From reading some of these it looks like extortion is OK if it’s done by the state. Isn’t making someone work for less than they want to the same as slavery? Is slavery legal if the workers are working for a corporation?
Extortion is, as you know, not OK. But you fail to realize no one is forcing people to live in high risk areas. If you choose to live in a high risk area you should be prepared to pay the cost. It appears that a number of people want to live in a high risk area, and want other people to foot the bill. I also have a problem with people who live in a flood plain, repeatedly get flooded out and rebuild in the same spot. I am OK with them living wherever they choose, but we need to limit the number of times they can collect from FEMA.
The people who live in the high risk areas need to accept the idea that we live in a free market economy. Live wherever you want, just be willing to pay for the costs associated with the area.
Your slavery analogy makes no sense. By your definition everyone is enslaved as NO ONE is making what they WANT. Everyone is making what the market will pay for their services. No more no less.
Some states, New Jersey for example, won’t allow a company to pull out of the state without an “exit strategy”. An exit strategy is a plan to continue to write the business on which you already are losing money. So even if you’ve decided to close your insurance operations and open a skating rink instead, you can’t.
Isn’t that corporate slavery?
Yes that is corporate slavery. This explains why so few carriers write business in New Jersey, why New Jersey consistently has some of the highest rates in the country, and why so few carriers view the state as an attractive state to operate.
States that overly regulate the insurance industry tend to chase away carriers and competition which in turn raises the prices. California is starting to rebound in spite of the knucklehead we have as an insurance commissioner. California is generally too large of a state to ignore (33 million residents), this is not true with New Jersey (8.4 million), and you are suffering because of the over regulation.
I’m also glad I’m not trying to do this wierd business in N.J. Texas is crazy enough, but we have a deal going with God to provide significant hail and tornados to keep the rates up.
Gallagher’s attempt to paint Allstate as afraid of a public hearing over their rate filing strikes me as more “campaign speeching”. I personally presume their decision to implement the rate increase under the “Use and File” provision has less to do with their fear of a public hearing, and more to do with their fear of losing even more money on inadequate rates while they wait for the lengthy filing process we face here in Florida. I’m not saying I’m AGAINST the filing process, but anyone who works with the system here knows it’s one of the slowest in the country; by the time you’ve managed to get one rate filing approved and implemented, your rates are already outdated. If it turns out they’ll have to revise their rates and refund some premium, I’m sure they’ve already planned for that scenario.
As for “pay for your own exposure”… unfortunately, every single high-risk property in Florida is automatically subsidized by every other Florida homeowner simply because of how the laws are set up. If their wind/hurricane coverage is covered by CPIC, the entire public picks up part of their claims via assessments made on their insurers (who then have to recoup by charging a little bit from each of their own policyholders). If they have coverage with a private company, their company’s premiums for the state-run catastrophe fund is often spread so that those in lower-risk areas are paying a bit more than their own share. Also, the OIR can choose to apply caps on how much higher the high-risk territories’ rates can be than other territories, forcing higher premiums to be charged in lower-risk areas just so the company can stay solvent.
If each homeowner in the high-risk areas of Florida had to pay the full, complete cost of their own insurance, we would have far less construction on the coasts and far better-preserved beaches. We’d also probably have cheaper premiums for the rest of us throughout the state.
You want to complain about the $2400 cost of insurance on your $200K house. Let’s do some math real quick…
When you add the coverage on your house ($200K) with the coverage on your contents (probably $120K), tack on the loss of use coverage (another $20K-$40K), you’re looking at over $340K in coverage. Assuming we give you credit for your 2% deductible after a loss, you’ve paid a grand total of $6400. That’s less than 2% of the value of your claim if you have a total loss…and we haven’t even begun to discuss the cost to provide the service you expect when you actually have a loss, or just want to question something.
At that rate, if you only have one claim every 50 years or so, the insurance company might break even on your risk. Now tell me, how many hurricanes have hit Florida in the past 50 years? What’s that? You mean we still haven’t considered the cost of all those OTHER things that can happen to your house? Pipes breaking, fires starting, darn thieves.
Oh, one more thing to consider. According to the courts, we now have to pay for things (i.e. flood damage) that were never covered under your policy and for which we (the big, bad, profit-seeking insurance companies) were never allowed to charge premium for.
your analyis is thoughtful and well reasoned. It’s unfortunate that the average florida resident can not read this or chooses not to understand this. It almost becomes a class warfare type issue when the people that tremendously benefit from subidized rates also appear to be the only ones that can get the media coverage.
It’s also obvious that the millions of people that live inland are unaware they help subsidize the “less fortunate” residents on the coastal wind zones.
It’s also unfortunate that the Insurance Industry leaders in Florida appear to have about as much backbone as the jellyfish that float around in the ocean. At some point, as an industry, you have to look in the mirror and realize that only the Insurance companies themselves can do anything about straightening out this mess. Most have cowered and abdicated this critical part of ensuring a fair and competitive marketplace. it’s just been easier to let the “sleeping dogs lie” than to work together on a fairer and more equitable system.
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legalized extortion.
I’m back…contact me. I think I may have a solution to your problem
From reading some of these it looks like extortion is OK if it’s done by the state. Isn’t making someone work for less than they want to the same as slavery? Is slavery legal if the workers are working for a corporation?
Extortion is, as you know, not OK. But you fail to realize no one is forcing people to live in high risk areas. If you choose to live in a high risk area you should be prepared to pay the cost. It appears that a number of people want to live in a high risk area, and want other people to foot the bill. I also have a problem with people who live in a flood plain, repeatedly get flooded out and rebuild in the same spot. I am OK with them living wherever they choose, but we need to limit the number of times they can collect from FEMA.
The people who live in the high risk areas need to accept the idea that we live in a free market economy. Live wherever you want, just be willing to pay for the costs associated with the area.
Your slavery analogy makes no sense. By your definition everyone is enslaved as NO ONE is making what they WANT. Everyone is making what the market will pay for their services. No more no less.
Alan.
Some states, New Jersey for example, won’t allow a company to pull out of the state without an “exit strategy”. An exit strategy is a plan to continue to write the business on which you already are losing money. So even if you’ve decided to close your insurance operations and open a skating rink instead, you can’t.
Isn’t that corporate slavery?
Yes that is corporate slavery. This explains why so few carriers write business in New Jersey, why New Jersey consistently has some of the highest rates in the country, and why so few carriers view the state as an attractive state to operate.
States that overly regulate the insurance industry tend to chase away carriers and competition which in turn raises the prices. California is starting to rebound in spite of the knucklehead we have as an insurance commissioner. California is generally too large of a state to ignore (33 million residents), this is not true with New Jersey (8.4 million), and you are suffering because of the over regulation.
Alan.
Subject line speaks for itself. I personally am not interested in subsidizing Florida. You play, you pay !
I’m also glad I’m not trying to do this wierd business in N.J. Texas is crazy enough, but we have a deal going with God to provide significant hail and tornados to keep the rates up.
Gallagher’s attempt to paint Allstate as afraid of a public hearing over their rate filing strikes me as more “campaign speeching”. I personally presume their decision to implement the rate increase under the “Use and File” provision has less to do with their fear of a public hearing, and more to do with their fear of losing even more money on inadequate rates while they wait for the lengthy filing process we face here in Florida. I’m not saying I’m AGAINST the filing process, but anyone who works with the system here knows it’s one of the slowest in the country; by the time you’ve managed to get one rate filing approved and implemented, your rates are already outdated. If it turns out they’ll have to revise their rates and refund some premium, I’m sure they’ve already planned for that scenario.
As for “pay for your own exposure”… unfortunately, every single high-risk property in Florida is automatically subsidized by every other Florida homeowner simply because of how the laws are set up. If their wind/hurricane coverage is covered by CPIC, the entire public picks up part of their claims via assessments made on their insurers (who then have to recoup by charging a little bit from each of their own policyholders). If they have coverage with a private company, their company’s premiums for the state-run catastrophe fund is often spread so that those in lower-risk areas are paying a bit more than their own share. Also, the OIR can choose to apply caps on how much higher the high-risk territories’ rates can be than other territories, forcing higher premiums to be charged in lower-risk areas just so the company can stay solvent.
If each homeowner in the high-risk areas of Florida had to pay the full, complete cost of their own insurance, we would have far less construction on the coasts and far better-preserved beaches. We’d also probably have cheaper premiums for the rest of us throughout the state.
Hey Legalized…
You want to complain about the $2400 cost of insurance on your $200K house. Let’s do some math real quick…
When you add the coverage on your house ($200K) with the coverage on your contents (probably $120K), tack on the loss of use coverage (another $20K-$40K), you’re looking at over $340K in coverage. Assuming we give you credit for your 2% deductible after a loss, you’ve paid a grand total of $6400. That’s less than 2% of the value of your claim if you have a total loss…and we haven’t even begun to discuss the cost to provide the service you expect when you actually have a loss, or just want to question something.
At that rate, if you only have one claim every 50 years or so, the insurance company might break even on your risk. Now tell me, how many hurricanes have hit Florida in the past 50 years? What’s that? You mean we still haven’t considered the cost of all those OTHER things that can happen to your house? Pipes breaking, fires starting, darn thieves.
Oh, one more thing to consider. According to the courts, we now have to pay for things (i.e. flood damage) that were never covered under your policy and for which we (the big, bad, profit-seeking insurance companies) were never allowed to charge premium for.
Yeah, cry me a river! Move if you don’t like it.
FPA,
your analyis is thoughtful and well reasoned. It’s unfortunate that the average florida resident can not read this or chooses not to understand this. It almost becomes a class warfare type issue when the people that tremendously benefit from subidized rates also appear to be the only ones that can get the media coverage.
It’s also obvious that the millions of people that live inland are unaware they help subsidize the “less fortunate” residents on the coastal wind zones.
It’s also unfortunate that the Insurance Industry leaders in Florida appear to have about as much backbone as the jellyfish that float around in the ocean. At some point, as an industry, you have to look in the mirror and realize that only the Insurance companies themselves can do anything about straightening out this mess. Most have cowered and abdicated this critical part of ensuring a fair and competitive marketplace. it’s just been easier to let the “sleeping dogs lie” than to work together on a fairer and more equitable system.