Fascinating facts
Hitting insurers for non-renewals
New York is clamping down on insurance companies that refuse renewals to residents in coastal regions. Legislation before the state legislature would extend policy periods from three to five years, and prohibit insurers from refusing to renew policies simply because of a property's proximity to the shore. The legislation would permit insurers to discontinue only two percent of their business in any given territory, but would allow multiple rates so insurers could offer coverage for a wider range of risks.
Flood program saves tax dollars
Recent floods in Louisiana prove that National Flood Insurance can save taxpayers money. FEMA officials estimate that the payout of $194 million for flood damage produced a savings of $200-$263 million to the taxpayers since only 12 percent of the aid to Louisiana victims had to be financed by the U.S. government. The remaining damaged properties were covered by flood insurance.
Bonuses for shutters and bolts
A New York law mandates rate discounts for homeowners who install hurricane or storm shutters on their property. The provision follows earlier legislation that requires insurers to give property owners a break for installing smoke detectors, fire extinguishers and dead bolt locks in residences.
Construction theft on increase
Equipment theft in the construction industry is estimated at $200 million with highest losses in California, Florida and Texas. The overall recovery rate of stolen equipment is less than 50 percent.
Miscellaneous
The governor of California has signed legislation that allows
insurers to satisfy the mandatory offer of earthquake coverage
with a mini-policy. Provisions include full dwelling coverage subject to a 15 percent deductible, no coverage for appurtenant structures, and content coverage equal to ten percent of the structure loss.
Between 1988 and 1993, the value of insured residential property
in the most hurricane-prone counties in the country increased by 166 percent. According to the Insurance Research Council, the value of insured commercial property in that same area increase by 193 percent.
The Insurance Research Council reports that the country's most hurricane-prone counties
have increased in population by 15 percent between 1980 and 1993. By 2010, population in those counties is expected to double, to 73 million.
Insurers in Missouri are having to change tactics because of a conclusion by the Missouri Department of Insurance that some qualification practices amount to underwriting discrimination. Among the questionable practices:
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considering geographic locations in deciding whether to renew or cancel policies;
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refusal to renew homes in neighborhoods where there had been a theft claim in the preceding year;
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using the age of a home in underwriting decisions since the result was discrimination against homeowners in urban areas;
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denial of coverage based on the marital status of the homeowners.
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The Foremost Insurance group announced it would stop writing new policies for mobile homes in Florida. The move was in protest to state regulatory agencies that the insurers believe set the premiums at a third of the realistic rates to cover exposure.
There are wide variations in calculating replacement value according to a study with the 10 largest insurers in California. Dollar estimates of the replacement cost of a model home varies by 67% between the highest and lowest figure.
Texas ranks first nationally in the number of tornadoes - a statistic that has drawn the attention of underwriters in that state.
Relatively more arsonists work in Hawaii than in any other state. In 1992, 43% of all fires in the island state were arson-related. Other contenders for this ignominious distinction included Washington, D.C. (35%), California (30%), Colorado (28%) and Connecticut (25%). According to that study, Vermont is the safest state for property owners. Arson caused only four percent of the fires there.
