Posted by Benji Riggins on July 23, 2010 under Claims | 
The number of hail loss claims filed with insurers increased by 61 percent, from 256,000 in 2006 to over 413,000 in 2009.
At the same time, the number of claims referred for suspected fraud increased by 136 percent, from 301 in 2006 to 711 in 2009, according to a National Insurance Crime Bureau report that examines both hail loss claims and hail loss questionable claims (QCs) for the period Jan. 1, 2006 through March 31, 2010.
During this period, Texas was the top state in both hail loss claims and hail loss QCs with 298,798 claims and 521 QCs. The top 10 states represented 75 percent of the total number of hail losses and 82 percent of the QCs.
Illinois had the highest ratio of hail loss QCs to claims, with 881 hail loss QCs for every 1,000 hail loss claims. Nearly nine of every 1,000 claims filed for hail loss were deemed suspicious enough to forward to NICB for further investigation.
“These statistics back up what our agents have been experiencing in their field investigations,” said Joe Wehrle, NICB president and CEO. “There are a lot of unscrupulous fly-by-night roofers and repairmen who are what we call ’storm chasers.’ They follow the storms and deliberately try to rip off unsuspecting home owners and their insurers by making unnecessary repairs or deliberately inflicting intentional damage to a roof or siding to try to get insurance money.”
The National Insurance Crime Bureau, headquartered in Des Plaines, Ill., is supported by nearly 1,100 property and casualty insurance companies and self-insurers.
Read more: http://www.insurancejournal.com/news/national/2010/06/03/110366.htm#ixzz0ptzD2UH7
Posted by Benji Riggins on July 13, 2010 under Insurance News |
An “active to extremely active” hurricane season is expected for the Atlantic Basin this year, according to the seasonal outlook issued today by NOAA’s Climate Prediction Center – a division of the National Weather Service.
Across the entire Atlantic Basin for the six-month season, which begins June 1, NOAA (National Oceanic and Atmospheric Administration) is projecting a 70 percent probability of the following ranges:
14 to 23 named storms (top winds of 39 mph or higher), including:
8 to 14 hurricanes (top winds of 74 mph or higher), of which:
3 to 7 could be major hurricanes (category 3, 4 or 5; winds of at least 111 mph)
“If this outlook holds true, this season could be one of the more active on record,” said Jane Lubchenco, Ph.D., under secretary of commerce for oceans and atmosphere and NOAA administrator. “The greater likelihood of storms brings an increased risk of a landfall. In short, we urge everyone to be prepared.”
The outlook ranges exceed the seasonal average of 11 named storms, six hurricanes and two major hurricanes.
According to NOAA, the expected factors supporting this outlook are:
Upper atmospheric winds conducive for storms. Wind shear, which can tear apart storms, will be weaker since El Niño in the eastern Pacific has dissipated. Strong wind shear helped suppress storm development during the 2009 hurricane season.
Warm Atlantic Ocean water. Sea surface temperatures are expected to remain above average where storms often develop and move across the Atlantic. Record warm temperatures – up to four degrees Fahrenheit above average – are now present in this region.
High activity era continues. Since 1995, the tropical multi-decadal signal has brought favorable ocean and atmospheric conditions in sync, leading to more active hurricane seasons. Eight of the last 15 seasons rank in the top ten for the most named storms with 2005 in first place with 28 named storms.
“The main uncertainty in this outlook is how much above normal the season will be. Whether or not we approach the high end of the predicted ranges depends partly on whether or not La Niña develops this summer,” said Gerry Bell, Ph.D., lead seasonal hurricane forecaster at NOAA’s Climate Prediction Center. “At present we are in a neutral state, but conditions are becoming increasingly favorable for La Niña to develop.”
FEMA Ready
Meanwhile, the Federal Emergency Management Agency is urging residents to prepare.
“FEMA is working across the administration and with our state and local partners to ensure we’re prepared for hurricane season,” said FEMA Administrator Craig Fugate. “But we can only be as prepared as the public, so it’s important that families and businesses in coastal communities take steps now to be ready. These include developing a communications plan, putting together a kit, and staying informed of the latest forecasts and local emergency plans. You can’t control when a hurricane or other emergency may happen, but you can make sure you’re ready.”
President Obama recently designated May 23 through 29 as National Hurricane Preparedness Week. NOAA and FEMA encourage those living in hurricane-prone states to use this time to review their overall preparedness. More information on individual and family preparedness can be found at http://www.Ready.gov and http://www.hurricanes.gov/prepare.
NOAA said its scientists will continue to monitor evolving conditions in the tropics and will issue an updated hurricane outlook in early August, just prior to what is historically the peak period for hurricane activity.
Read more: http://www.insurancejournal.com/news/national/2010/05/27/110239.htm#ixzz0pu54dqxt
Posted by Benji Riggins on July 1, 2010 under Flood |
The U.S. Senate last night approved a temporary reauthorization of the federal flood insurance program until Sept. 30. The reauthorization of the National Flood Insurance Program (NFIP) is retroactive to June 1, the date the program was halted.
The unanimous Senate vote sent the measure to President Barack Obama for his signature. The House had previously approved reauthorization.
Once President Obama signs the bill into law, the NFIP should return to normal operations, according to the Independent Insurance Agents & Brokers of America (the Big “I”). Also, since the extension is retroactive, any new policy applications or renewals that were signed and submitted during the hiatus will be effective from the date of application or, in the case of waiting periods, the waiting period will start from the date of application.
The Big “I” said that while the resumption of the program is welcome, the spring lapse — the third time this year it has been forced to halt operations– has caused difficulties for homeowners and small businesses.
“It is alarming that the NFIP was allowed to remain expired for so long, causing so much confusion and potentially leaving desperate homeowners and small businesses unprotected for almost a month,” said Robert Rusbuldt, Big “I” president and CEO. “While the Big ‘I’ is appreciative of Congress extending the program on a temporary basis, we are also greatly concerned that these short expiration periods and patchwork of temporary extensions will negatively impact the market.”
The industry has urged Congress to enact a long term extension of the program.
“The hurricane season runs two months beyond the NFIP’s new Sept. 30 expiration date,” said Jimi Grande, National Association of Mutual Insurance Companies (NAMIC) senior vice president of federal and political affairs. “Congress must not let the program lapse again, but that’s just the minimum. The best thing they can do is take this time to pass legislation that would implement common sense reforms and help the NFIP make the first steps towards financial soundness.”
HR 5114, sponsored by Rep. Maxine Waters, D-Calif., is awaiting action by the House and would reauthorize the NFIP for five years.
Read more: http://www.insurancejournal.com/news/national/2010/07/01/111226.htm#ixzz0sRmFmA6x
Posted by Benji Riggins on June 23, 2010 under Flood |
The House of Representatives has passed another temporary extension of the National Flood Insurance Program until Sept. 30, 2010.
The program has been suspended from issuing new policies since May 31. Reauthorization provisions have been embedded in controversial legislation on jobless benefits and tax breaks that has been twice voted down in the Senate.
The newly-passed House bill, HR 5569, was sponsored Rep. Maxine Waters, D-Calif., and Rep. Walter Jones, R-N.C.
The Senate must still act on it.
The Independent Insurance Agents and Brokers of America (Big “I”) commended the House for its vote and urged the Senate to act quickly.
“The program has been expired since May 31, putting millions of consumers at risk from the economic dangers of flood right in the midst of the hurricane season and storm season in the Midwest. The expiration has also threatened to wreak havoc in both the real estate and insurance markets during a period of great economic difficulty. It is vital that the program be extended and we therefore urge the Senate to act on this bill without delay,” said Charles Symington, Big “I” senior vice president of government affairs.
The program has been unable to issue new or renewal policies since it was shut down May 31, although it is still paying claims. It is the fourth time in the past year that the program has been interrupted due to the failure of Congress to reauthorize it for an extended period.
The Big “I” and other industry groups hope that Congress will move beyond temporary extensions and pass legislation that authorizes the program for five years and makes certain reforms to it.
Read more: http://www.insurancejournal.com/news/national/2010/06/23/111009.htm#ixzz0rhwYXnlQ
Posted by Benji Riggins on June 18, 2010 under Flood |
The Senate today voted against legislation that included a provision to reauthorize the National Flood Insurance Program (NFIP).
Along with short term extensions for numerous other federal programs, the NFIP extension was passed by the House just prior to the Memorial Day recess. It was voted down by the Senate today amid concerns that other, unrelated provisions in the bill would add to the federal budget deficit. Should the Senate approve an amended version, the legislation would have to go back to the House for another vote in that chamber.
The Senate vote drew criticism from the National Association of Mutual Insurance Companies (NAMIC).
“It’s been over two weeks since the National Flood Insurance Program was allowed to expire, and the program is still being held up because of unrelated issues,” said Jimi Grande, NAMIC senior vice president of federal and political affairs. “This lack of action by Congress is unacceptable, particularly when we’re in the first few weeks of the 2010 hurricane season.”
The Atlantic storm season began June 1 and the National Oceanic and Atmospheric Administration has forecasted that 2010 will be among the most active seasons ever. The NOAA predicts that 2010 will see 14 to 23 named storms, with eight to 14 of those developing into hurricanes. Of those, the NOAA has said that three to seven may develop into Category 3 or above hurricanes with winds of over 110 miles per hour.
“We cannot afford to have political disagreements get in the way of protecting millions of Americans from flood losses,” Grande said.
Source: NAMIC
Read more: http://www.insurancejournal.com/news/national/2010/06/16/110798.htm#ixzz0rDbxnJHL
Posted by Benji Riggins on June 14, 2010 under Insurance News |
The 2010 Atlantic hurricane season will be even more active than feared, leading U.S. forecasters said Wednesday as they predicted 10 hurricanes, five of them major, with a 76 percent likelihood that a major hurricane would hit the U.S. coastline.
The outlook from the Colorado State University team follows predictions by U.S. government scientists for an intense season that could disrupt efforts to contain a huge Gulf of Mexico oil spill and also batter earthquake-ravaged Haiti.
Increasing a previous estimate for a “very active” season, the leading CSU storm research team founded by hurricane forecast pioneer William Gray said the six-month season beginning on June 1 would likely see 18 named tropical storms.
Of these, CSU saw 10 becoming hurricanes, with five becoming major Category 3 or higher hurricanes with winds above 110 miles per hour.
The CSU scientists increased their forecast from an April 7 prediction of 15 named storms, eight hurricanes and four major hurricanes.
“The probability of a major hurricane making landfall along the U.S. coastline is 76 percent compared with the last-century average of 52 percent,” said forecaster Phil Klotzbach, who works with Gray.
The CSU team saw a 51 percent chance that a major hurricane would make landfall on the U.S. East Coast, including the Florida Peninsula, and a 51 percent chance that one would hit the Gulf Coast, from the Florida Panhandle to Brownsville, Texas.
It put the chance of a major hurricane tracking into the Caribbean at 65 percent.
The expected extreme hurricane season this year is seen posing a threat to efforts to control and clean up oil spewing from a ruptured Gulf of Mexico well owned by BP Plc, described by President Barack Obama’s administration as the worst environmental disaster in U.S. history.
Experts warn that a storm surge in the Gulf of Mexico — an abnormal rise in sea level created by a hurricane — could whip the oil slick and chemicals used in trying to disperse it out of the Gulf and ashore on beaches, vegetation and even homes.
HAITI VULNERABLE
“If the storm tracks to the west of the oil, there is the potential that the counter-clockwise circulation of the hurricane could drive some of the oil further toward the U.S. Gulf Coast,” Klotzbach said.
But he added the forecasters did not see the huge, fragmented oil slick itself having much of an impact on any tropical storm or hurricane passing over the area.
There are fears too about how a major hurricane sweeping through the Caribbean over Haiti would affect around 1.5 million homeless survivors of the Jan. 12 earthquake who are camping out in the streets under tents and tarpaulins.
Quake survivors living in the makeshift camps are seen as highly vulnerable to the tropical rains, flooding and landslides which have killed thousands of Haitians in the past.
Detailing weather conditions seen favoring the formation of hurricanes, Gray said the CSU team increased its forecast “due to a combination of a transition from El Nino to current neutral conditions and the continuation of unusually warm tropical Atlantic sea surface temperatures.”
Warmer waters contribute to the development of hurricanes and dissipation of the El Nino weather phenomenon over the Pacific Ocean reduces the probability of wind shear — caused by a clash between prevailing upper-levels winds out of the west and lower-level easterly winds out of Africa — that can tear apart hurricanes or break up their circulation.
The National Oceanic and Atmospheric Administration last week predicted one of the more active hurricane seasons on record, forecasting 14 to 23 named storms, with eight to 14 becoming hurricanes, nearly matching 2005’s record of 15.
The Gulf Coast may see a repeat of the 2005 season when a record 28 storms formed, which killed nearly 4,000 people and caused an estimated $130 billion in damages. The list included Hurricane Katrina, which devastated New Orleans.
By Pascal Fletcher
June 3, 2010
(Editing by Tom Brown and Mohammad Zargham)
Read more: http://www.insurancejournal.com/news/national/2010/06/03/110405.htm#ixzz0pu01Qk26
Posted by Benji Riggins on June 9, 2010 under Safety |
Crime rates declined in both violent and property crimes in the United States last year, according to the FBI’s Preliminary Annual Uniform Crime Report released today.
Preliminary 2009 statistics indicate that violent crime in the nation decreased 5.5 percent and property crime declined 4.9 percent when compared with data from 2008. Data in the report came from 13,237 law enforcement agencies that submitted six to 12 months of data in both 2008 and 2009.
Highlights from the report include:
Property Crime
• All property crime offenses—burglary, larceny-theft, and motor vehicle theft—decreased in 2009 when compared with 2008 data. Motor vehicle theft showed the largest drop in volume at 17.2 percent, larceny-thefts declined 4.2 percent, and burglaries decreased 1.7 percent.
• The nation’s largest cities, one million or more inhabitants, reported the greatest decrease, 7.9 percent, in property crime overall. Of the city groupings, this population group also reported the biggest decreases in the offenses that comprise property crime: a 21.1 percent drop in motor vehicle theft, a 5.7 percent decline in burglary, and a 5.5 percent decrease in larceny-theft. In the nation’s nonmetropolitan counties, larceny-thefts fell 9.5 percent; in metropolitan counties, larceny-thefts declined 5.9 percent.
• The only population group to indicate a rise in any type of property crime was in nonmetropolitan counties, where burglary rose 0.5 percent.
• In comparing 2008 data and 2009 data by region, law enforcement agencies in the West reported the biggest decline in property crime, with a decrease of 6.8 percent. Property crime declined 5.6 percent in the Midwest, 5.3 percent in the Northeast, and 3.2 percent in the South.
Arson
• Arson offenses, which are tracked separately from other property crimes, declined 10.4 percent nationwide. All population groups reported decreases in the volume of arson offenses. In addition, arson fell in all four of the nation’s regions: 11.6 percent in the West, 10.6 percent in the South, 9.2 percent in the Midwest, and 8.6 percent in the Northeast.
Violent Crime
• All four violent crime offenses — murder and nonnegligent manslaughter, forcible rape, robbery, and aggravated assault—declined nationwide in 2009 when compared with 2008 data. Robbery dropped 8.1 percent, murder decreased 7.2 percent, aggravated assault declined 4.2 percent, and forcible rape decreased 3.1 percent.
• Violent crime fell in all city groupings. The largest decrease, 7.5 percent, was in cities with populations ranging from 500,000 to 999,999 inhabitants. Violent crime declined 4.0 percent in the nation’s metropolitan counties and 3.0 percent in nonmetropolitan counties.
• Cities with 25,000 to 49,999 inhabitants were the only city population group to report an increase in the number of murders, 5.3 percent. The number of murders in the nation’s nonmetropolitan counties also rose, 1.8 percent.
• Forcible rape trends dropped in all city population groups. The largest decrease was 7.3 percent in cities of less than 10,000 residents. Metropolitan counties reported a 3.7 percent decline in the number of rapes, but the number of rapes reported in nonmetropolitan counties rose slightly, 0.3 percent.
• All population groups reported decreases in the volume of robbery in 2009. Of the city groups, cities with populations of 100,000 to 249,999 had the largest decrease at 10.3 percent. Metropolitan counties reported a 6.7 percent drop in robberies; nonmetropolitan counties reported a 0.7 percent decline.
• The number of aggravated assaults declined in all population groups, with cities of 500,000 to 999,999 inhabitants reporting a 6.3 percent decrease. Aggravated assaults declined 3.7 percent in nonmetropolitan counties and 3.0 percent in metropolitan counties.
• All four regions in the nation showed decreases in violent crime in 2009 when compared with data from 2008. Violent crime decreased 6.6 percent in the South, 5.6 percent in the West, 4.6 percent in the Midwest, and 3.5 percent in the Northeast.
Source: FBI
Read more: http://www.insurancejournal.com/news/national/2010/05/25/110166.htm#ixzz0p305rcFX
Posted by Benji Riggins on June 4, 2010 under Flood |
The National Flood Insurance Program (NFIP), which expired at midnight on May 31, is not expected to be able to issue new policies for a week or longer.
As reported by Insurance Journal last Friday, Congress left town for the Memorial Day holiday without acting on legislation to reauthorize the program and Congress is not expected to take it up again until June 7, at the earliest. Bills have been introduced in both the House and the Senate to extend the program until the end of the year, but Congress has yet to consider these measures.
The hiatus– the fourth within a year– comes at the opening of the Atlantic hurricane season, which forecasters say will be very active.
If past NFIP suspensions are any indication, it will mean frustration and delays for property owners and property buyers and insurance agents trying to serve them.
“The series of temporary extensions, last minute actions and service lapses during such a delicate period in the American economy is troubling to agents, homeowners and small businesses,” says Charles Symington, senior vice president of government affairs for the Independent Insurance Agents and Brokers, or Big “I.”
Symington said the program is meant to provide some level of stability and protection for homeowners and businesses against unpredictable flooding events, “not to be an unpredictable ‘here one minute-gone the next’ program subject to monthly congressional action.”
Insurers also lamented the lack of federal action.
“Once again, the NFIP has become a victim of politics that have nothing to do with the program itself,” said Kathy Mitchell, National Association of Mutual Insurance Companies, federal affairs director. “Allowing the NFIP to lapse just as the 2010 storm season is beginning shows a troubling lack of judgment on the part of Congress.”
Many in the insurance industry support a five-year extension of the program. Congress has traditionally extended the program for five year periods but in the past year it began extending the program only for short periods, from 30 days to six months, as the reauthorization has become tied up with controversial legislation involving unemployment benefits, tax breaks, Medicare payments to doctors and other issues unrelated to flood insurance.
“Lapses in this program cause confusion and leave many homeowners and small businesses unprotected during a very dangerous time. The Big ‘I’ is also concerned that the uncertainty of temporary extensions and the numerous lapses that have already occurred in the last few months will negatively impact the market,” said Robert Rusbuldt, president and CEO of the Big “I.”
Read more: http://www.insurancejournal.com/news/national/2010/06/01/110348.htm#ixzz0poaZpNKt
Posted by Benji Riggins on May 3, 2010 under Flood |
“Homeowners can mitigate against wind damage, but they’re powerless, really, to do anything against storm surge,” says one researcher whose job it is to develop ways to determine the vulnerability of homes and other properties not only to storm surge, but wildfires, sinkholes, earthquakes and other natural perils.
Dr. Howard Botts, vice president and director of development for First American Spatial Solutions (FASS), says a recent report and model developed by his company are able to demonstrate how destructive, both physically and financially, storm surge can be.
Storm surge is “such a large scale phenomenon that doesn’t really respect construction and other kinds of things,” Botts said. “If you’re in a storm surge zone, you’re likely to be impacted by it.”
Until Hurricane Katrina in 2005, however, the impact of storm surge on the overall property losses caused by hurricanes was generally not in the forefront of concern to most residential property insurance companies. After all, storm surge was a flood loss not covered by the traditional homeowners insurance policy.
Katrina and the lawsuits that followed changed that mindset.
Insurers, and indeed the world, saw first hand the amount of damage storm surge could produce. Just three years later, Hurricane Ike blasted ashore near Galveston, Texas, with a massive storm surge that helped it become the third most costly U.S. hurricane on record, largely due to the surge.
A member of the First American Corp. family of companies, FASS has access to information on around 90 percent of all the private properties in the United States, or at least 124 million separate addresses. The group has used that information to develop a model to analyze storm surge exposure at the individual property level.
The 2010 First American Storm Surge Report released in late March illustrates the exposure of single residential structures to storm surge in 13 key geographic areas. The numbers are massive. The storm surge exposure to Miami alone in the event of a Category 5 hurricane $53.6 billion, according to the report.
Flood Coverage or Not?
Insurance agents throughout the United States, and especially those whose customers own properties near the nation’s coastlines, are painfully aware that only a fraction of residential property owners that need the protection of flood insurance actually buy it. Even homeowners in areas that are high risk for flooding sometimes are reluctant to spend the extra money, although the coverage is far less expensive than traditional property insurance.
Botts said the information provided by the storm surge hazard model could be a useful tool for agents and insurance companies to use to educate insureds about the danger of storm surge in vulnerable coastal areas — and in informing property owners of the need to buy flood insurance.
“What we do is we build large, hazard risk data sets, tax data sets, sales and use tax, premium tax for the insurance industry. And we combine these very granular risk-hazard or tax databases with a geocoder that we developed, which takes an address and can get you right down to, literally, the rooftop,” Botts said.
What this means for insurers, and agents, is that they can visibly show owners of properties along and near the hurricane prone coastlines just what the impact of storm surge from a Cat 1 or Cat 5 hurricane, or any size storm in between, would be on a particular insured’s property.
For example, storm surge report released in March was designed “to look at 13 major residential property markets in the Gulf and Atlantic coastal region and understand, at a property-by-property level, which of these properties were in a storm surge potential area or would be exposed to storm surge,” Botts explained. Then property-by-property the dollar value of those single family homes — the buildings only, not the contents — in potentially affected areas was determined.
A Ton of Water
“Storm surge moves with the forward speed of the hurricane — typically 10–15 mph,” the report states. “One cubic yard of sea water weighs 1,728 pounds — almost a ton.”
Adding to the impact of rushing water, the trees, pieces of buildings and other debris that are typically caught up in the swirl act as a battering rams when they come into contact with a stationary object, such as another building.
Even areas that are not in direct path of a hurricane can be hugely impacted, as evidenced during Hurricane Ike, when its storm surge powered north up Galveston Bay, along the east side of Houston.
Botts says natural and man-made channels and barriers can add to the destructive possibilities.
“What’s going to facilitate inward movement? Creeks, bayous, drainage ditches,” he said, adding that un-raised highways and railroad rights-of-way can also serve that purpose. Meanwhile, natural and man-made barriers, such as hills, levees, even mounds of earth can keep the surge from flowing out of inland areas.
“We spend an enormous amount of time looking at what happens once that water gets onshore, what are the likely areas of inundation,” Botts said.
Listen to Insurance Journal’s interview with Dr. Howard Botts online at http://www.insurancejournal.tv/videos/3622/.
By Stephanie K. Jones
April 30, 2010
