Queries over repairs pitch Realtors against insurers

A Colorado Senate committee voted to indefinitely postpone action on a bill that would have prohibited rate-setting based on homeowner inquiries. The measure, a victory for insurers, was inspired by homeowner complaints that their rates increased after they questioned their insurers about covering repairs.

While the insurance industry has no set standard for tying inquiries to rates, the National Association of Realtors has created a task force to encourage state associations to adopt laws protecting homeowners from being dropped by insurers. According to the Insurance Journal, Kansas, Missouri, Wyoming, California, North Dakota and Virginia are considering legislation to ban inquiries as a motive for dropping policyholders.

Insurers counter that the industry has to be free to assess risks and set rates accordingly.

Louisiana actively woos insurers

New Louisiana Governor Kathleen Blanco used her first official meeting to gather political and business leaders together to urge State Farm to keep its operations center in Monroe and relocate other operations in the state. The meeting was part of a major campaign to let insurers know that Louisiana is a friendly place for insurers to do business.

A law passed last year allows companies to increase rates by 10 percent a year without the approval of the Insurance Rating commission if increases are actuarially justified. The change was made to reverse the decline in companies writing in the state.

In recent years, the number of companies insuring Louisiana homeowners dropped from over 80 in 1992 to around 20. Only about half of those were insuring property along the state's coastline.

Texas initiatives target fraud

A coordinated effort to combat insurance fraud is underway in Texas with the assistance of the insurers, government agencies and the National Insurance Crime Bureau. The Insurance Council of Texas (ICT) said the new fraud unit includes state lawmakers, district attorneys and consumer groups.

Fraud drives up the price of insurance by $300 per family per year according to estimates from the ICT. The organization has combined the resources of 50 different organizations in the anti-fraud efforts.

Florida leads in fraud convictions

According to the Coalition Against Insurance Fraud, Florida leads the nation in the number of fraud convictions and cases presented for prosecutions. Florida also shows the largest gain in the number of convictions.

The state's fraud bureau won 458 convictions in 2002, followed by New York with 389 convictions. The average number of convictions among the 43 states reporting results was 74. Insurance fraud costs Florida families an estimated $1400 per year in higher premiums and increased prices for goods and services.