State Farm pulls out

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Lindaloo
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State Farm pulls out

#1 Postby Lindaloo » Wed Feb 14, 2007 11:19 pm

State Farm Insurance announced Wednesday that the company is suspending sales of any new commercial or homeowner policies in Mississippi starting Friday.

State Farm cites the wave of litigation and legal uncertainties the company has faced since Katrina as two reasons why it's suspending new business.

Mike Fernandez, vice president of public affairs for State Farm, said Mississippi's "current legal and political environment is simply untenable. We're just not in a position to accept any additional risk in this homeowners' market."

Fernandez said the decision does not affect current policyholders in the state. He said the company is still assessing how many policies in Mississippi will be renewed this year.

As president of the Gulf Coast Business Council, Brian Sanderson has talked to a lot of people about State Farm's decision.

"It's gotten a lot busier in the past few hours after folks started hearing that announcement," says Sanderson. "So yeah, they're wanting to learn more about it."

He says there's no doubt their decision will slow the rebuilding process in South Mississippi. But he also suspects State Farm won't be gone for long.

"If we can get the lawsuits settled and if we can pass meaningful legislation, which we think will pass at the state level, we think that will start to create an environment that insurers are comfortable in writing," says Sanderson.

That's a sentiment shared by Gulfport insurance executive Tom Sawyer.

"If we get this wind pool act passed, State Farm will probably reassess the situation and come back," says Sawyer.

What both agree will likely bring State Farm back, and keep other insurers from leaving, is aggressive legislative action on the state and even federal level.

"State Farm probably threw gasoline on the Gene Taylor and Trent Lott effort to expand the federal flood act to cover wind and other perils," says Sawyer.

How far those legislative initiatives go, they say, will help reshape the insurance industry to the harsh new realities of the post Katrina insurance market here and across the nation.

"State Farm, while they're certainly the largest insurer, there are others out there," says Sanderson. "They have not made a similar decision and that again, brings us a level of hope."

State Farm's decision does not impact State Farm's financial services, banking products or automobile coverage in the state.

http://www.wlox.com/Global/story.asp?S=6086847



I say buh-bye! I sure wish they would have continued the probe into how they handle claims, like all their doctored engineering reports to deny claims. If they would have been brought to justice they would have gone bankrupt. Mississippi allowed them to save face and pull out. :roll:

FWIW, State Farm quit writing new business after Georges. :roll:
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#2 Postby Alladin » Wed Feb 14, 2007 11:51 pm

Unfortunately, when the major insurance company in the state ceases writing new policies, insurance rates will go up dramatically among the other companies and coverage will be reduced.
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#3 Postby Lindaloo » Thu Feb 15, 2007 8:15 am

Alladin wrote:Unfortunately, when the major insurance company in the state ceases writing new policies, insurance rates will go up dramatically among the other companies and coverage will be reduced.


They have done this before and rates did not go up. :roll:

If Florida's new law stands, Mississippi is going to follow. :wink:
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#4 Postby Lindaloo » Fri Feb 16, 2007 5:02 pm

Senator Patrick Leahy (D-Vt.), Chairman of the Judiciary Committee, joined with Senate Democratic and Republican leaders to introduce a bipartisan bill Thursday that would make insurance companies abide by the same anti-trust laws as every other industry.

Leahy introduced the Insurance Industry Competition Act, along with the panel's Ranking Member, Senator Arlen Specter (R-Pa.), Senate Majority Leader Harry Reid, (D-Nev.), and Senate Republican Whip Trent Lott, (R-Miss.). Companion, bipartisan legislation has also been introduced in the House by Reps. Peter DeFazio (D-Ore.), Gene Taylor (D-Miss.), Bobby Jindal (R-La.), Charlie Melancon (D-La.), Rodney Alexander (R-La.), and Walter Jones (R-N.C.).

For the last six decades, insurance companies have had immunity from federal anti-trust investigation and prosecution. The bill introduced Thursday would give the Department of Justice and the Federal Trade Commission the authority to apply antitrust laws to anti-competitive behavior by insurance companies.

The insurance industry and its practices have come under serious scrutiny along the Gulf Coast in the wake of Hurricanes Katrina and Rita, said Leahy. He has also raised concerns that insurers have been too often denying claims and delaying payouts to residents along the Gulf Coast.

"Federal oversight would provide confidence that the industry is not engaging in the most egregious forms of anticompetitive conduct - price fixing, agreements not to pay, and market allocations," said Leahy.

"Insurers may object to being subject to the same anti-trust laws as everyone else, but if they are operating in an honest and appropriate way, they should have nothing to fear. American consumers and American businesses rely on insurance - it is a vital part of our economy - and they have the right to be confident that the cost of their insurance, and the decisions by their insurance carriers about which claims will be paid, reflect competitive market conditions, not collusive behavior."

"It is my hope that this legislation will bring the benefits of competition to the insurance industry and to consumers. Too many consumers are paying too much for insurance due to the collusive atmosphere that exists in the insurance industry. This has become a particular problem along the Gulf Coast, where insurers have shared hurricane loss projections, which may result in double-digit premium increases for Gulf Coast homeowners," stated Specter.

"I strongly urge members who are concerned about industry exemption from the antitrust laws and collusive insurance industry practices to support this important piece of legislation."

Mississippi Senator Trent Lott said, "One thing I learned coming out of Katrina is that the insurance industry is not subject to antitrust laws. I've looked at the history, and there's no explanation for why that is - for why antitrust and price fixing in this industry are not covered by the federal government. Our legislation corrects this exception and applies antitrust restrictions to the insurance industry just as it is applied to most other corporations."

American consumers should be confident that the cost of their insurance reflects competitive market conditions, not collusive behavior, and they should benefit through lower prices, more choices, and better services," said Reid. "If insurers around the country are operating in an honest and appropriate way, they should not object to being answerable under the same federal antitrust laws as virtually all other businesses."


http://www.wlox.com/Global/story.asp?S=6095666
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#5 Postby Lindaloo » Fri Feb 16, 2007 5:03 pm

Attorney General Jim Hood wants State Farm to continue writing new homeowners and commercial property policies in Mississippi. Friday morning, he proposed legislation requiring the company to do so.

Hood is also asking Governor Haley Barbour and Insurance Commissioner George Dale to issue emergency executive orders requiring insurance companies to continue writing homeowners and commercial property insurance policies until the Legislature has had time to address the proposed amendment.

Hood said the proposed legislation was modeled after Florida legislation passed last month.

Hood's proposal would require insurance companies selling automobile insurance in Mississippi to also sell homeowners and commercial property insurance statewide, if they sell these policies in any other state.

"One of the main reasons I settled our state court litigation against State Farm was to keep them writing homeowners policies in Mississippi, to stabilize our insurance markets, and to help our Coastal residents and business rebuild," Hood said Friday.

"Mississippi should not allow State Farm to breach its promise and continue to profit from others in our state."

http://www.wlox.com/Global/story.asp?S=6099037


When are these fools going to understand that they were messing with the wrong state? :lol:

State Farm has been hiding from anti trust for way too long. It is now time to face the music. Their ways of denying claims is over.
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#6 Postby Dionne » Sun Feb 18, 2007 8:56 am

Lindaloo wrote:
Alladin wrote:Unfortunately, when the major insurance company in the state ceases writing new policies, insurance rates will go up dramatically among the other companies and coverage will be reduced.


They have done this before and rates did not go up. :roll:

If Florida's new law stands, Mississippi is going to follow. :wink:



Mississippi Farm Bureau quit writing and renewing policies in Copiah county (which happens to be the northern most declared disaster county).......they did it to us......and we did not file a claim for loss on two of the properties we have that they had insured for more than a decade. We are now with Mississippi Casualty......and our rates DOUBLED!!
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#7 Postby Lindaloo » Sun Feb 18, 2007 4:05 pm

I do know they have quit writing new business in Alabama in the northern portions of the state. FWIW, Farm Bureau has been known to drop you like a hot potato even if you have a theft claim. Lord forbid you have a fire and you lose everything. Farm Bureau automatically sends those type claims to SIU (special investigation unit) even though a fire marshall states it is electrical. You are then faced with a year or two with no means to live and actually no place to live. It is quite ridiculous and is part of the anti trust clause they hide behind. That is fixing to be over with. You are better off without Farm Bureau in your life Dionne. :wink: Your rates doubled with Casualty because that is a high risk writer also known as indemnity. There again, anti trust. Hang in there Dionne!

I know an agent in Alabama (Saraland) who can probably help you get an excellent rate here in MS. I have him on standby just in case MetLife non renews my wind policy. I cannot afford to go into the wind pool. State Farm renewed my parents insurance so I am praying there is some hope for me in that aspect.
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#8 Postby BC » Mon Feb 19, 2007 1:23 pm

Lindaloo,

Just thought I'd share my experience with MetLife's renewal for this year.. I had MetLife on my old house in Pass Christian before the storm.. I made a claim for Katrina and was only paid for a new roof, since they had engineer reports supporting their claim that water cause most of the damage (i.e. moved my house up the street)..

I stayed with MetLife after the storm, though, and the policy on my new house came up for renewal just recently.. I got the paperwork and started flipping through it, when to my surprise, my premium had actually GONE DOWN $100.. I knew something was up.. So I look at it a little closer and see that my hurricane deductible went from $1000 to $8245 (or 5% of the insured value of the home).. Apparently MetLife did this for every policy in the Southeast and along the East coast.. The strange thing is that there wasn't a letter detailing policy changes like there normally is.. I wonder if they were hoping to just slip it by me..

I was quite upset at the new deductible, seeing as I'd have to have some major structural damage to even make a claim for any hurricane damages.. So I called my agent (Greg English in OS) and got it all straightened out.. In the end, I bumped my deductibles up to $2500 across the board and it lowered my premium about $300 from the previous year's..

So, be prepared for a new 5% hurricane deductible (that can be bought back down though), unless that's what you already had..
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#9 Postby Lindaloo » Mon Feb 19, 2007 5:31 pm

Thanks for the heads up BC. I kinda figured they would get on board with the 5% deductible like all the others. They paid for my entire roof too and my deductible was $1,000 dollars. They actually cut that in half when they paid the claim. PLUS, the adjuster showed me the structural damage to my home from the water. If he had not shown me that I would have never seen that damage until later on when we started repairs.

In my particular case, the flooding damaged my home and I was fortunate that I was able to continue living in mine. Believe me, if that water would have risen another 2 inches, I would be singing a different tune. Truth be known, I have NO idea how it was even still standing because all the center blocks washed out from under it. There was a huge crater under there too. With the way the water went back out (like a raging river) it is a wonder it did not fall. It did move a little bit, but not enough to do any major structural damage. We had it leveled and squared AGAIN! When we did that is when it cracked the sheetrock. Boy was I mad. lol.

In the end though, it all comes down to the actual adjuster that comes out to your home. There are good ones and bad ones. The good ones know how to get you more money, the bad ones will pay just what they think you should get.
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#10 Postby sunny » Mon Feb 19, 2007 6:32 pm

I just received a notice of cancellation of my property insurance policy :grr: I WAS with AIG.
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#11 Postby Dionne » Tue Feb 20, 2007 7:12 am

lindaloo.....you are absolutely correct about the adjuster.....since Katrina we have worked on dozens of properties with storm damage. There just didn't seem to be an continuity with insurance payments. Some folks got more than they needed while others didn't even come close. As time proceeded I tried to be present when adjusters arrived, and it became very clear that the bottom line was that very adjuster doing the initial inspection. I'm not a big fan of insurance companies, so my opinions are biased. But when I see an adjuster that cannot get from the top of the ladder to the roof line on a simple 4/12 pitch, I have doubts about qualifications and experience. And at the same time, I saw adjusters that could tell you how many squares were on a roof from the ground simply by counting courses.

It's kind of like this new rash of housing inspectors that took a two week course, purchased a franchise and become immediate experts. I find that most people are trusting. If someone tells them they are an expert evaluating property, you assume them to be truthful. And possibly they think that they have become qualified in their own minds........but just look at some of the stuff they miss.

The most ridiculous thing I have seen yet are "experts" suggesting to cover over bad sheetrock with a new layer rather demo out the mold. For the life of me I cannot understand why people do not believe that the mold really is toxic. You tell people the molded rock and insulation has to go and they suspect rip off. Go figure?
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#12 Postby Aquawind » Tue Feb 20, 2007 7:49 am

The most ridiculous thing I have seen yet are "experts" suggesting to cover over bad sheetrock with a new layer rather demo out the mold. For the life of me I cannot understand why people do not believe that the mold really is toxic. You tell people the molded rock and insulation has to go and they suspect rip off. Go figure?


That will be a serious issure for the insurance industry if they are found responsible for the mold issues in years to come. Mold is some serious nasty stuff..
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#13 Postby stormcrow » Tue Feb 20, 2007 12:13 pm

Lots of interesting comments here, just a few thoughts.
After 04 and 05, there was a shortage of Adjusters, some of the people in the field were a disgrace. There is a limited supply of experienced adjusters willing to live in hotels for months, eating bad food and working 100 hour weeks.

Mold can be toxic, and peoples reactions vary, I have seen people living in houses that would have put me in hosiptal, and others screaming that they were dying when they had a small patch of mold under one foot on a wall (which they couldn't bring themselves to remove). If it has mold it must go! Cover it, thats just dumb. But to deal with mold you must remove the source of the moisture.

I have a hard time understanding how one state could force an industry to make bad business descions. If SF wants to leave, they will. And they might. I have felt for a long time that they have too large a share of the market.

This is all leading to a federal wind pool, it will come. Just for fun read some of the horror stories with NFIP claims (google). It is a lot tougher to sure the Feds then the insurers.
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#14 Postby Javlin » Tue Feb 20, 2007 12:39 pm

I just got my renewel from Liberty Mutual I was glad to see I was not dropped and thrown into the windpool.My policy deductible was still the 2% and went up $350,totally livable.I have to say they were so efficient and reasonable I would have to give a thumps up from my end.While I do not totally agree that the State should say "you have to do this"but I think it's within the States rights to say "you right all forms of policies or none at all".Does that make sense? :D

Life is one big risk everyday we wake up.Now if my job says I must cross this road with cars going 80mph 20x aday to get paid,I either do it or quit.I think the same thing basically applies when it comes to the State's rights,who works or who quits.The Insurance company can decide whether they want to work or not.
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#15 Postby vbhoutex » Tue Feb 20, 2007 3:13 pm

On the mold issue, we had a problem with mold. I called the insurance company-Amica- and told them. tehy sent out people to check it and next thing I know they are doing 30K+ of repairs on my home. None of us were ever sick from it nor did ask that they make the repairs(except for what was done to check the mold of course. They ended up gutting 3 rooms and new carpeting etc. in those rooms. Next thing I now they are cancelling me for "failure to pay premiums" which was a lie(crossed in the mail). Finally one of them admitted to me it was my loss history, which of course was mostly their doing!!!! :roll: :roll: :roll:
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#16 Postby MSRobi911 » Wed Feb 21, 2007 3:27 am

Ok is the preview thing not working? Dang it I had written a good reply and wanted to spell check it...now I don't won't to write it again....roflmao!

Maybe I will rant tomorrow!

Mary
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#17 Postby Lindaloo » Fri Mar 16, 2007 11:15 pm

BC wrote:Lindaloo,

Just thought I'd share my experience with MetLife's renewal for this year.. I had MetLife on my old house in Pass Christian before the storm.. I made a claim for Katrina and was only paid for a new roof, since they had engineer reports supporting their claim that water cause most of the damage (i.e. moved my house up the street)..

I stayed with MetLife after the storm, though, and the policy on my new house came up for renewal just recently.. I got the paperwork and started flipping through it, when to my surprise, my premium had actually GONE DOWN $100.. I knew something was up.. So I look at it a little closer and see that my hurricane deductible went from $1000 to $8245 (or 5% of the insured value of the home).. Apparently MetLife did this for every policy in the Southeast and along the East coast.. The strange thing is that there wasn't a letter detailing policy changes like there normally is.. I wonder if they were hoping to just slip it by me..

I was quite upset at the new deductible, seeing as I'd have to have some major structural damage to even make a claim for any hurricane damages.. So I called my agent (Greg English in OS) and got it all straightened out.. In the end, I bumped my deductibles up to $2500 across the board and it lowered my premium about $300 from the previous year's..

So, be prepared for a new 5% hurricane deductible (that can be bought back down though), unless that's what you already had..




Got my renewal letter today and you are right. They are increasing my deductible to 5%. I only have 30 days to buy it back or I will have to wait until my next year renewal. I am just thankful they are renewing my insurance. MetLife is expensive, but it is a darn good policy. I have not seen one any better.
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#18 Postby Ixolib » Sat Mar 17, 2007 10:42 am

Can y'all explain what you mean by "buy it back"? I havent's gotten my renewal from State Farm yet and I'm just trying to get a heads up on what to expect - you know, the "hidden" stuff...
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#19 Postby Lindaloo » Sat Mar 17, 2007 5:44 pm

I really can't explain how it works. I will be able to tell you on April 19th.
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#20 Postby stormcrow » Sun Mar 18, 2007 1:46 am

Buying back a deductible usually means paying additional premium to have a lower deductible then the standard offered.
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