OT: Homeowners Ins.

[clare]

The "pool" has absorbed some real big hits - floods, hurricains, wildfires etc - the price is going up EVERYWHERE - and 8.5% is on the low side.

[clare]

And the banks are totally UNREGULATED, which is where the avalanche started.

[JoeSpareBedroom]

Examples, please.

[mm]

There is additinal regulation of the bansk in the new law.

[Wilfred Xavier Pickles]

"... The group's main business is State Farm Mutual Automobile Insurance Company, a mutual insurance firm that also owns the other State Farm companies. ..."

" ... A Mutual insurance company is an insurance company which has no shareholders but instead is owned entirely by its policyholders ..."

I doubt the pols have that much to do with it.

The Midwest US hasn't seen unusual HO claims in recent times.

Ceteris paribus, next years expectation is more-or-less this years outlays.

You mean the state commishes? In MO, they are lock-stock-and-barrel in the hip pockets of the ins. co's, to my knowledge.

There's no mortgage/lender. Request for quotes with larger deductable is in the hands of the SF agent. Presumably he'll get back to me.

Thanks for numerous helpful responses.

Will

[Nonnymus]

Very true. In the case of a Mutual, profit (such as premium + investment income > outlay + fixed costs + variable costs) equates to reduced premiums. . . in theory at least. We won't go into reserves.

I wonder if there's any premium loading because of New Madrid?

I had a classmate who worked for the Commish years back. What part of MO are you from? Another of my classmates is in the process of helping Ike Skelton to join the unemployed.

Nonny

[Kurt Ullman]

A few years ago some academic type got it into his head that the New Madrid was primed to go. Most of the newies at the time reminded people that earthquake coverage is specifically excluded from every insurance contract.

So, I would guess no.

[K]

Yes YES. We've had our policy with Allstate since 1982, and our new premium bill represents a 56% increase! I'm not even going to call them. I got a quote from Hartford Fire for $300 less than last year.

Never a claim in all those years, so I don't know what's going on - a penalty for sticking with one company?

Keith

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[JoeSpareBedroom]

I wonder if this academic was related to the suits who concocted the domino theory. I mean, you've got to publish SOMETHING in academia or your funding goes up in smoke.

[clare]

Too bad it wasn't there years ago - the whole world financial situation would be a lot better for it. Notice the well-regulated Canadian banking system weathered the storm intact with no "government interventuion" or "taxpayer bailout"

[Wilfred Xavier Pickles]

Earthquake is an add-on here. I don't carry it.

No significant activity from New Madrid fault since 1895.

I've been in St. Louis 30+ years. Skelton runs too much of the -other- end of the state.

Will

[Robert Green]

Who says floods shouldn't be covered? A lot of people I know are surprised to find out what total coverage *doesn't* cover in a claim. Over the years, more and more events, conditions, and exclusions are added to homeowner's policies to the point that you really don't know what you're buying unless you're an insurance agent or attorney. You'll never hear the words "co-insurance" or "subrogation" until you file a big enough claim for a bona-fide covered event.

Once. Maybe. More like "Once Upon A Time." The insurers have pooled their claimant info so they can refuse to sell to anyone who has had a suspicious fire. Or even an unsuspicious one. Arson investigators are also dramatically better than they used to be, and have some pretty serious tools in their detection arsenal. My broker is an old high school buddy and one day, saw a can of turpentine in the basement. He looked at me and said "is having that can in here and not in the shed worth going through an arson investigation if there's ever a fire?" That's where the can's been ever since. The shed. However, as good as arson investigation is, there are cases where many believe innocent people have been executed over poorly interpreted fire scenes:

" . . . the Innocence Project's scientific report, headed by nationally recognized arson expert John J. Lentini, asserts that both the Willis and Willingham fires were accidental, not the product of arson. "Fire investigators in general didn't know what they were talking about, but the state of Texas did know in 2004 that the evidence used to convict them was B.S. - bad science," Lentini said at a Capitol news conference announcing the study which asserts "each and every" indicator of arson cited in the two cases has been proven to be invalid."

I believe they are referring to pools of hydrocarbon-based material investigators said was accelerant but was really material that condensed out of a burning cloud of plastic fumes. Lots of arson investigation "rules" were laid down when everything was made out of cotton and wood, not plastic and "wood-like" substances. More recent tests show that what were previously thought to be accelerant indicators are actually by-products of a fire in a modern home furnished largely with man-made materials.

While I agree that many IC's are tools, I thought most insurance commissioners were appointees, not elected officials:

Not that it matters much. Companies fare pretty much the same under either type of IC, they say.

That's because you didn't send it around to the newspapers and TV stations around the area who would love to do a story about how "State FARM" sure doesn't mean a farm in the state of Maryland. In this age where Lindsay Lohan's DUI makes the front page, a story like that has a shot at the title. I wonder why the change, though. Usually, when an insurer exits a line of business, they've got a government regulation all lined up as the fall guy.

Eventually, redlining certain states or areas will end in all insurers being regulated at the Federal level, something many businesses (except insurers) seem keen on so they have only one set of laws/regulators to deal with, not

1. That's why we have Senators. If enough insurers pull out of enough states enough times, the axe will fall. Sadly, it will be the only way to fairly share the risks living in each of the 50 states among everyone. Is it fair? Should hurricane belt dwellers pay more? What about quake-vulnerable California?

Insurers, left on their own, would only insurer people who never make claims or got sick. I think they like the state-by-state patchwork regulation system just fine. It's there just in case the policy itself wasn't confusing enough. (-: I'm of the mind that they can fool state commissioners on a one-off basis more easily than a qualified federal administrator.

Apparently some insurers almost got away with pulling the wool over the California IC's eyes. The rollback of health insurance rates came from a threat of a federal probe into the rate hikes, some as high as 39%. What balls. What, in the health care industry, has gone up so much in one year that they needed a hike that high to cover it? They f_(ked up. The hike didn't even past the smell test.

It will take an enormous, multi-state disaster affecting rich folks with clout to get the change from state to federal regulation of the insurance industry, but it's coming. AIG got the ball rolling with trying to insured CDO's and getting FUTA. A Cat 5 hurricane that hits a place where rich, politically active people lived finish the job as they were flooding by claims that could easily top any other natural disaster in the world

They estimate it's possible for the industry to face $100 billon in claims. It's going to happen just based on the law of probability. Anywhere on the US east coast and the entire Gulf coast comprise the targets, so it's really just a matter of time. Don't worry, though. Bill Gates is coming to the hurricane threat rescue:

As for California, health insurers demanded a big fat premium raise based on doublecounting and other faulty math techniques. Makes you wonder how many don't get caught at jiggering the numbers . . .

-- Bobby G.