Category Archives: Insurance

From New Orleans City Business: For Realtors, flood insurance coverage in Southeast Louisiana can be a challenging part of the sales process. “It can actually take someone out of affording a certain dollar-value,” said Renee Ferrera, CEO of Keller Williams Realty Crescent City Westbank Partners. Ferrara noted that the cost of insurance can in some cases be upwards of $200 to $400 a month, a pricy addition to the average homebuyer’s already-delicate mortgage equation.

By Alan Zibel, from the Wall Street Journal: Officials at the state and federal level have been concerned that insurers have been charging too much for something known as “force-placed insurance,” which takes the place of a lapsed policy.

By Rebecca Mowbray, from the Times-Picayune: Bob Hunter, director of insurance at the Consumer Federation of America, said that while competition can do wonders for rates in a stable market, after a storm, when insurers are eager to raise rates and drop coverage, strong regulation makes a bigger difference in keeping rates moderate. Hunter has become deeply suspicious that companies are simply taking advantage of the situation after storms to gouge people. Hurricane Katrina may have been the largest insurance event in history, but if one looks at the financial impact that it had on the insurance industry nationally, it’s much less significant than the impact of Hurricane Andrew in 1992, a much smaller event by insured losses. With each disaster since Andrew, insurers have increased deductibles, trimmed coverage and dropped policies, all of which foist risk back on policyholders — and, through disaster aid, taxpayers — yet they have continued raising rates. The result is that insurers are better financed and shoulder less risk, so even a big event like Katrina didn’t rock the industry.

“They have basically eliminated their risk,” Hunter said. “Why haven’t these things worked to bring rates down? Are they just gouging?

By Ed Anderson, from the Times-Picayune: Citizens Chief Financial Officer Steve Cottrell said although the 10.5 percent increase is being sought, homeowners who do not have wind and hail coverage from Citizens can expect an average increase of just 2.4 percent – about $35 for the average policy premium of $1,600 a year. Cottrell said because Citizens has underpriced its wind and hail coverage for years, those policies will see an average rate increase of 58 percent. But when that 58 percent increase is lumped in with the smaller increase on the standard policies, he said, it works out to be an average increase of 10.5 percent statewide.

By David Muller, New Orleans City Business: It’s been more than six years since Hurricane Katrina triggered a multibillion-dollar upgrade of the region’s storm protection system, and most of those repairs have come to fruition in the past year. Still, there’s little hope most homeowners in Southeast Louisiana will see a reduction in property insurance rates for their homes any time soon.

By Leslie Scism, from the Wall Street Journal: Home-insurance policies are pretty much the same, and carriers compete on the basis of price and service—right? Believe those two myths and you might wind up paying dearly. Homeowner policies have important differences that can affect whether claims are paid, according to a study scheduled to be published early next year in the University of Chicago Law Review. The problem is that those differences are poorly understood.

By Christian Moises, from New Orleans City Business: The average premium in every parish in the metro region climbed in September, the most recent month for which NFIP numbers are available.