include coverage for additional living expenses. You foot the bill to rent a place to live while your home is being repaired after a flood.
6. No replacement cost coverage for personal belongings
Unlike standard home insurance, which lets you purchase replacement cost coverage for personal belongings, flood insurance features only actual cash value coverage for possessions.
Replacement cost coverage reimburses you for the cost to buy a new item to replace a destroyed belonging. Actual cash value coverage takes depreciation into account and reimburses you for the value of the item at the time it was destroyed. So if a flood destroys your 3-year-old television, flood insurance reimburses you for the value of a used TV–not for the cost to buy a new one.
To qualify for replacement cost coverage to rebuild part of a destroyed building, the home must be your principal residence, and you must have insured it for at least 80 percent of the cost to rebuild or up to the $250,000 cap. Otherwise, reimbursement for rebuilding is based on the actual cash value.
7. Limited coverage on valuables
The coverage for valuables, such as furs and fine art, is limited to $2,500. Currency, precious metals and valuable papers, such as stock certificates, are not covered at all.
8. No flood coverage for hot tubs and swimming pools
Flood insurance doesn’t cover property and belongings outside the home. That includes hot tubs, swimming pools, decks, patios, fences, landscaping, walks, wells and septic systems.
Likewise, flood insurance pays for removal of debris in or on the home’s structure, but not in the yard, Willey says.
Finally, don’t wait until water is lapping at the front door to purchase a policy. Flood insurance has a 30-day waiting period from the date of purchase until the time it goes into effect. The only exceptions are if you’re buying additional insurance when renewing a policy or as a result of a map revision, or if a lender requires flood insurance for a home loan.
Read more: http://www.foxbusiness.com/personal-finance/2011/11/01/flood-insurance-misconceptions-8-facts-should-know/#ixzz1ckCWMw4n
By Barbara Marquand
Posted by Benji Riggins on January 12, 2012 under Insurance News |
One of North Carolina’s largest homeowners’ insurers says it is considering canceling the coverage of up to 70,000 homeowners unless the state Legislature makes changes allowing it to charge higher rates.
North Carolina Farm Bureau Executive Vice President Steve Carroll recently told state lawmakers that the insurer may have to cancel the policies in order to reduce its exposure and make its homeowners’ book of business profitable.
He said that the insurer needs more leeway to enact higher rates, especially given the rising cost of reinsurance, which he said is expected to double as a result of the losses incurred from Hurricane Irene and the spate of tornadoes that touched down in the state last spring.
Carroll estimated that 40 percent of the insurer’s premiums will go towards purchasing reinsurance next year.
“To continue to write property insurance the way we have in North Carolina, we have to have higher rates,” said Carroll.
The North Carolina Rating Bureau negotiates rates on behalf of the 621 property insurers in the state. The proposed rates are then approved, disapproved or modified by the insurance commissioner.
Speaking before a joint legislative Committee on Property Insurance Rate Making, Farm Bureau’s Carroll said the current regulatory structure is workable. However, he said, more emphasis needs to be placed on reinsurance costs and the use of computer models when developing loss estimates.
The Raleigh, North Carolina based-insurer is already making other underwriting changes that could leave an additional 28,000 homeowners scrambling for coverage elsewhere.
Effective January 1, the insurer is following the trend of other carriers to cancel homeowners if they insure their automobiles through another company. The insurer is also canceling homeowners who filed a claim within the last five years.
If the insurer follows through and drops the 70,000 homeowners in addition to the 28,000 policies it is already non-renewing, it would lose about 20 percent of its homeowners’ book of business.
According to the department of insurance, the North Carolina Farm Bureau is the third largest homeowners’ insurer in the state with a 13.9 percent market share.
By Michael Adams | December 29, 2011
Posted by Benji Riggins on January 9, 2012 under Insurance News |
Residents in North Carolina will see a rate decrease when it comes to their dwelling fire coverage while at the same time seeing no change in the cost of their dwelling extended coverage.
North Carolina Insurance Commissioner Wayne Goodwin has ordered a statewide average 7.3 percent reduction in the state’s dwelling and fire policies, which are offered to non-owner occupied residences including rental properties, investment properties, and places not occupied full-time by the property owner. A dwelling fire policy typically does not include liability coverage.
Goodwin also denied a request from the state North Carolina Rate Bureau, which sought a statewide average 36.1 percent increase in extended coverage. The extended coverage policies generally cover physical damage due to wind, hail, fire, smoke, riot, civil commotion, aircraft, and vehicle damage.
After holding several public hearings, Goodwin said he was comfortable with his decisions.
“I found that that the requested increase in extended coverage rates for properties is not warranted and I disapproved the request because it would have led to excessive and unfairly discriminatory rates,” Goodwin said. “Additionally, dwelling policyholders will have the benefit of decreased fire rates.”
By Michael Adams |
Posted by Benji Riggins on December 27, 2011 under Flood |
The federal flood insurance program has been extended until May 31, 2012 under another short-term consolidated appropriations bill (H.R. 2055) passed by the House and Senate and signed into law by President Obama on Dec. 23.
Had the appropriations bill not passed, the National Flood Insurance Program’s authority to issue new or renewal flood insurance policies would have expired at midnight on Dec. 23.
Insurance agents— the Independent Insurance Agents & Brokers of America (Big “I”) — applauded the reauthorization while continuing to press for a longer term authorization and program reforms.
“It is important to note that our work on this important issue is far from over and the next few months provide ample opportunity for Congress to pass long-term extension and reform legislation that provides the necessary certainty for consumers,” said Charles E. Symington Jr., Big “I” senior vice president for government affairs.
Symington noted that Congress has traditionally extended the program for five year periods in order to provide stability for the marketplace; however, for the last few years Congress had only extended the program for short periods, mostly from 30 days to six months.
“Today’s extension, although greatly appreciated, is just a temporary patch,” said John Prible, Big “I” vice president for federal government affairs.
Posted by Benji Riggins on December 7, 2011 under Insurance News |
Gary Puffpaff was irritated when he got a letter from Allstate Insurance informing him his homeowners’ policy wouldn’t be renewed because he had his auto insurance with another company.
Not only did Puffpaff question whether the insurer’s action was legal – which, it turns out, it is – but he also was upset because Allstate canceled his auto policies a half-dozen years ago after he filed three large claims.
“Every time I see their commercial I laugh about what they say, because I don’t believe a word … about (how) they take care of you and all that,” said Puffpaff, 61, a repair technician who lives in Charlotte. “They only want your money.”
This year, two of the most popular underwriters of homeowners insurance policies in North Carolina – Allstate and N.C. Farm Bureau – adopted underwriting guidelines that link homeowners policies with auto policies across the state.
Both companies cite economics as the reason for their stance. In the case of Allstate, if you don’t have an auto insurance policy from us, they’re telling customers, your homeowners policy won’t be renewed.
The Farm Bureau’s guidelines are slightly different, winnowing out those who don’t have a Farm Bureau auto policy and who also have filed a claim on their homeowners policies within the past five years. Similarly, new Farm Bureau customers who want to buy a homeowners policy also will have to buy auto insurance.
Like many insurers, it also offers a discount for bundled policies. The Farm Bureau also will “reconsider” renewing a homeowners policy if a customer wants to purchase an auto policy after being notified of the company’s new guidelines, said Steve Carroll, executive vice president and general manager at Raleigh-based Farm Bureau.
That’s not an option with Allstate, said spokesman Tracy Owens. Allstate’s underwriting guidelines, which took effect at the beginning of the year, affect 46,000 homeowners policyholders; Farm Bureau’s guidelines, which take effect Jan. 1, will affect 28,000 homeowners policyholders, according to the companies. Policyholders are being notified about the new guidelines 60 to 90 days in advance of their policy renewal date.
Farm Bureau ranks third, with a 13.9 percent share, in the state’s homeowners insurance market and Allstate ranks fourth with an 8.7 percent share, according to the state Insurance Department.
The department searched its database of consumer complaints at The (Raleigh) News & Observer’s request and found it received 33 complaints about the policy linkage this year.
Fairness is a judgment call, but linking policies is considered legal in North Carolina. Bob Mack, deputy commissioner of the Insurance Department’s property and casualty division, said state law doesn’t regulate underwriting guidelines – which spell out under what circumstances an insurer will sell you a policy – “provided it’s not discriminatory.”
Insurers have adopted similar underwriting guidelines in North Carolina in the past. Insurers have adopted such guidelines in other states, but not always successfully.
In 2007, Allstate discontinued its practice of linking homeowners policies with auto policies or life insurance policies after New York regulators directed it to do so, according to the trade publication Insurance Journal.
State regulators contended the practice violated anti-rebating and anti-discrimination sections of New York insurance law; Allstate complied with the directive even though it contended it had the legal right to link the policies.
The policy linkage required by Farm Bureau and Allstate in North Carolina is one-way only. Both companies are willing to provide your auto insurance even if you don’t have a homeowners policy with them.
That makes sense because auto insurance is viewed by the industry as an attractive business and homeowners insurance isn’t, Mack said. “It’s a business decision that we’re doing this,” said the Farm Bureau’s Carroll. “No insurance company likes to discontinue coverage.”
When it comes to homeowners insurance, “even in a good year … we’re lucky to break even,” Carroll said.
This year, he said, hasn’t been a good year, with Hurricane Irene, the deadly tornadoes that tore through the state and a flurry of other storms.
Raising insurance premiums isn’t an option now. The state regulates homeowners insurance and imposes a cap on premiums.
“Obviously, the decision was carefully considered,” said Allstate spokesman John Heid. “It’s the right decision that will help us remain financially strong for the customers and the communities we serve.”
Of the top five homeowners insurance companies in the state, only Farm Bureau and Allstate have such guidelines.
The other three – State Farm, Nationwide and USAA, which caters to current and former members of the military and their families – say that they don’t link homeowners and auto policies and have no plans to do so.
By David Ranii
dranii@newsobserver.com
Posted: Friday, Nov. 25, 2011
Read more: http://www.charlotteobserver.com/2011/11/25/2802958/new-insurance-rules-draw-ire.html#ixzz1ej9V3k8w
Read more: http://www.charlotteobserver.com/2011/11/25/2802958/new-insurance-rules-draw-ire.html#ixzz1ej9Q05ib
Posted by Benji Riggins on December 3, 2011 under Insurance News |
It is no secret that insurance companies use the credit scores of individuals as one tool in the approval/disapproval process and in establishing premiums.
Most courts allow this process as long as the scoring is uniformly applied to all insureds and is consistent with the purposes of the individual state’s insurance code. But just because credit scoring is legal does not make it right.
Insurers contend that there is a clear correlation between credit scores and the risk of loss; that is, the lower the credit score, the more likely that the insured will file a claim. This may be statistically correct, but I wonder if insurers take into consideration the fact that the credit-scoring companies often make mistakes. And, what is even worse, the credit-scoring companies don’t admit mistakes or when they do, it takes months and even years to make the corrections.
That is not going to help any potential insured get coverage when it is needed.
Insurers want to attract and retain low-risk customers since this is a way to make a profit, but many state insurance codes have the express purpose of making insurance available and affordable for everyone. Turning away a potential customer or charging the customer prohibitively high premiums because of some anonymous crowd of pencil-pushers using subjective standards does not seem to me to be living up to that express (and grand) purpose.
Plus, I just find it irritating that these credit-scoring agencies have so much power over the daily lives and operations of citizens (and even countries as the effect of the downgrading of the U.S. credit rating shows).
Now, before anyone thinks I am complaining because I have a low credit score, the fact is that I don’t. And I realize that an insurer needs to make a profit to continue in business.
But credit scoring still seems to me to be a crude, unfair, overly subjective way to set underwriting standards. There has to be a better way to establish the insurance-worthiness of a potential customer.
Those in the insurance business are intelligent people, and ignoring credit scores or at least downgrading their importance when it comes to the approval/disapproval process and establishing premiums cannot be that hard a task.
About the Author
David D. Thamann
David D. Thamann, JD, CPCU, ARM, is managing editor for FC&S Online. He may be reached at dthamann@sbmedia.com.
Posted by Benji Riggins on November 29, 2011 under Insurance News |
The 2011 Atlantic hurricane season officially ends Wednesday, having produced a total of 19 tropical storms of which seven became hurricanes, including three major hurricanes. This level of activity matched predictions by the National Oceanic and Atmospheric Administration (NOAA) and continues the trend of active hurricane seasons that began in 1995.
The 19 tropical storms represent the third-highest total (tied with 1887, 1995, and 2010) since records began in 1851 and is well above the average of 11. However, according to NOAA, the number of hurricanes and major hurricanes is only slightly above the average of six and two, respectively. This year’s totals include a post-storm upgrade of Tropical Storm Nate to hurricane status, and the addition of a short-lived, unnamed tropical storm that formed in early September between Bermuda and Nova Scotia. This unnamed storm, along with several other weak, short-lived named storms, could have gone undetected without modern satellite technology.
Irene was the lone hurricane to hit the United States in 2011, and the first one to do so since Ike struck southeast Texas in 2008. Irene was also the most significant tropical cyclone to strike the Northeast since Hurricane Bob in 1991.
“Irene broke the ‘hurricane amnesia’ that can develop when so much time lapses between landfalling storms,” said Jack Hayes, Ph.D., director of NOAA’s National Weather Service. “This season is a reminder that storms can hit any part of our coast and that all regions need to be prepared each and every season.”
As far as landfalling major hurricanes (Category 3, 4 or 5 with top winds of 111mph and greater) are concerned, the lull continues. 2011 marks a record six straight years without one hitting the United States. The last one to do so was Wilma in 2005. Nonetheless, wind is not the only threat with tropical systems as proven by Irene and Lee, which caused deadly and destructive flooding. On average, more than half of the fatalities related to tropical systems are due to flooding.
Hayes said Hurricane Irene is an example of increasing accuracy in forecasting storm track. Its landfall in eastern North Carolina and path northward were accurately predicted more than four days in advance by NOAA’s National Hurricane Center using information from weather satellites, hurricane models, aircraft observations, and other data. NOAA’s forecasts allowed emergency officials to plan necessary evacuations and sparked individuals to take safety precautions. But a weaker-than- at landfall also highlighted the challenges that remain in forecasting storm intensity, NOAA officials said.
“Improving intensity forecasts is a focus of ongoing research and is part of NOAA’s Hurricane Forecast Improvement Project,” said Frank Marks, Ph.D., director of NOAA’s Hurricane Research Division. HFIP bridges research and operational components to better anticipate rapid changes in storm intensity and its goal to extend track forecasts from the current five days to seven days.
“Although the 2011 hurricane season has ended, our need to prepare for disasters hasn’t,” said Craig Fugate, administrator of the Federal Emergency Management Agency. “Being prepared for all kinds of hazards, from hurricanes to blizzards to tornadoes, is a year-round activity. We encourage all members of the team, especially the public, to continue to prepare for emergencies by staying informed of forecasted weather events, making an emergency plan, and building your emergency preparedness kit. Visit Ready.gov to learn more.”
NOAA said it will issue its initial outlook for the 2012 hurricane season in May just prior to the official start of the season on June 1.
Posted by Benji Riggins on November 26, 2011 under Insurance News |
Some North Carolina residents who insure their residences through Allstate are finding themselves dropped by the company for refusing to bundle their home and auto coverage.
Allstate Insurance Co. has informed 45,000 homeowners that it will non-renew their homeowner’s policy unless they also purchase a commercial or private automobile insurance from the insurer by Dec. 15, 2011.
Allstate spokesperson Tracy Owens, speaking from the insurer’s Southeast Regional Office in Atlanta, said the decision came about after an intensive review of the insurer’s North Carolina book of business.
“We wanted to be sure that we could manage our risk both now and in the future and protect the other 400,000 households we insure,” Owens said.
According to documents filed with the North Carolina Department of Insurance, Allstate indicated that it would non-renew 30,400 standard homeowners policies, 10,500 landlord packaged policies, and 4,900 mobile homes policies.
Owens said that although Allstate has decided it must drop the policies, it is providing another coverage option from the Universal North America Insurance Co.
Allstate has reached an agreement with Universal whereby it will provide a quote for 26,150 of the affected homeowners. The Denver, Colo.-based Universal also is slated to submit a quote to 9,300 of the 10,500 landlords losing their Allstate coverage.
In a separate deal, the mobile home owners will have an opportunity to find coverage through the American Modern Insurance Group.
North Carolina Department of Insurance spokesperson Kerry Hall said that as a matter of professional courtesy Allstate informed the department of its decision to non-renew the policies, although the insurer had no legal requirement to do so.
“From our perspective, what Allstate is doing is legal as long as it gives consumers a 30-day notice before cancelling the policy,” said Hall.
By Michael Adams | November 22, 2011
