THANKS FOR THE INSURANCE BILLS, AL

Insurance jackals cash in on warmening hype:

Scientists haven’t reached a consensus about whether global warming makes hurricanes more frequent and fierce, but that hasn’t stopped the insurance industry from raising its defenses – and its rates.

Many coastal property owners in North Carolina have seen their insurance rates increase 25 percent since May …

“I know everybody on the coast is suffering from high insurance rates,” said William Baggett, an owner of the oceanfront Blockade Runner hotel in Wrightsville Beach. He said his rates have quadrupled since 2005. “I don’t think they are quite justified.”

Warm-mongers are inclined to use increased insurance rates as evidence of their belief system’s broad acceptance. They should remember two things:

• Insurance companies need little excuse to jack up rates.

• Property values are a more accurate guide to the threat of possible flooding.

Posted by Tim B. on 08/27/2007 at 10:20 AM
    1. On my list of Most Reprehensible, I put Insurance Salesman just behind Cannibals, but ahead of Lawyers (who are directly in front of Child Molesters).
      I just can’t see paying a couple of grand a month to have some maggot tell me my policy was cancelled after my house was leveled by a hurricane. Those guys will be shoveling coal in the furnaces of hell.
Posted by Texas Bob on 2007 08 27 at 10:42 AM • permalink

 

    1. TB
      Could be worse: there are tax attorneys who moonlight as roofers.Cheers

      Posted by J.M. Heinrichs on 2007 08 27 at 11:42 AM • permalink

 

    1. “I know everybody on the coast is suffering from high insurance rates,” said William Baggett, an owner of the oceanfront Blockade Runner hotel in Wrightsville Beach. He said his rates have quadrupled since 2005. “I don’t think they are quite justified.”

      Insurance premiums are based on risk. And if you insist on siting your business in a coastal location smack in the middle of a hurricane zone, your risk of hurricane damage is pretty damn high. You should be paying high premiums.

      If Mr. Baggett does not like this, perhaps he should consider building his hotel in a less stupid place. Just a thought.

      Posted by sundog on 2007 08 27 at 11:48 AM • permalink

 

    1. Insurance only works if.-

      A) you’re an insurance company
      b) you own shares in an insurance company
      c) you’re insured and are prepared to go to the wire on your claim.

      The spouse & I are b) and c) and recently took a major company to the courtroom steps over a single clause in his income insurance that was ironclad in our favour, but which the insurer had attempted to renege on through a series of devious manoeuvres.

      If you blink, you lose with insurers. They rely on 99% of people going away with a token settlement.

      Insurance is one of the ugliest industries for cheating people who hand over premiums in good faith, to receive little or nothing in return.

      We’re currently involved in a dispute with our insurer after the Newcastle floods, over the placement of roof flashing 10 years ago. The insurer doesn’t want to pay, and I’m not blinking.

      Back to the courtroom steps.

      Posted by mareeS on 2007 08 27 at 01:17 PM • permalink

 

    1. There are two kinds of housing that belong on the shore of the ocean: fortress, and beach shack. Hotels and condos with miles of plate glass, shopping malls, and 5 BR 5 1/2 BTH manors do not belong on the shores of the ocean. I like to call those structures “future coral reefs.”

      Posted by Andrea Harris, Administrator on 2007 08 27 at 01:19 PM • permalink

 

    1. That being said, when people hand over their hard-earned money for insurance, the company should be prepared to pay the way they said they would. Of course, they’ll try anything to wiggle out of paying. They count on people being too tired, busy, or poor to fight them.

      Posted by Andrea Harris, Administrator on 2007 08 27 at 01:23 PM • permalink

 

    1. PS: my previous comment wasn’t aimed at MareeS, but at people who build hotels, condos, and big fancy houses right smack on the beach and then complain that it’s more expensive to get insurance.

      Posted by Andrea Harris, Administrator on 2007 08 27 at 01:24 PM • permalink

 

    1. Texas Bob, where on your list would you put a child-molesting cannibal lawyer.  (Not that I necessarily know one, mind.  It’s just an innocent question.  No need to get all riled up.)

      Posted by JorgXMcKie on 2007 08 27 at 01:51 PM • permalink

 

    1. No offence taken, Andrea,

      We happen to live about 500m from the local beach, in a quite modest 1919 3b/r solid brick house, in an area that has only been settled since 1845 as a coal-mining community. The mining has gone and gentrification has happened with the types of beachfront housing you describe. Apart from normal weather patterns we get these east-coast lows every few years, like a fierce temperate zone cyclone, yet the insurance companies treat them as isolated events and an excuse to jack up premiums instead of factoring in a normal risk. People like us who have lived in durable houses for generations get slugged because upwardly mobile idiots build unsustainable houses in the most exposed positions. The view is everything, apparently.

      Posted by mareeS on 2007 08 27 at 01:55 PM • permalink

 

    1. In the United States since 1972, it has been illegal to build in high-risk flood zones.

      This law has been universally ignored, and the national government, in violation of its own laws, continues to write flood insurance for buildings in flood zones.

      The insurance premiums do not nearly cover the risks, and the flood insurance program is more than $22 billion under water (yuk, yuk).

      So, there is an outrageous story here, Tim, but you have it backward. And GW hype has nothing to do with it, since the losses have already occurred.

      Posted by Harry Eagar on 2007 08 27 at 02:50 PM • permalink

 

    1. I have no doubt most insurance companies will screw their policy-holders just for laughs, but mine isn’t like that.  (Hasn’t been for me, anyway, and I’ve never heard of them screwing anyone else, either.)  They’re fair, and they pay according to the policy, period – don’t pay extra, don’t screw you.  They’ve never jerked me around, either.  I’m damned grateful to have them.

      (They have members, not stockholders.  In bad years for our insurance area, rates may go up – they did for a while after back-to-back hurricanes – and in good years rates may go down and/or we get money back.  And they give great service.)

      We now return to our regular bash-the-insurance-company programming, since most of them deserve it.

      Posted by Barbara Skolaut on 2007 08 27 at 03:27 PM • permalink

 

    1. My wife and I had had our cars (and my one motorcycle)covered by State Farm insurance for the better part of 20 years.

      One evening, she and our son were returning from a visit to some friends barely outside of town one night, and a pair of motorcyclists coming the other way on a winding uphill stretch crossed over the line and nailed the drivers’ side of my ‘88 Nova (a Corolla with a different nametag).

      Messed up the left front and windshield of the car (the guy on the bike went over the car and slid up the road a ways on his leathers, just a few bruises). The final wrap up was that the guy on the bike was 100% at fault. (And his sister likely very annoyed, as his bike was insured under her name.)

      The claims adjuster totalled the Nova, we eventually got a small check, and applied it to my current elderly Ranger.

      State Farm then turned around and cancelled our insurance. All of it.

      And the nice, friendly agent we’d had for more than a decade refused to so much as answer the phone, to say nothing of speak to either of us face to face, to explain why.

      State Farm delenda est.

      Posted by steveH on 2007 08 27 at 04:03 PM • permalink

 

    1. I’m in a tussle with my insurance company right now.  Don’t get me started.

      Posted by RebeccaH on 2007 08 27 at 05:36 PM • permalink

 

    1. Insurance: The white man’s burden

      Posted by Pickles on 2007 08 27 at 05:38 PM • permalink

 

    1. Car insurance is a tax on the skilled, sober, attentive and responsible.

      Serves us right.

      Posted by Dave S. on 2007 08 27 at 05:43 PM • permalink

 

    1. #7 & 9
      Those that build on the beach and complain that in a storm surge their house is being washed away.

      Posted by kae on 2007 08 27 at 06:45 PM • permalink

 

    1. #12
      My brother’s fully comprehensive insurance didn’t help him when his car was side-swiped and almost cleaned up by a tow truck on the wrong side of a dirt road…
      They both had the same insurance company who went each of them for their excess. The towie was at fault.
      I don’t think he’s with that insurance company any more.

      Posted by kae on 2007 08 27 at 06:50 PM • permalink

 

    1. #12 – Notwithstanding the bad service you received, when a total loss occurs (ie. car is written off) the policy will usually cancel itself as part of the policy wording.  This because when you have a total loss, by definition, you no longer have an insurable interest.  With a partial loss, policies can get around the loss of insurable interest by having an automatic reinstatement clause to bring your sum insured up to it’s pre loss value.

      As for insurers in general, if you look at their loss ratios (claims paid over premium earned) you’ll see that they do in fact paid out the majority of (property at least) claims.  As a broker (agent) I see over 90% of the cliens my clients have get paid.

      I do appreciate the fact that many people within an insurer will either out of a desire to reduce claims, or just because they can’t be arsed (or aren’t competent), refuse or reduce a claim.  If a client has a legitimate claim, then their broker has a duty to go into bat for them.

      Personally, one of the best parts of my job is being able to get a proper settlement for a client by having a good old stoush with the claims department.  I do know, however, that many brokers cant be bothered to help out with claims, and this reflects poorly on the industry.

      I must agree that they AGW hype is being missused by people in the insurance industry.  In Australia, the CEO of our 2nd biggest insurer is a GW preacher.  There is no solid evidence that GW will affect premiums.  Yes, insurance claims have been rising…. but that’s because more property is now insured.  And the types of events insured are now broader than in the past. Insurers don’t really believed the rubbish on carbon and GW…. one would hope.

      Cheers,
      Steve

      Posted by fankytomato on 2007 08 27 at 08:35 PM • permalink

 

    1. Maybe Michael Moore can expose these sharks with a comparison to Cuba’s insurance industry.

      Posted by Infidel Tiger on 2007 08 27 at 08:35 PM • permalink

 

    1. Re #10, Harry, that’s only partially correct.

      The national flood insurance program is based upon a local government adopting ordninances that meet the flood program standards.  Those standards, frankly, are very loose.  Once in place, the local government (a city or county, more often than not) has to manage the development through those ordinances.  Current home owners are encouraged to buy flood insurance; new owners are usually required by their lenders to buy it.

      However, it is legal to build in a flood plain, if certain conditions are met.  For example, if the first floor elevation is 1 foot above the so-called 100 year flood plain.  So there is a lot of development where the homes are elevated to this level, but the streets are not.  This makes for a lot of isolated homes during floods, with their utilities shut off for the duration.

      What is inflexible is that there can be no construction in the floodway.  The floodway and the flood plain are separate but related features of a river.

      FEMA sometimes followed up on those ordinances.  Sometimes they didn’t.  I’ve seen it both ways, depending on which direction the political winds were blowing.  Sometimes the ordinances were enforced with a wink and nudge.  Frankly, the tax base of a lot of communities were at stake:  build more houses, property values go up, people move in, spend money, pay taxes, the economy improves.  Hey, Uncle Sugar will bail us out if it floods!  So a lot of the construction has questionable protection designed in.

      The result is pretty much what you point out.  Worse, the flood insurance policies don’t always cover all of the damages.  Often, the home owners get to eat the costs, but that’s more a problem of their not understanding the policies.

      Right now, FEMA is trying to update their flood plain maps, many of which are hideously outdated.  I think this started pre-Katrina, but has been accelerated post-Katrina.  It’s akin to closing the barn door after the horse drowned, but it is a necessary action.

      I agree with your assessment that Uncle Sugar underwriting flood insurance policies has led to this.  I also would point out that flood recovery often encourages people to rebuild exactly where they flooded.  Sometimes FEMA can leverage a buyout program, sometimes not….that turns homes into parks, with a substantially lower tax base.  It’s not very popular in some places, but whole towns have been moved; anyone declining the chance is generally denied aid in the next flood.  That has happened, but rarely.

      As for the rest….

      I sympathize with the home owners stiffed by their insurers.  But they are building in a known hazard zone, and I am tired of tax dollars rebuilding structures in questionable locations.  Want a home there?  Assume the risk, please.  I think this should be true of people in flood plains as well.

      (BTW, I was raised on the beaches of Puget Sound, and have experienced more than one nasty storm tearing apart houses.  So I am familiar with the problem on a personal basis.  I would also LOVE to live on a beach.  Alas, I can’t afford it.)

      Posted by The_Real_JeffS on 2007 08 27 at 09:40 PM • permalink

 

    1. By the by, insurance companies are in business to make money.  So Tim hits the nail with “Insurance companies need little excuse to jack up rates.”

      I have no qualms with them making money.  But if they start eating their own customers, that’s not business, that’s suicide.  A good insurance company ought to see policy holders as an asset, not liability.

      Posted by The_Real_JeffS on 2007 08 27 at 09:43 PM • permalink

 

    1. #18;

      …when you have a total loss, by definition, you no longer have an insurable interest.

      I suppose that must explain why the agent in question cancelled coverage on *all* our vehicles at that time.

      Posted by steveH on 2007 08 27 at 10:27 PM • permalink

 

    1. “I suppose that must explain why the agent in question cancelled coverage on *all* our vehicles at that time.”

      No, that’s just a p-ss poor insurance agent.  From what you describe the event would result in full recovery from the third party.  It shouldn’t (the agent should work to ensuring it doesn’t) raise your renewal premium.

      Posted by fankytomato on 2007 08 27 at 11:06 PM • permalink

 

    1. Of course people making claims against Insurance companies are always perfectly honest and never overstate their claims.

      I’ve worked in insurance claims for a long time, and whenever I see Insurers trying to bully people out of legitimate claims it just makes me shake my head. The simple fact is that the longer a claim drags on the more expensive it becomes. There are much better ways of managing your risk than by bullyragging people. Then you have the additional on-costs of maintaining a reserve and a prudential margin.

      95% of the time the cheapest way for an insurance company to get out of a claim is to pay it out fairly and promptly. The trick is working out with 95% you pay promptly and which 5% you go into trench warfare over.

      Posted by jpaulg on 2007 08 28 at 12:25 AM • permalink

 

    1. Sometimes insurance companies do decide to steal from clients by reneging on obligations, and for the life of me I don’t understand why there are not laws to hold the individual decision makers at those companies accountable as the felons they are: arrested them, convict them, and thrown em in jail for theft.

      Of course if you did that you’d have to start by imprisoning most of the Social Security Administration.

      Posted by Shaky Barnes on 2007 08 29 at 12:55 AM • permalink

 

  1. I suppose that must explain why the agent in question canceled coverage on *all* our vehicles at that time.

    It wasn’t the agent—he’s a salesman. He didn’t cancel your policies, he wouldn’t have the power and he’d certainly not have the incentive to do that. That would’ve been a corporate decision, completely beyond his control.

    As for why he ignored you, maybe he just had no human interest in someone who was no longer a paying client—but it’s also possible he was embarrassed at having let you down and was ashamed to face you.

    Not to get all touchy-feely, but having been an insurance agent in the past, I can think of a few sympathetic scenarios.

    Posted by Shaky Barnes on 2007 08 29 at 01:13 AM • permalink