State Farm Storm Surge Settlement Could Scare Insurers from Mississippi Market

January 26, 2007

  • January 26, 2007 at 9:44 am
    Rhetoric onesided says:
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    The insurance industry keeps crying the rates are harmed by the uncertainity of the amount of claims they will have to pay. Lets turn that around and talk about the uncertainty in the local, each state and national economy when no one can be certain insurance companies will pay claims. This includes banks, mortgage companies, large and small business owners, homeowners, etc……. After the tornadoes in Oklahoma, the Northridge earthquake, Hurricane Katrina who can believe their insurance companies will live up to their obligations!!!!

  • January 26, 2007 at 10:17 am
    Mark says:
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    Insurance companies are just as obligated to deny claims when they\’re not covered as they are to pay them when they are. Why should they pay something that isn\’t covered? If I was an underwriter, I would make it a requirement that you buy flood insurance if you\’re in a hurricane zone. And flood insurance equal to your dwelling amount, which might just mean buying excess flood coverage just like the people should have done in the first place.

  • January 26, 2007 at 10:29 am
    MAC says:
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    WHY DON\’T WE JUST PUT A $75 CHARGE ON HOMEOWNERS NATIONWIDE FOR FLOOD AND $75 FOR QUAKE. IF YOU ARE IN A CERTAIN FLOOD ZONE THE RATES AND DEDUCTIBLE WOULD BE HIGHER. PASS THE PREMIUM & CLAIMS THRU TO FEDERAL FLOOD AND BE DONE WITH IT. WE WOULD GET A SPREAD OF THE RISK AND MORE PREMIUM. ALSO WHEN YOU HAVE A FLASH FLOOD IN KANSAS THE HOMEOWNER IS NOT RAISING HELL BECAUSE YOU PAID FOR THE WATER DAMAGE FROM A BROKEN PIPE BUT NOT FROM 4\” OF WATER COMING IN THE HOUSE.

    IF YOU ARE IN THE COASTAL AREAS MAKE THE COST BE AT LEAST $500 WITH A $5,000 DEDUCTIBLE FOR FLOOD. WE KEEP *****ING ABOUT POLICY LANGUAGE BUT WE HAVE TO REALIZE THAT THE COURTS AND AND THE PEOPLE THESE DAYS WANT EVERYTHING COVERED REGARDLESS.

  • January 26, 2007 at 10:58 am
    UW says:
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    MAC…I think I agree with you. Maybe not on making the charge the same for every area, but I think every homeowner should have to prove they have coverage for every peril. There would be a national flood, earthquake, wind policy system. People would put in based on their specific area, but every homeowner would have complete coverage and contribute to the fund. Let State Farm, Nationwide, Allstate, etc only cover the rest of the perils, and charge accordingly. It wouldn\’t be perfect, but at least we could cut down on these court cases, and people wouldn\’t be ruined when disaster hits.

  • January 26, 2007 at 11:21 am
    Read The Contract says:
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    I think all insurers should pull out of states that force them to abide by their contracts. Save insurance for states that allow insurers to deny wind claims as flood damage even when the water didn\’t reach the homes.

  • January 26, 2007 at 11:30 am
    Rhetoric onesided says:
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    The discussion needs to also include the claims that are valid, wind in hurricane where no storm surge, wind in tornadoes, etc. where homeowners still had to fight insurance companies to get them to live up to their obligations! I know I was one of them. Also, the lowballing of insurance companies.

  • January 26, 2007 at 11:31 am
    Outraged says:
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    The lawyers and Regulators just don\’t get it. Private capital will leave and I predict state farm as well as other natl carriers will leave the Miss coast completely uninsured and will end up just like Florida with a state run carrier with huge deficits and assessments. It will happen. If the courts continue to disregad the policy contract, then live with the consequences.

  • January 26, 2007 at 1:40 am
    Rates says:
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    The commissioner tried to get State Farm to promise this wouldn\’t go into future rates? That\’s just plain nuts.

    Assuming for the sake of argument that State Farm is paying claims that were covered, then those loss payments just go into the loss data base for Mississippi as part of the risk of doing business in that state. OF COURSE that will factor into future rate filings, because it now represents part of the base exposure.

    Everyone – including the insurance industry – has been grossly underestimating the financial impact of \”the big one\” – but now we know. Whether one lives in Florida with the extremely ill-advised new law, or in Mississippi where \”flood\” losses are now all of a sudden going to be covered, someone has to pay the price.

  • January 26, 2007 at 3:19 am
    Dr. Nick Riviera says:
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    State Farm should pull out of the state. If the state\’s courts do not want to honor contracts and contract law when it is not convenient for them then I say teach them a lesson and pull out of the state. I think in 20 years, the state will thank them because someone finally made them change their anti-business/stick-it-to-the-man attitudes. Here is a draft a the press release “We at State Farm regret to inform the citizens of Mississippi that we will no longer be writing property insurance in the state effective tomorrow. We will continue to pay policyholders owed in the recent settlement but will not be renewing any policies. The courts and political leaders in the state of Mississippi have made it difficult for us to run an efficient business in the state. We will continue to lobby with government leaders and search for ways to make positive changes so that we may return to the state in the future. Thank you.”

  • January 26, 2007 at 3:56 am
    Misty Meanor says:
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    Although I have been requested not to post anything anymore because I am not a bleeding heart compassionate, I have to agree with Dr. Riviera on his post. I hope most, if not all, insurance companies pull out of those states.



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