Insurers Balk as House Panel Votes to Add Wind Coverage to Flood Program

July 27, 2007

  • July 27, 2007 at 7:07 am
    Kathy says:
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    I don’t know about other states, but Florida has the strictest building codes with the exception on the Panhandle.

    As for flood…it happens in many states and in areas that are not know for flooding. Do you read the paper?

    Please tell me where to live that there is no flooding, hurricanes, tornadoes, earthquakes, fires, or other catastrophic events? Please where?

    Time Magazine reported: June 4th 2007…153 million people live within 50 miles of the coastline, this is more than “half” of the US population

  • July 27, 2007 at 7:08 am
    Kathy says:
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    Time Magazine reported: June 4th 2007…153 million people live within 50 miles of the coastline, this is more than “half” of the US population

  • July 27, 2007 at 7:10 am
    NOT AN AGENT! says:
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    If the “private” industry would stop raping people then government would not have to step in.

  • July 27, 2007 at 7:11 am
    NOT AN AGENT! says:
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    THANK YOU!

  • July 27, 2007 at 8:04 am
    memo from turner says:
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    “If the “private” industry would stop raping people then government would not have to step in.”

    You’re right in putting quotation marks around private. Many industries that present themselves as “free market” receive massive subsidies from government. But in order to do that, the industry must first meet several key requirements: they must be large; they must have sufficient cash reserves to bribe government, they must be able to spread their propaganda throughout the mainstream media, and they must be good politicians themselves.

    Now, the thing to consider is if government stopped raping people then…well, then all sorts of terrible things would happen (that prior remark is made sarcastically): like, people would have more money to spend on themselves and their families; people would stop getting thrown in jail and gang raped for “crimes” in which there is no one at all who is damaged or suffers loss; we wouldn’t be forced to bear a CIA and other “intelligence” agencies giving drugs to unwilling subjects and killing people at random (that CIA is a fun loving bunch; google “The CIA’s La Dolce Vita Lew Rockwell” (no quotation marks) for a minor tip of the iceberg on this); and we wouldn’t have FBI agents/murderers who shoot teenage boys in the back while they’re running away. All of the foregoing is made up of course, I know that government has never done anything wrong and indeed is incapable of doing wrong.

  • July 27, 2007 at 8:06 am
    Nobody Important says:
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    Gil, I suggest you sign off this line. This is the nutter forum. Jane, you are proof that a CPCU is not a guarantee of logical thought. Government does nothing more efficiently than private enterprise except spend enormous amounts of money not earned by themselves. Don’t correct the problem, just kill the industry. Makes sense to me.

  • July 27, 2007 at 8:22 am
    Nobody Important says:
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    Unbelievable. You are a paranoid and crazy as anyone I have ever seen on this site. I’m sorry for you and all the others like you who find life in this country so awful. I can’t begin to imagine what could happen to a person to make them as sad and pitiful as you are in this post. Get some help, really.

  • July 27, 2007 at 8:25 am
    Nobody Important says:
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    Great Jane, we will have a fully funded program for all disasters, just like Social Security. Sure, I buy that.

  • July 27, 2007 at 8:37 am
    Nobody Important says:
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    How about we allow insurance companies to charge sound rates based on statistically provable classes of business? Allow legal contracts to mean what is written on paper rather than in the fevered imagination of trial attorneys and nut cases like NOT AN AGENT. BY THE WAY NOT AN AGENT, IF YOU SHOUT ALL THE TIME NOBODY HEARS OR CARES WHAT YOU SAY. TRY A LINE OF ACTUAL REASON RATHER THAN INSULTS. YOU MIGHT JUST GET SOMEWHERE WITH YOUR LINE OF THINKING, IF YOU ACTUALLY DO ANY. JUST A THOUGHT. Maybe sound rates based on actual probabilities are to difficult to understand, but I think it could be explained. Stop the presses. Revolutionary.

  • July 27, 2007 at 9:08 am
    NOT AN AGENT! says:
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    Yes sound rates would be good however YOUR industry is all about making your CEO’s Billionaires not giving sound rates…get real! The reason you don’t like what I have to say is I speak for many people, just not the insurance industry and you only get so angry at me because you know I speak the truth…sorry but the truth hurts doesn’t it Mr. Nobody.

  • July 27, 2007 at 1:05 am
    Jane Logan, CPCU says:
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    This will teach primary and reinsurance carriers to gouge consumers with HUGE premiums with HUGE deductibles. Congratulations boys I believe you’ve finally managed to kill the golden goose. I’d like the insurance industry to tell me where on earth there is no wind exposure where the citizens will be subsidizing those of us who live in Hurricane or Tornado county. CA has wildfire exposure – tell me no one in less fire prone areas is subsizing fire rates… The only way to solve the wind insurance crisis is to take the private market out of the equation just like Flood insurance. We need a government controlled wind program and Federal Regulation of the insurance industry and the industry has no one to blame but themselves-this has been brought on by price gouging and years of abuse of State regulation.

  • July 27, 2007 at 1:09 am
    Observer says:
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    Following Hurricane Floyd, I read articles saying that insurance companies directed claims to NFIP and did not accept any portion of the damage as wind coverage which they were providing.
    I wonder what portion of the $17.5 B this represents.
    This may have prompted the decision to add wind to NFIP.

  • July 27, 2007 at 1:16 am
    Jane Logan, CPCU says:
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    I completely forgot about carriers doing everything in their power to get out of paying claims through “concurrent cause” clauses. As usual the carriers want it both ways, they want to collect premium and not pay claims. Combining wind and flood would stop all the concurrent cause clause nonsense as well. Again, the industry brought all this on themselves.

  • July 27, 2007 at 1:21 am
    Peter Polstein says:
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    Come on Logan, you’ve got a Senator who is pissed off at the insurance industry and has sued his insurer, the rip off is a fantasy. You want Governmental intervention in the industry, wonderful, it’s just what we need the Government running the industry that will certainly kill the Golden Goose..What Golden Goose. Hell just let them go back and underwrite the old limited homeowners form, Fire, EC, V&MM, Wind and Flood, that ought to be an interesting pricing model. Who the hell’s going to pay for that deal.

    Problem is the insurance industry reminds me of a bunch of little boys who think they’re adults, but can’t quite figure out how to get there.

  • July 27, 2007 at 1:23 am
    buzzard says:
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    This will be another Government giveaway.
    Is Socialism the next step in America. Elsewhere in the world (except Cuba and Zimbawe-spelling?,& Venzuela) they have been fleeing Socialism, the land of freedom and opportunity wants to embrace it?

  • July 27, 2007 at 1:31 am
    Jack says:
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    There are more parts of this country that have 60 plus mile per hour winds than on the Coast. Lots of damage is caused in the West and central U. S. by high winds. It is just that on the Coast, they give those winds a name and more attention. On the Coast the congress can give away lots of money to those that are uninsured and get lots of votes.
    Put wind and even earthquake damage in the FEMA policies. We are already paying for the damage anyway.

  • July 27, 2007 at 1:42 am
    Mark says:
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    Not again…

    Please, oh please, SPQA, just say NO to subsidizing coastal development.

  • July 27, 2007 at 1:52 am
    Artie says:
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    Instead of throwing billions of dollars at the symptoms of the problem, why don’t we address the root cause? What a novel idea. Perhaps changing the building codes in areas prone to windstorms would prevent a lot of losses and claims so the rates wouldn’t be impacted. But, the greedy consumer doesn’t want to have to pay the extra construction costs because his rich uncle (Sam) will bail him out.

    As for flood coverage, why would anyone in their right mind put a home in a flood zone. That’s not a risk of loss, it’s a probability with the only variable being when.

    And just for the record, I don’t want to pay more to subsidize those who choose to live in those areas. Even cavemen didn’t live where it floods. Kind of common sense thing.

  • July 27, 2007 at 2:06 am
    Broker says:
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    Maybe I’m stating the obvious to anyone who underwrites / rates property; however, I believe this would work if the flood and wind rates were tiered / weighted based on location, exposure, construction, and the usual wind / flood underwriting criteria. It would not be fair to apply the same rating methodology that is in place now for flood alone, i.e., pre-firm, post-firm, zone, etc, regardless of location. The flood zone has little bearing on the wind exposure, so the underwriting would need to be revamped.

  • July 27, 2007 at 2:13 am
    Gill Fin says:
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    a caveman can do it? I am a big picture guy, and I know that every time we choose to relinquish rights to the government two things happen – it ends up costing a lot more to end up with a worse product and/or service. We have gone so far down the path toward socialism in this great country that posters here seem to forget that we, they, pay for all these great government programs. The closest thing to immortality is a government program, and once out of the bag it cannot die, no matter how poorly thought out. We are a country of self serving special interest groups who have learned that the payers, us, are asleep at the wheel. Jane, if you can afford another government program, which like all other government programs will have zero competition and therefore no reason to operate effeciently or profitably, I want to party with you. You are obviously rich.

  • July 27, 2007 at 2:15 am
    lord of darkness says:
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    Yes, it’s frightening how many people believe (with religious fervor even) how if “we just write more laws and give even more power to the government” we can solve every problem known (and even those not yet known) to mankind.

    The level of economic illiteracy is astounding. There’s no such thing as “the government pays for…” it’s the people from whom the government extorts money that pay for whatever grand and noble service the government is so generously offering.

    Here’s the world’s shortest political quiz: should any service be provided at the barrel of a gun? That is, should anyone be forced (by violence or the threat of same)to pay for something they don’t want? Those who answer “yes” are psychopaths and there’s no rational way to deal with them (and incidentally are the ones in favor of government).

  • July 27, 2007 at 2:17 am
    Jane Logan says:
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    It is my understanding that FL did change their building codes but they still building giant building on the waterfront that are no more than huge inflexible sails to catch the wind. MA has always had a good building and code and even our code was changed this year for all homes within 1 mile of the coast. Intereting point, the building codes changed which meand dwelling replacement cost estiamtes will increase, therefor wind % deductible will increase – all without automatice coverage for Building Ordinance Increased Cost of Construction. Once again the industry will collect scillions of dollars through increased RC of dwellings based on new building codes without providing coverage. When I confront Jack Golumbeski of the MA Fair Plan about this issue in private at the rate increase hearings and in public at a form on the HO insurance crisis on Cape Cod & Island he inferred to the audience that buiding code changes only matter when you elect to renovate the dwelling. What a lying sleaze ball. I don’t know how Jack lives with himself or sleeps at night.

  • July 27, 2007 at 2:18 am
    Wags says:
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    Finally – someone makes sense!!! Who are the states/people whining about the coverage issues and pricing? Those that are coastal and can’t/don’t control the development and population concentrations in the disaster-prone areas. How many wind insurance crises from western and central states have made national headlines???

  • July 27, 2007 at 2:20 am
    Jane Logan says:
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    Please excuse my typos!

  • July 27, 2007 at 2:21 am
    cat ouf of the bag says:
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    “Jane, if you can afford another government program, which like all other government programs will have zero competition and therefore no reason to operate effeciently or profitably, I want to party with you. You are obviously rich.”

    Yes, there’s nothing easier than spending other people’s money. You see, the state regards everything and everyone as its property-and that’s no joke. There was some Senate resolution made in 1933 that stated just that. That’s why the state loves it when millions die in war for the sacrifice of “our country.” I disagree with those posters who wrote that government botches everything it touches; they do two things extremely well-1)waste other people’s wealth; and 2)kill millions of people with precise efficiency.

  • July 27, 2007 at 2:25 am
    houses of the holy says:
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    “I don’t know how Jack lives with himself or sleeps at night.” I’ll tell you how-because he’s a politician/government bureaucrat; by now, he’s long since mastered the art of cognitive dissonance and doesn’t care what kind of destruction and suffering he causes, as long as he gets his salary, perks, and pension.

  • July 27, 2007 at 2:30 am
    Jane Logan says:
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    The insured’s would pay premiums – the only difference is the premium would stay here in this country instead of a some Reinsurance carrier’s Bermuda or Swiss bank account. The money would actually be there when a disaster strikes instead of being in some reinsurance company CEO’s bonus package… Would it surprise anyone if the reinsurance industry imploded after a large event leaving no one with coverage and the government picking up the tab anyway? Again, at least with govenment MANAGED program the cash stays in the States.

  • July 27, 2007 at 2:32 am
    Jane Logan says:
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    You are absolutely right about Jack Golumbeski of the MA Fair Plan.

  • July 27, 2007 at 2:43 am
    Gill Fin says:
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    We don’t really want to pay people to live in areas where it not safe to live, do we? We always talk about property on this website, but many times these enabling policies and practices end up costing lives because of bad ideas like subsidizing housing in Hurricane alley.

  • July 27, 2007 at 2:56 am
    Jane Logan says:
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    I live near-not on the Coast. I’m a 12th generation Cape Codder and if you’re suggesting I move to a safer place, name one place on this earth that does not have a natural or man-made CAT exposure.

  • July 27, 2007 at 3:10 am
    Gill Fin says:
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    I am not suggesting anyone move. Why are others suggesting I subsidize where they choose to live? I’ll pay for where I live without asking anyone else to pay for it, and where I live we have earthquakes. I buy earthquake insurance and fully expect to need it one day. How
    do you feel about the idea that I require Cape Codders to subsidize my existence in an earthquake zone?

  • July 27, 2007 at 3:16 am
    Tinkerbell says:
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    Why not add flood coverage to every home policy in the nation? This would increase the cost of the policy by about $50+-/year and there would be no wind vs water debate at time of loss. A loss caused by wind or water would be covered without entering into lawsuits. It seems logical to have the same carrier providing both coverages.

    Tell me why not?

  • July 27, 2007 at 3:19 am
    Jane Logan says:
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    Fine-the coast can subsidize earthquake victims and earthquake territory can subsidize hurricane and tornado victims. We’d be way ahead of the game instead of sending all our $$ out of the country and out of our reach when disaster strikes.

  • July 27, 2007 at 3:55 am
    Lumpit says:
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    Tinkerbell, So you want me to pay $50 for flood insurance even if it would take a Noah flood to reach my house… Why don’t we all just throw in a about $1000 per $100,000 of value into an insurance pool and forget about any exclusions?

  • July 27, 2007 at 4:00 am
    Jane Logan says:
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    Lumpit-so you’re saying you live someplace where there is no CAT loss exposure from ANY peril?!

  • July 27, 2007 at 4:17 am
    Realist says:
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    Tinkerbell, you are on the right track, but your plan will fall short. The flood premium part of the homeowners can not be uniform because the exposure is far from uniform in various states. But that is not even the biggest problem. The flood part of the homeowners coverage that you propose would almost certainly have to be reinsured by the Federal government. In other words, you would still ultimately have two payers (one for the wind and the other one, the Feds, for the flood). We would not solve the problem of the wind vs flood argument. The provision in H.R. 3121 that came out of the House Committee both relieves the capacity crisis and at the same time resolves the coverage definition agrument.

    One more thing: the insurance companies that are now whining about the Feds getting into the wind coverage business have forfeited their right to make this decision, when they decided to withdraw their own windstorm offering from the coastal states. Almost all of them are no longer true market participants.

  • July 27, 2007 at 4:23 am
    Lumpit says:
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    Nope, I didn’t say that. I know you are a CPCU so maybe if state it differently you can understand.

    Why should a person that does not live in an area that can flood pay $50 for a national flood coverage? If everyone should contribute to a national flood plan then why not expand that to all perils?

  • July 27, 2007 at 4:29 am
    DG says:
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    I find it funny that people are always whining about “subsidizing” other parts of the country…

    “why should I pay for you to live on the coast?? WAN WAN WAN!!!!!!

    Tax money goes all over the country and the world, for that matter. Many states pay in less money than they receive from the federal government, and that money goes for all sorts of things. All of you are subsidizing all sorts of programs you may think are wastes of money or are just simply wrong.

    You may be a pro-life person, but you are subsidizing clinics that perform abortions. You may never eat fruits or vegtables, but you are subsidizing farmers. You may live in FL, but be subsidizing highway construction in WY that you’ll never see or drive on. I don’t see why helping people in CAT areas (not just the coast) is any different.

  • July 27, 2007 at 4:37 am
    Jane Logan says:
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    Lumpit, either you can’t read or you’re just avoiding the question – what is the natural disaster threat to your area? Maybe the Flood Plan should be changed to CAT Plan and again for the slow learners, each area would reciprocate CAT loss subsidies and my guess is it would all even out in the long run which is was insurance is all about – the long term big picture.

  • July 27, 2007 at 5:17 am
    Thank God! says:
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    Thank God someone is trying to look out for the little people!!Won’t this rattle you insurers! Then you would have little to no reason to raise our rates 500%!!!!!!!!!!!!!!!!

    GO HOUSE GO!!!GO HOUSE GO!!!

  • July 27, 2007 at 5:19 am
    Kathy says:
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    YOU GO GIRL!!!!

  • July 27, 2007 at 5:20 am
    Kathy says:
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    Another good reason to add this to Flood!!!

  • July 27, 2007 at 5:22 am
    NOT AN AGENT! says:
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    THIS IS NOT SOCIALISM, IT’S CALLED SPREADING THE RISK!!! REMEMBER THAT WAS WHAT YOU BUTTHEADS WERE SUPPOSED TO BE DOING BUT INSTEAD KEEP RIPPING PEOPLE OFF!!

  • July 27, 2007 at 5:39 am
    Gill Fin says:
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    Not socialism? How would you better describe it if you are taking it away from private enterprise FOREVER and giving more money and power to government?
    Amazing to me how many would just roll over and cede more of their money and power to government. Haven’t the last 16 years demonstrated to even the most thickheaded commie that more government, in any form for any reason, is bad? Is it lost on you all that we could eliminate 75% of government and the only ones who would suffer are the bloated government workers incapable of holding a private sector job. More government bad, less government good. We are free in America, but slowly giving that away. My people fought for freedom from tyranny and unfair taxation. You’d give back what they fought for. By the way, when it the last time anyone thanked you for the multiple thousands of dollars you paid last year in taxes? Most don’t even know what they paid but want to give away ever more. Add up your city, county, state and federal taxes, including excise taxes and property taxes. Even with writeoffs it still approaches 50%. Can you afford to give away more? And who in the heck is using my/your money?

  • July 27, 2007 at 5:48 am
    Jane Logan says:
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    Why don’t we transition this little chat to corporate subsidies from our government? We can start with loss reserves being taken off the top of income even if not paid out for years… Then while the money is “reserved” tax free the industry sponsor Tort Reform so that they never have to pay claims which is what happened with the Asbestos situation. After that we can discuss increasing rates based on highly suspect hurricane projections without requiring a refund to insured’s if the projections (as they have) prove wrong?!

    C’mon Gill Fin think before you write…

  • July 27, 2007 at 5:52 am
    Been There says:
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    If you have ever been in an area that has had a storm and your home had damage you would expect to be paid to repair your damages. We carried, Flood, Wind and Home Owners insurance at the time. We lived in FL in 2004 and had water damage to our house, that was NOT from flood but from wind, I know exactly what people go through. Insurance companies use every tactic at their disposal to try to avoid paying claims. After we finally had an adjuster come to our home and declare that we had wind damage that also caused water to enter the house we were told we’d have our check to repair the damage. Then.over a year after the storms, they decided that it was flood damage and not wind damage. After 2 years of fighting and hiring a lawyer to collect our money (and paying ballooning insurance premiums besides)we were able to collect $25,000 of the $55,000 in damage, after we paid our lawyer we only had $18,000 left. I say AMEN to including wind along with flood damage, let the insurance companies go pound sand, just like they did to so many of the homeowners in FL and other areas when there was water damage.

  • July 27, 2007 at 6:03 am
    Jane Logan says:
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    Been There: I’m sorry to hear what you went through to collect on your claim. The situation you describe is exactly what motivates me to fight for consumer rights. I’m ashamed of the insurance industry and hope it gets the regulatory overhaul that’s long overdue.

  • July 27, 2007 at 6:05 am
    Gill Fin says:
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    I am not sure how asbestos relates to this, and as far as hurricane projections
    I certainly don’t think that underestimating future hurricane damages is the soundest course. But if you want to complain about government subsidies to private enterprise, then explain how more government subsidies to private enterprise helps. Subsidies can only occur when they take our money and give it away.

  • July 27, 2007 at 6:26 am
    Jane Logan says:
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    Asbestos Tort Reform is an example of insurerers abuse of the system. The insurance industry knew asbestos was harmfull because it was paying out disability claims-but they never published the information to keep claims at a minium. In other words they caused great harm with no thouht other than for their profits. Then after collecting premiums and setting up “incurred but not reported” or IBNR claims, the industry excluded coverage and sponsored Tort Reform to reduce and finally eliminate asbestos claims. There was a case involving Travelers kowing asbestos was dangerous and never disclosing the information. Now that asbestos claims are excluded and subject to Tort Reform, who do you think is paying for the victim’s medical care-Santa Clause? No out taxes. If that scenario is not government subsidizing private enterprise I don’t know what is…

  • July 27, 2007 at 6:40 am
    Kathy says:
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    Time Magazine reported: June 4th 2007…153 million people live within 50 miles of the coastline, this is more than “half” of the US population!

  • July 30, 2007 at 7:04 am
    Nobody Important says:
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    You must not have read postings on this site before. My angry posting was minor league stuff compared to the nuts that post on this site. I will always object to someone who can’t allow an opinion other than theirs without the name calling. That overreaction on my part was a genuine anger to the post from Jane indicating that because I disagreed with her posting I must not have read it and must be stupid. That’s unacceptable to me and demeaning to the word discussion.

  • July 30, 2007 at 8:11 am
    Harold Polsky says:
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    These are very observant observations. However, you left one out, which is the main thrust of my original post: The insurance companies rarely pay wind claims in Hurricane areas, because they decide, without ever sending an adjuster out (I know, it happened to me) that the damage was from rising water, meaning flood damage.
    As far as the supposed contractual obligations not being upheld by the courts, if they were written in a way that meant what the industry claims they do, the courts could not fail to uphold the contracts. With all the money the Insurance Industry spends on their lawyers, you would think they could write a contract that says exactly what they want it to say.
    The only problem with that is they couldn’t sell a policy with that kind of contract.

  • July 30, 2007 at 8:27 am
    Carrier says:
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    I was interested in responding to this post from a carrier perspective until the discussion degraded into 1st grade name calling.

  • July 30, 2007 at 9:38 am
    Gene Corvino says:
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    The private sector, fearing the loss of billions of dollars in profits, is opposed to wind coverage being included in the NFIP so they oppose the pending legislation. If they are so concerned, why don’t they include wind coverage for ALL property, regardless of where it is, and rate accordingly? After all, isn’t that what insurance is all about?

  • July 30, 2007 at 10:02 am
    Fla. Agent. says:
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    It’s bad enough that the general public’s perception of insurance agents is a couple of points above used car salesmen, politicians, and horse thieves. The childish discourse would only reinforce that perception.

    To paraphrase Forrest Gump: Professional is as professional does.

  • July 30, 2007 at 10:47 am
    DWT says:
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    I suspect that if the private sector could write wind coverage at an adequate premium level they would. The problem is that wind coverage is kind of like flood coverage. Written at an adeqate premium level, the individuals in those areas would moan and groan and the states would call the rates excessive.

  • July 30, 2007 at 11:01 am
    Anonymous says:
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    read the coverage. Thats it I am calling and asking Michael MOORE HELP. sICK OF THE BS.

  • July 30, 2007 at 11:36 am
    Dave says:
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    You’re right… Wind Coverage is a cash cow for the industry as long as…

    1. There aren’t any hurricanes in the area
    2. That it can be priced adequately to cover the risk
    3. If there are hurricanes in the area that the legal system upholds the contractual verbage in the policy.

    When this does not exist, the the cash cow suddenly become a sinking ship that you just throw money into.

  • July 30, 2007 at 12:48 pm
    Tom says:
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    The federal government has so much taxpayer money they just don’t know where to spend it next. Just keep giving everything away. When the CAT storms hit (hurricanes and tornados) the expanded NFIP coverage will be sucked dry since there isn’t going to be enough premium to cover the losses. Taxpayers again will bail out the system. Politicians will find a way to continue taking our money and to keep people dependent on federal government programs. Afterall it’s the federal government that has to take care of us. How else is the democratic party going to exist?

  • July 30, 2007 at 12:50 pm
    tom says:
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    Man DWT you hit the nail on the head! The people would moan and groan and whine the federal government has to take care of me. Taxpayer subsidized!

  • July 30, 2007 at 3:18 am
    calypso says:
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    This is for FLA agent….thank you for sharing your expertise. I appreciate it, learned much, and have a new found respect. How can I get in touch with you to pick your brain & possibly obtain a rate on my FL home insurance. I’ve been non-renewed, have quotes w/a few carriers and the rates range from $400/year to $2600/year. I am leery of FL based carriers due to no financials. The carriers I have been quoted with are Demotech A rated and not rated at all by AM Best. I look forward to hearing from you.

  • July 30, 2007 at 6:57 am
    Nobody Important says:
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    Sure do. Proud to say I do work for one of the most reputable and up front companies in the business. From the sounds of your opinion I doubt that you have worked with us. You seem to have had some bad experiences with the not so up front players in the business.

  • July 31, 2007 at 8:05 am
    Jane Logan says:
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    The HUGE wind deductibles have eliminated most of the carriers wind exposure with INCREASES NOT DECREASES IN PREMIUM!

  • July 31, 2007 at 11:42 am
    Fla. Agent says:
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    Calypso,

    A couple of thoughts regarding your situation.

    First & foremost, go to an Independent Agent. In fact go to several, as Independent Agents don’t necessarily represent the same companies. it can vary from agent to agent.

    There are a number of Florida domiciled companies that are in sound condition, and the lack of AM Best rating is not necessarily due to the financial condition of the company but more due to the length of time the company has been in business and their track record over that period of time. Generally AM Best requires 5 years of experience before they will consider reviewing a company.

    In presenting your home to a carrier, think of it in terms of life insurance. The newer the home the better, and older homes (depending on the company’s guidelines)usually have to demonstrate that they are in “good health.”

    As an example, if the house is over 25 years old, a 4 point inspection would be required to show that the plumbing, electrical, HVAC and Roof are in sound condition.

    Have you taken any mitigation precautions such as having storm shutters protecting all the openings and having bracing for the garage door?

    I had one company that would accept an older home in SE Fla., provided it was of masonry construction and had storm shutters. Albeit this was on a limited basis, but I was able to occasionally place a risk or two, depending on the carrier’s capacity in that zip code.

    Unfortunately, Citizens may by your only alternative, for now. But shop around, and ask the agent how the company they are offering to you performed claims wise in ’04 & ’05.

    Good luck!

  • July 31, 2007 at 1:13 am
    Mark says:
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    Mr. Polsky,

    You say insurance companies rarely pay wind claims in Hurricane areas simply because it happened to you??? So that means there is a secret insurance company rule that no wind claims will be paid in hurricane areas… because it happened to you.

    Please, for everyones benifit, tell us what all has happened to you so we can avoid the same trouble.

    What a moron!

  • July 31, 2007 at 1:26 am
    calypso says:
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    To FLA agent. Thank you for your response. I contacted 4 independant agents. They are quoting me different FL based carriers and the premiums vary. It would seem that they are all relatively new carriers b/c non are AM Best rated. How can I find out how long a FL based carrier has been in the business of writing insurance?

    I don’t think age is a factor, as my home was built in 2001 & is of masonry construction. I have hurricane shutters, but I don’t believe the garage door is braced.

    Occupancy is the biggest issue. My primary is in NY and I use the FL home as a vacation home. I rent it to the same older couple each Jan-Mar.

    Thanks for letting me pick your brain. Be well.

  • August 1, 2007 at 7:45 am
    Harold Polsky says:
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    Broker, you ask some very valid questions, and I will try to answer them as well as I can.
    We did not live on the water. We lived about 2 miles east of the Gulf of Mexico. Our damage was not from flood, as all of the damage we had came from wind lifting the shingles of our almost new (less than 2 year old) roof, rain getting under the shingles and flowing down our walls. This was verified by the first (you notice I said first … there were many) adjuster that ever looked at our house, which was almost 3 months after we initially filed our claim. We checked with our insurer (who for the record was Citizens Property Insurance Corp., simply because there was not one single private insurer who would write a policy in our zip code … I believe the term is redlining, which I thought was illegal) and they advised us that what we had was definitely not flood damage, and we did not have to file a flood claim. I believe this makes it obvious enough there was no line of demarcation in our case. It was wind damage.
    Our insurer took no action to settle our claim, and fought us every inch of the way, going so far as to include us, without our knowledge or consent, in the Mierzwa Wind vs. Flood class action lawsuit. To top things off, over a year after we originally filed out claim, the insurer then decided it was a flood and not wind damage.
    It took almost 2 years before we received anything from our insurer, and at that we had to hire a lawyer and settle for half of what the original damage estimate was set at, before lawyer fees, of course. They still insisted it was a flood, but the check we received clearly stated it was for the wind damage sustained during the storms. My wife and I have a timeline of all the events that happened during this period, and if you want to see it, we will post it here.

    Now, FLA Agent, you’re right. I am not an agent, nor do I work in the industry. What my wife and I are, though, is that most dangerous kind of consumer. We research. We look for the information we post or say before we post or say it. We did more research than you could imagine, on both sides of the issue. We helped start an organization to try to get things fixed in the Florida insurance industry, and when we left the group because we had to move, there were close to 1000 members who had paid a membership fee to join and help defray the costs of research and other legitimate expenses for this fight. There were thousands of others who for whatever reason chose not to join, but offered support in other ways. We heard stories like or own, or worse, from hundreds and thousands of people, mostly in the state of Florida. After Katrina hit Louisiana and Mississippi (as well as parts of Florida, we started seeing the same horror stories on the national news channels, in the national newspapers, and even heard directly from some of the people involved. Believe me, this is not just a Florida issue.
    My wife and I became so acknowledged as being very well informed outsiders that, when the US Senate Banking Committee held it’s hearing on the growing insurance crisis in April 2007, we were contacted and I was asked to testify before the committee, which I did. So no. Neither of us are agents or insiders. What we are, are very well educated outsiders who know more about these things than we ever wanted to know. We educated ourselves because we had no choice.

  • August 1, 2007 at 8:08 am
    Harold Polsky says:
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    Ah, what a wonderful example of the type of intellectual discussion this subject invariably brings forth. Disagree with someone, call him a disparaging name.
    I’ll tell you what. I don’t have to my my story, which is not a singular instance of what has happened. You can read all about my, and literally thousands of others just like it. Just go to the local newspaper websites in Florida, Louisiana, and mississippi. You’ll find all the information about the thousands of wind claims that never get paid.
    My personal favorite is the family in Louisiana, who had neighbors all around them with no flood damage, but according to their insurance company, the “flood” went down the streets in their neighborhood, around, and sometimes over the houses of neighbors (all of whom did not have serious damge), and flooded only their home.
    Ah, such a moronic story. What could I be thinking that perhaps there could be intelligent discourse in a place where the agents “hide” as normal citizens with an opinion.

  • August 1, 2007 at 8:33 am
    Broker says:
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    FEMA’s “FLOOD” definition: A general and temporary condition of partial or complete inundation of normally dry land areas from:
    Overflow of inland or tidal waters; Unusual or rapid accumulation or runoff of surface waters from any source; mudslides which are caused by flood; the collapse or subsidence of land along the shore of a lake or other body of water by erosion by waves or currents of water exceeding cyclical levels resulting in flood.

    Mr. Polsky – Are you saying that you had wind damage, not flood, and your insurer never inspected your home? Do you live on the water? What kind of damage did you have? Flood damage, excluded by most property policies, is (in layman’s terms) rising water, tidal surge, wave action.

    This makes no sense and I’m trying to understand your situation. Trust me, insurers DO pay wind claims, legitimate claims, regardless of the few who think they had a wind loss when it was actually flood. The line of demarcation is usually very clear and the definitions of flood and wind are distinctly different. Where there is a combination, the wind insurer and the flood insurer coordinate payment – – what happened to you? Please explain…THANKS

  • August 1, 2007 at 1:24 am
    Fla. Agent says:
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    Mr. Polsky,

    Please give us the name of the company that did not pay your wind claim, and where in Florida did this occur?

    You cite generalities, but give no specifics.

    From the comments you’ve made so far, I doubt that you are an agent, nor have a clue as to how this industry works.

  • August 2, 2007 at 7:13 am
    Fla. Agent says:
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    Your situation is validation of the “I’m from the governmant and I’m here to help.”

    It was reported yesterday that Citizens had recently closed some 1,000 claims from the ’04 & ’05 storm seasons. Not to mention the fact that Citizens failed miserably in ’04 & ’05 – which led to a major restructuring of the program and some personnel. It was in all the papers.

    One question: Why didn’t you take advantage of the mediation process the State implemented after the ’04 season?

    I know of several companies that paid their wind claims fairly and equitably.
    If you attended any of Commissioner Gallagher’s town hall meetings after the ’04 season, the majority of the consumer complaints were about many of the same carriers whose names are associated with the post Katrina fall-out in the gulf states.

    For the record, redlining is a practice of socio-economic discrimination. Availability (or the lack there of)through the private market was due to carriers having reached their capacity in your area, as well as issues with sink holes. Every sink hole claim is a $5,oo0 to $8,000 hit just to bring in engineers and soil experts to determine whether the claim is valid or not. And more imes than not, the problem was settlement of the foundation / slab. Not a gaping hole in the ground. So your lack of market availability was compounded by your greedy neighbors and trial lawyers, looking to make a fast buck off their insurance carriers.

    Given your former location (I suspect either Pasco or Hernando Counties)and the minimal wind impact in that area from Hurricane Charley, the failure of your roof was in all likelyhood due to poor workmanship and/or materials. You mention that your home was two years old. Was it constructed under the Florida Building Code? If so, you shouldn’t have had any problems – if it was properly constructed.

    To denegrate an entire industry because of your experience with an underfunded and poorly managed state run program indicates (to me) that while you may consider yourself informed / educated on the issue, your comments simply validates the old addage, “A little bit of knowledge is a dangerous thing.” I will conceed that you are indeed a “dangerous” consumer.

    Sorry about your loss.

  • August 2, 2007 at 7:58 am
    Tom says:
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    What I find interesting during this whole debate is no comment on how many claims insurance companies have processed after the CAT claims. A small regional company pays over $40million in claims, adjusts 95% successfully, leaving 5% that are controverted. We all have personal stories good or bad about a company. If there are only 5% or less claims open to question after paying millions in claims companies did a pretty good job. But when we are part of the less than 5% claimants insurance companies suck and the government must get involved. The federal government doesn’t have a record as good as insurance companies. Maybe insurance companies need to do a better job in communicating.
    Just a thought.

  • August 2, 2007 at 9:00 am
    Broker says:
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    Mr. Polsky, thank you for explaining. It sounds as if the issue was that (1) it clearly was not flood, and (2) that your loss was excluded because the building did not sustain “actual damage” (which is the coverage trigger). There is a limitation that excludes interior rain damage from coverage UNLESS the roof or walls sustain damage caused by wind. There are grey areas in insurance, no doubt, but yours is one of the worst. I’m sorry you went through this experience, but keep in mind (I’m not defending, I’m just stating) that the primary reason for that limitation is to prevent paying losses to interiors due to rain entering the building through holes, faults, and deterioration in roofs and walls; otherwise, insurers would be paying for people to not maintain their roofs and roof coverings. I’ve seen your situation before and had it happen to my own home, not to the extent you had, fortunately. Some insurers (adjusters) will cover this type of loss under this type of storm situation as wind damage without blinking an eye. But, going by the contractual wording in the policy, you would have been better off if part of your roof had blown away.

  • August 2, 2007 at 9:08 am
    Barb Polsky says:
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    Rather than resorting to name calling, insults, etc. Wouldn’t it be much more beneficial to everyone reading and writing in this group to just simply discuss the facts, try to come up with answers on how to fix the problems in the insurance industry. There are problems in the insurance industry and the consumer is the one left holding the bag in most instances. Consumers pay their insurance premiums in good faith thinking that when they have damage that the insurance company will fulfill its obligation in good faith and pay for the damages. Very few people that I’ve spoken to that had problems with their insurance carrier after the storms of 2004 were expecting to come out on the other end of their claim with money in their pockets, they simply wanted to get their house repaired and made livable again. Our insurance company (probably in an effort to get out of paying us) sent not one, not two, but three adjusters to our house to inspect our damages and every single one of them said that our claim was valid and we would be receiving a check to repair the damages and put the house back the way it was. Not one of them ever mentioned the word “flood”, not one but yet we ended up in the wind vs. flood category. The last adjuster that the insurance carrier sent out stood on our front lawn with us and our independent adjuster and a neighbor and told us that our claim was a “slam dunk”.
    When we first called our carrier after Frances and explained our damages we were told by them flat out that it wasn’t flood it was wind because we didn’t have “rising water”. Yet two years later they were fighting us saying that we had a flood. There was no flood within our community or anywhere near us for miles, so how could we have had a flood? The two storms that affected us were Frances and Jeanne and our damages may have been much worse had we evacuated but since we did that for Charley and Charley didn’t come anywhere near us we decided to “hang in there” for Frances and Jeanne and were glad we did so that we could move things out of the areas that were getting the most water on them.
    I started doing research after our company had our claim for 3 months and still we had not received a check, not even a dime and we were living in what I called a “warehouse”.
    The things I discovered were appalling. Just about every insurance carrier, large and small, was using or trying to use the “wind vs. flood” issue to avoid payment. There were laws on the books in 2004 (Florida’s VPL) that covered that issue clearly and concisely, but rather than follow the law the insurance industry used their lobbyists and money to either fight the law by requesting appeal after appeal when they lost in court time and time again or to try to get the laws changed. (As an example what happened with the Value Policy Law?)
    While most middle class policy holders in FL had to fight their insurance carriers to get payment in the “wind vs. flood” issue I discovered that a man in Gulf Breeze sat with a $4 million dollar settlement check in his hands for his home damaged in Ivan. How did his home get damaged? Its called “storm surge” and that’s what he got paid for, storm surge. But yet other policyholders were fighting an uphill battle (some with the same insurer that paid the above claim)when insurers claimed “storm surge” was flood and not wind and they therefore were refusing to pay their claims. The link to story is below http://www.fldfs.com/PressOffice/Documents/Their%20Risk,%20Our%20Money06.htm
    I have on my computer tons of documentation and reams of information concerning the tricks that the industry (as a whole) used on unsuspecting consumers to avoid paying them for the damages they incurred. Investigative reporter Paige St. John did a series after Charley hit and it ran in USA Today on the front page, people that hadn’t had any resolution to their claims, etc. suddenly started getting phone calls and checks from their insurance carriers. Here is the link to that series http://www.floridatoday.com/insurancestorm/day1.htm It wasn’t just us that were over a barrel with our insurance claim, there were thousands all over the state and then after Katrina even more. All you needed to do was read the papers and watch the news to see clearly what was happening.
    Even the independent adjuster that we hired to help us try to resolve our claim said he had never before encountered what was happening to us (and he had been in the business for many years). He even volunteered to give up his fee at our mediation hearing if the company would just give us our money. The “umpire” at that meeting ended up telling the adjuster representing our insurance carrier “These people are entitled to justice. Go back to (carrier’s name) and tell them to settle this claim. These people have multiple grounds to sue” Still nothing happened. Just about all carriers, not just a few were guilty State Farm, Nationwide, Allstate and others.
    As far as reinsurance goes. I know exactly what it is. And btw several of the top insurance carriers that have subsidiaries or pups in Florida and elsewhere reinsure themselves through their parent company. And there are other ways to purchase reinsurance rather than from off shore carriers.
    The bottom line is that insurance carriers are making billions of dollars in profits while claiming their losses were hurting them, granted not all of them but the majority (especially your major insurers). That might be true on a state balance sheet but the true balance sheet is that of the parent company. Robert P. Hartwig, Ph.D., CPCU said “The financial and underwriting performance of the property/casualty insurance industry during the first quarter of 2005 was the best in many years. Results through the first six months of the year (at least) are likely to be very good as well.” See the Fact sheets & Resources paper at this link http://www.atla.org/pressroom/research/insurerfinances.aspx
    Also from that same paper…
    Industry’s Surpluses and Profits Have Increased Dramatically Over the Last Three Years. Since 2002, the insurance industry has seen a 40 percent increase in its surpluses, to a record $401.8 billion in 2005. The industry’s profits also saw a dramatic gain, as well, increasing from $2.9 billion in 2002 to $38.7 billion in 2004.
    From a table in that same report-
    In 2002 Surpluses were $285.2 billion and by 2005 (1st Quarter) Surpluses were $401.8 billion
    In 2002 After-Tax Income was $2.9 billion and by 2005 (1st Quarter) After-Tax Income was $17.3 billion
    And there are many more resources you could check into if you’d like more on all these issues and more. Many are right here in the Insurance Journal.
    I am sorry if any agents, etc. take this personally, I certainly do not mean it that way. I’m just trying to get more facts into the issue besides the losses that the industry encountered due to storms, etc.
    The insurance industry seems to be accountable to no one and does as they please. Every business needs to be accountable somehow, someway to someone.

    Barb Polsky

  • August 2, 2007 at 11:19 am
    Broker says:
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    Mrs. Polsky, I read the article you suggested and see that Fred Levin did sustain storm surge, but he also had 135 mph winds which apparently did a ton of damage. Storm surge is flood, period. If he got a $4MM check it was most likely due to the extensive wind damage if the check came from Citizens. Flood insurance would have to have been purchased far above NFIP levels to get a pay-out that large, such as from Lloyd’s.

    I grew up in Gulf Breeze and know that whole area like the back of my hand. I’ve seen shacks destroyed and replaced by gorgeous homes, repeatedly, on Pensacola Beach, as well as other waterfront communities east and west of there. My former home east of Gulf Breeze, not on the island as was Levin’s home, was almost completetly destroyed by Ivan. My ex-husband’s home, dock, boat, and shed were extensively damaged in Ivan by the tidal surge. He lives on the north side of the peninsula on Escambia Bay, near Navarre. He had the boat insured, as well as some flood coverage, but it doesn’t cover docks, etc. Like many in that area, it’s the price you pay to live in “paradise”.

    It seems very strange that you ended up involved in the VPL issue under your circumstances. That law needed to be repealed in my opinion.

    Also, the numbers you see for the profits of insurers are substantial, but keep in mind, they’re not talking about Florida and Coastal profits in those numbers.

    Lastly, as someone else said, there are problems in every industry. It is very unfortunate that you’ve been dissapointed, but the vast majority of insureds don’t have these issues and insurers are not trying to mistreat the public. I’ve been in this business for close to 30 years and I’ve not seen this to be the case. If I had, I’d be the first one to raise h***.

  • August 3, 2007 at 12:06 pm
    Barb Polsky says:
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    Broker, Thank you for your reply. You seem to be an honest person and sincerely looking for answers here rather than just resorting to name calling and degrading comments. We really appreciate that. For some reason we’ve gotten off the track of why I first posted in here and that may very well be our fault because we immediately focus on what happened to us and others all over Florida, Mississippi and Louisiana and I never meant for that to be the focus. That for us is just one of the things that need to be fixed in the insurance industry. And many others see it too, it just seems we open our mouths a lot more than others. Most consumers feel as if the insurance industry is running over them with a steam roller and that they (they consumer) don’t even have a chance to breath before they’re hit with another problem, another increase, non renewal and on and on. For most of us it seems a never ending process and an ongoing, uphill battle just to be able to keep up. On top of that if you have/had damages that you’re trying to get repaired you’re facing the above battle plus the one to get your insurance money to start
    fixing up your damaged home.

    But to answer your response, yes according to the NFIP definition of “flood” storm surge is flood but that’s a whole discussion in itself given the laws that were on the books in 2004. As for the VPL I do believe that it was changed in 2006 but the change was not made retroactive back to 2004. I’d have to check back on that to be sure.

    Trust me you are not the only one that finds it strange that we were included in the Mierzwa lawsuit. I have heard that many times from others and according to one person it is illegal to do that without informing the party you are including that they are being included in a Class Action lawsuit and we were never informed. I was given the information that was what we were included in by the Florida Dept. of Financial Services when neither us nor our independent adjuster could find out any information about what
    was happening with our claim in Sept. 2005. I then heard it from a representative of CPIC (whose name I
    will give you if you want it) who just happened to call us on a Sunday afternoon on my husbands cell phone (where he got the number I have no idea) and told me flat out that we were only getting $6,000.00 on our claim “until this lawsuit is settled” (we didn’t even have a lawyer at that time) and when I asked “what lawsuit the Mierzwa?” his response was yes, he also proceeded to tell me that the money we were getting was to “pay for the flood damage to our ceiling”. Hello? Anybody that had enough water in their
    home to have flood damage to their ceiling in a one story house I do believe would have filed a flood claim immediately and had damages far greater than ours was. I had never even heard of the Mierzwa
    lawsuit until Sept. 2005 when I was told by Citizens that they had turned over our claim to Florida Dept. of Financial Services and when I called them to find out what was happening that was when I heard the word Mierzwa for the first time. We’re also not saying that what happened to us, either to a lesser or greater degree, didn’t happen to anyone but it should not have happened to even one person that had damages. And as far as it only being coastal I do believe that the hardest hit areas for the stoms that
    hit in 2004 were more interior than coastal (with the exceptions of where the storms first came ashore naturally), those poor people in Punta Gorda and Port Charlotte never even had time to prepare properly with Charley because hurricane prediction paths can never be truly accurate, originally Charley was
    heading right for us in Port Richey but thanfully we never even saw a raindrop in our area of Port Richey.

    We just think that given the track record of what is happening with insurance that some controls need to be used. It is not the fault of agents or brokers, and we aren’t saying that it is. We are simply saying that for consumers what is happening is breaking the backs of many and something needs to be done. If the
    only way to get it done is to put it in the hands of the federal government then so be it. We don’t like that idea either but after trying to get things fixed now for 4 years and nothing is getting better then something needs to be done. And given the track record of CPIC if that’s any example of what would happen if the federal government took over that’s pretty scary.

    I’m sorry we had to sell our home in Florida but am so glad now that we did as the battle still goes on. Our insurance here makes much more sense and I’m telling any of my friends and family if they want to move to stay away from any coast line anywhere.

    Again, thank you for your sincerety and your honesty it is much appreciated.

    Barb Polsky

  • August 3, 2007 at 2:30 am
    Broker says:
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    Mr. & Mrs. Polsky,

    Your claim situation was so unfortunate, and even without knowing 100% of the circumstances, I feel it should have and could have been handled much differently.

    If there is a light at the end of the tunnel in Florida and other vulnerable coastal states, there are many people within the insurance industry who are pushing for changes at both the state and federal level that will address how we deal with catastrophic loss events. We realize that even under the best “free market” conditions our current structure is not capable of efficiently handling it, due to the regulatory constraints, tax restrictions, exposure concentrations, unpredictability, as well as associated financial and operating damage that most insurers cannot allow themselves to incur, such as downgrades in ratings, earnings, and statutory surplus.

    There is a conceptual proposal being scrutinized from an actuarial feasibility standpoint “out there” that is extremely encouraging to me as an insurance professional, homeowner, insurance buyer, and citizen concerned with Florida’s dire economic situation.

    It isn’t a government handout, isn’t expanding the NFIP, and isn’t going to cost the rest of the nation not subject to catastrophic losses such as we have seen in the eastern and gulf coast states. It will be a change, but one which won’t adversely impact the insurance industry.

    It follows to a large degree with the Natural Catastrophe Commission Bill recently proposed in the Senate, which the Property Casualty Insurers Association of America (“PCI’) is fighting for.

    Please go to http://www.pciaa.net to read about the Natural Catastrophe Commission Bill.

    Mr. and Mrs. Polsky, I thank you both very much for your time, your insight, useful information, and most cordial conversation.



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