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I think this is good news for homeowners everywhere.
The Insurance News Network has the full story here; take a peek and learn about the new provisions in the Flood Insurance Reform and Modernization Act of 2006 (FIRM).
As the East Coast gets deluged with rain, the West remains dry--dangerously so. Here in Colorado, our governor has requested disaster-area status for a few particularly parched agricultural counties. Highway signs remind motorists not toss their cigarette butts from their cars.
The prospect of catastrophic forest fire is scarily real--especially with the Fourth of July on the way and a long summer ahead.
So, I've got fire on the brain.
Fires have been part of the natural order in the West for thousands of years. What's relatively new is the presence of human structures in this fire-prone landscape. Despite the hazards, migration to wild areas has continued unabated for our country's 200-plus year history.
Proximity to natural beauty has its drawbacks of course, and this summer those drawbacks are in stark relief. Or are they?
According to the U.S. Forest Service, the threat of fire ought to be taken more seriously than it currently is. Instead, we have more and more people flocking to the outer edges of wild areas, often building large homes next to forests that are essentially stands of extra-large match sticks. Why?
This excerpt from the U.S. Forest Service's "Federal Wildland Fire Policy" offers an explanation:
In general, the public does not perceive a risk from fire in the wildland/urban interface. Further, property owners believe that insurance companies or disaster assistance will always be there to cover losses. When people believe the government will protect them from natural hazards, the damage potential of a catastrophic event increases ... Unless a catastrophic event occurs, wildland/urban interface protection issues generate little interest.
The Forest Service wants insurance companies to do more to educate homeowners about the risks of wildland/urban interface living and also to school them in ways to mitigate the danger of wildland fire. As it is, though, "the insurance industry does not fully understand wildland/urban interface problems, and the public and the fire service do not understand the role of the insurance industry in the interface."
Worse still, this lack of awareness forces the Forest Service into the home protection business--putting more fire personnel at risk and neglecting wild areas that are often of more social value than threatened homes. Meantime, homeowners and insurance companies have been lulled into a complacent dependency.
According to the Forest Service, they key is to engage stakeholders on every level--particularly those on the local level--and identify the risks and responsibilities of wildland living. "To be successful, the emphasis must be at the local level, supported by the States and coordinated with the Federal agencies," says the service.
If you live near a wooded area and you want to learn about how to lessen the risk of fire, check out these resources.
Firewise Communities
U.S. Fire Administration
National Fire Plan
Also, mosey over to InsureMe's ever-helpful Insurance Resource Center for tips on Wildfires and Your Homeowner's Insurance.
Despite an aging population, increased longevity and booming medical costs, fewer and fewer Americans seem concerned about the affect long-term care could have on their pocketbooks—or their lives.
A recent study by the John Hancock Life Insurance Company reveals several surprising facts:
What exactly is long-term care (LTC) anyway?
When someone can no longer perform daily activities such as eating, bathing or dressing, long-term care is the help they need to take care of these basic functions. And LTC insurance, aimed at providing financially during these times, helps fund this help, given by skilled caregivers in a nursing home, assisted living facility, day care or even at the patient's home.
According to the study's findings, most of us just plain opt to ignore the possibility that we'll have to face what might actually become the inevitable.
"Clearly, long-term care is difficult for Americans to think about. In fact, our survey suggests that they are in denial, taking a chance they won't need care or just ignoring the fact that they might," said Laura Moore, senior vice president of John Hancock Long Term Care Insurance. "[But] in the case of long-term care, ignorance is not bliss," she added.
Indeed. Planning for these types of expenses can dramatically affect both the quality of patient care and the quality of life for patients' families. But once people take LTC planning seriously, it's often not as overwhelming and cost-prohibitive as originally thought, this insurer says.
According to yesterday's Insurance NewsNet article on the subject, Americans are just plain confused about long-term care, and are not facing the realities of what lies ahead regarding this issue. John Hancock hoped this latest information provided by its survey would "serve as a wake-up call" and help change all that.
[Get more info here.]
New York may become the 36th state to implement a mental health parity law--a law that would require insurers to cover mental health to the same degree they cover physical ailments.
While both chambers of the legislature have been busy crafting Timothy's Law, which is the informal name of the bill, New York Governor George Pataki has been cagey about whether it will get his signature.
Timothy O'Clair, the bill's namesake, committed suicide at age 12. His parents had given up custody in order to pay for his mental health treatment after his medical coverage ran dry.
According to the Rochester Democrat and Chronicle, the state plans to ease the potential premium burden for small business by picking up part of the part of the tab for companies with fewer than 50 employees.
The Hurricane Katrina Grant Program in Mississippi has announced that it will be accepting another round of applicants.
The Insurance Journal is reporting that the state has increased the insurance values used in calculating homeowner grant amounts by 35 percent, in an effort to compensate for higher post-Katrina construction costs.
The spokesperson for the Mississippi Development Authority said the action came after state officials realized that the majority of homeowners were "uninsured in comparison to inflated construction costs." Hmm. That seems like a rather basic observation, but continuing on...
The grant program is designed to provide financial assistance to homeowners who suffered damages and lived beyond designated flood plains, or did not have flood insurance coverage. It is among multiple housing initiatives in the state and along the Gulf coast after last year's raucous hurricane season.
IJ reports that more than 16,500 residents have applied for the Katrina Homeowner Grant Program; the grant is capped at $150,000 and does not affect those receiving state or federal benefits like pension or disability.
The program acknowledges that they may not be able to help everyone, but Mississippi governor, Haley Barbour, has stressed the importance of registering for the grant, saying, "If you don't register, we can't help you."
For more information and application guidelines, visit the grant page here.
[Related reading]:
Up and coming Mississippi state housing initiatives [Mississippi Home Help]
Home Insurance Rates Skyrocket in Mississippi [The InsureMe Insurance Blog]
I just had an idea. It could turn out to be no good, and if it is, I'll take full responsibility for it in a few days if it fails miserably.
I read a post at the Consumerist today in which the author asks the readers how they liked their "sales greeting". Do they like being approached by salespeople in a store and asked what exactly they're looking for? Do they like to be ignored? Do they like to be welcomed into the store and then left alone?
The thread of comments following this post got me thinking about my preferences and how I liked—and disliked—to be solicited on broader sales level. (For example, I don't like when people call me but am okay with most email communications.) It also got me thinking about how greatly agents on the InsureMe network could benefit from consumer feedback. Then I had an obvious epiphany: why not ask readers of the Insurance blog about their sales and marketing preferences and share them with our agents!
So here's the deal. I want to hear from you. All of you. Tell me what you like, tell me what you don't like. Do you hate receiving phone calls from salespeople? Do you prefer being contacted with quotes and other offers via email? Do you pay attention to offers and flyers that you receive in the mail? Do you pay attention to newspaper advertisements? Radio ads? Do you like to meet with an agent or just get your business done and over with online?
Leave all of your thoughts and suggestions in the comments section [anonymously if you wish], and I'll share them with our readers at the InsureMe Agent blog. Because voicing your opinion is one thing—sharing those thoughts with someone who can actually do something about is another.
Oh...and remember, the more ideas you leave, the less of an idiot I'll look like. :)
In a recent post I asked the question "What does the insurance industry think about climate change?"
As it happens, the National Association of Insurance Commissioners has established a task force to explore the subject. In an interview with Insurance Networking News, Tim Wagner, who co-leads the task force, spoke about the formation of the group and what he hopes it will achieve:
For me, personally, I want insurers to acknowledge and become involved in managing this change. It's ironic that the European reinsurers have been on this issue, and the U.S. insurance industry has not been as engaged. ... Basically, we need to start thinking about the risk management associated with the change of climate and demographics.Wagner sees the climate change-demographic parallel--where you have high concentrations of people living in the most climatically vulnerable places, like the southeast--as an essential subject for insurers to explore. "The two together create almost infinite risk compared with finite premium," he said.
Wager also offered an explanation for the tardy industry response to the climate change challenge: "In insurance we tend to look at the past instead of the future, and when you have a dynamic change taking place, looking at the past doesn't work so well." Still, he says, history does offer some sobering lessons:
You know, 20th century historian Arnold Toynbee analyzed 21 failed civilizations and found two reasons for their failures. The first reason was the concentration of wealth, and the second reason was the inability to adapt to change. I think we need to recognize that things are changing and start planning for that event.
Wise counsel.
Yellow teeth and bad breath. Higher homeowner's and health insurance rates. Carbon monoxide, ammonia, and hydrogen cyanide (cyanide!). Early death.
If these reasons aren't enough to compel you to quit smoking, how about this one, courtesy of the U.S. Surgeon General:
You're killing us.
The Surgeon General Richard H. Carmona announced Tuesday that secondhand smoke kills tens of thousands of nonsmokers each year.
According to the New York Times' coverage of the announcement, second hand smoke caused 46,000 premature deaths from heart disease last year. Three thousand died prematurely from cancer. And plumes of secondhand smoke triggered 430 cases of sudden infant death syndrome (SIDS).
See the full report here.
I found some good tips from the Institute for Business and Home Safety (IBHS) today, detailing how proper cleanup can help prevent futher damage after a flood. Minimizing flood damage from the start can cut down on toxic mold and extensive structural damage—which can jack up the size of your claim and make you an unattractive candidate to insurers come renewal time. 
Whether in your home or business, after the threat of physical storm danger has passed, the IBHS recommends:
Once it's safe to begin the actual clean up, the IBHS recommends:
Having been through a couple of floods in my day, I can tell you that taking immediate action can save you all kinds of time and money, both during the clean up and restoration process, and in future home insurance premiums. Take a look at the full IBHS report here and be sure to check out our related post, Salvaging Storm-Damaged Belongings for more tips on preserving your belongings.
Roadside assistance coverage is a commonly added supplement on many auto insurance policies. But did you know that, if you use this valuable resource too much, your premiums could actually go up?
Don't feel bad; this was news to me, too. A recent report from CNN Money revealed this relatively unknown fact, so I thought I'd research it further.
Buying roadside assistance through your insurer may seem like a wise (and innocent enough) thing to do. After all, the cost is minimal (as little as $3-$10 for a six-month period) and the added protection can be invaluable when you run out of gas, lock yourself out of your car, get a flat tire or just need a jumpstart on a cold winter day.
In contrast, those same services purchased through independent motor clubs such as AAA or Allstate Motor Club cost significantly more—between $45 and $100 per year or more.
But here's the real difference: using your insurer's towing package may cause your rates to rise.
Why? Many insurers consider not only variables such as the car you drive, your driving record, where you live and your credit history in determining claims risk; some also examine roadside claims. According to the report, "While a one-time jumpstart is unlikely to raise any red flags for insureres or send underwriters running to raise rates, consumer usage of the emergency roadside service will be compared to other variables when insurers are detemining a risk profile for a policyholder."
And of course, the more risk for your insurer, the higher your premiums will be.
A State Farm spokesman agrees. "The chance that one of those claims would have an impact premium-wise is probably very minimal," he says. "But there is a correlation between those claims and auto insurance risk."
But how would your insurance company know how much you used their towing package?
Insurance towing claims are reported to and kept track of in a national database, which in turn makes this information freely available to insurance companies. Insurers may then check this information against that provided by potential customers when they apply for insurance coverage. However, auto club claims are not collected in this same way, so that information stays completely private. Translation: it can't affect your insurance rates.
However, not all insurance companies use roadside assistance as a premium pricing variable, says the Insurance Information Institute (III). Spokesmen for Progressive and Geico say their companies don't; Allstate, on the other hand, does.
If you bought a roadside assistance package with your auto insurance policy, you might want to check with your insurer on this one, folks. As for me, I think I'll stick with the great deal I got on my new auto policy—and keep my AAA membership.
When it comes to steering human behavior on a macro level to produce a socially desirable outcome, there are a couple of options:
1. Appeal to people on an altruistic level
2. Offer them economic incentives
Ask any economist, and he or she will say the latter option is a better bet.
When we seek medical treatment, we don't usually think about the incentives motivating our doctors. We assume, perhaps naively, that our health is of paramount concern--that our doctors genuinely want us to be healthy. Because why else are they practicing medicine?
What if our health isn't always at the top of their list of priorities? What if the incentive structure in medicine rewards doctors who don't take good care of us?
Recently, Mary Joe Feldstein, a writer for the St. Louis Post-Dispatch, suggested just that:
Typically, physicians get paid only when their patients receive care, and more complex care often brings bigger paychecks. At the same time, doctors complain that paltry payments for office visits force them to rush through checkups instead of educating patients about their illnesses, medications and healthy living - all of which might lower future medical bills.It's a system that gives doctors little financial incentive to keep patients well. And, experts say, it might be contributing to dangerous, unnecessary care as well as high medical bills.
Scary, isn't it?
The good news: there are people who realize the system needs to change, and they are busy devising a way to provide the health care industry with incentives to keep us out of the doctor's office.
According to the Post-Dispatch article, the federal government's experimental Medicare Advantage program is an effort to fix the incentive structure. Under Medicare Advantage, the feds pay private insurers a per person rate. The money is spent on whatever care the patient needs, and the remainder is pocketed by the insurance company. Thus, the healthcare industry has an incentive to put its time and energy into checkups, patient education and preventative care, which are cheaper and lesson the likelihood of major treatment later on.
"The hope is that the plans will encourage better management of illness to avoid expensive flare-ups," Felstein explains.
Wait a minute, you say, if the insurance companies can keep any unused money, doesn't that give them an incentive to convince patients to forgo any kind of treatment--necessary or not?
There is that risk, but, as a source quoted in the article points out, that scheme would probably backfire; the patient would likely get frustrated with the lack of care, or would get sick enough that he would require really expensive care--something insurers would try to prevent.
As much as we don't like to believe it, doctors and health care professionals are like the rest of us--that is, they're human and respond to incentives.
[Hat tip]: The Health Care Blog
Gulf Coast residents aren't the only ones getting snubbed by skittish insurers. The New York Daily News reported today that some New Yorkers (yes, New Yorkers) have lost coverage because of last year's hurricane season.
Although New York's weather may not be as volatile as New Orleans', Allstate and Nationwide Mutual have decided that risky weather and high property values have made insuring some northeastern coastal areas an unwelcome financial liability.
"Homes in Long Island have gone up in the last five years between 60 and 70%. Believe me, our rates have not gone up by 60 or 70%," Allstate chief Edward Liddy told the New York Daily News. "You look at our exposure and you say 'We want to have enough capital to protect and care for all our 17 million households across the country.' To do that, you may have to reduce your exposure in a small way in other areas."
Even though New York hasn't been hit with a catastrophic hurricane since the Great Depression, the Daily News reports that Allstate plans to drop coverage of 30,000 homes in coastal New York.
Will additional church insurance benefits increase congregations across the country?
That's my question, after reading the Insurance Journal's article about insurers like GuideOne, who provide parishioners in 19 states with added insurance benefits.
FaithGuard, the company's year-old home and auto insurance product, is gaining popularity, with new policies being purchased at a rate of more than 160 per day. So what kind of added benefits are policyholders earning with FaithGuard?
According to IJ, the insurance company, which insures over 43,000 churches nationwide, waives the deductible if your car is involved in an accident while driving to or from a scheduled worship or other religious activity. In addition, medical payments are doubled if you're involved in an accident while driving non-family members directly to or from a scheduled religious activity.
The benefits go on, including a five percent discount to non-smokers (which is pretty standard of most insurance companies) and mortgage payments are made up to $7,500 if you become disabled because of an accident in your home.
Perhaps it's the cynic in me for even asking this, but are there any provisions in place to keep people from taking advantage of these added church insurance benefits? With all the take, take, take going on anymore, I have to wonder if folks would return to church to see what they can get out of it—and not from a spiritual standpoint.
Despite my skepticism of others, however, I think products like FaithGuard can be a very viable insurance option for some Americans. Just make sure to compare the premium prices and benefits of products like FaithGuard to other policies in your area.
And, I'd be remiss if I didn't point out the handy quote box on the top right-hand side of the page. So, you know...if you feel like comparing some quotes, feel free to fill it out. If not, that's cool too. We're just happy you're visiting our blog. Really. :) [End unabashed InsureMe plug.]
[related post]: Will Life Insurers Give Discounts to Churchgoers?
The Street's Terry Savage has written a creepy column about speculator-initiated life insurance, a scheme in which insurance "investors" convince seniors to take out additional life insurance policies.
In the plot, which is shady but legal, granny doesn't pay for the first two years of policy premiums, and for her trouble she gets a yearly percentage of the overall policy value--often several thousand dollars.
After two years, the premiums--which are incredibly expensive--become the senior's responsibility, prompting grandma or grandpa to sell the policy to the speculator, who becomes the beneficiary.
The speculator then waits for the insured to croak and collects on the million-dollar policy, recouping the expenses incurred from paying for the premiums (and grandpa's spending money.)
"[The scheme] could put you in the position of being a target," says Savage. "At the very least, it gives someone a tremendous incentive to see you dead sooner rather than later!"
She advises seniors tempted by the plan to consider how creepy it would be to have someone out there, who may be a complete stranger, betting against your life.
Savage: "It sounds like a script from "The Sopranos.'"
Fellow insurance blogger, Penny, sent me this article by way of the Insurance News Network the other day, and I found it fitting for today's peculiar posting.
According to the INN article, the National Underwriter (an insurance publication) recently asked their readers to share their strangest claims stories. Oddly, most of them included animals.
Here's my favorite:
Mr. Ward sent in his tale of an insured driving back from an unsuccessful fishing trip on the coast. As he was driving, the insured decided to take one last try at catching something, and stopped to fish in a friend's farm pond in the middle of a cow pasture.'A herd of cows gathered around the car while he was fishing, but he thought nothing of it until he got ready to leave. As he approached the car he saw a cow chewing on something that was long and black. Each time the cow chewed, the black object bobbed up and down,' Mr. Ward wrote.
'Curious, he walked over a little closer and realized that the cow was chewing on his windshield wiper! He ran screaming to his car, waving his arms and shooing the cows, only to discover that they had licked his auto from one end to the other, and had eaten the rubber seals from around the windows,' he added.
The reason for such strange behavior is fairly simple, he wrote. 'Cows like salt,' Mr. Ward explained. 'His car had been parked next to the ocean for two days. They saw it as a huge salt lick.'
The insured called to explain what had happened. 'He said his car was covered with gooey slobber, the paint was ruined, and all the windows were jangling as he rode along because there was no rubber to hold them in place,' Mr. Ward wrote. 'He wanted to know if comprehensive coverage was really comprehensive.'
See, even insurance has its lighter moments. :) Enjoy the article and have a great weekend!
There is a brief but uplifting report in the L.A. Times on how the number of kids without health insurance has dropped by a third in the past eight years. The federal government credits state efforts and expenditures for the increase in coverage. According to the National Center for Health Statistics, about 6.5 million children were without health coverage in last year.
The National Association of Insurance Commissioners (NAIC) introduced a new Web site that aims to help consumers cope with the "maze of options and cost considerations" when buying a health insurance policy. The site is called InsureU, and in addition to offering resources on health insurance, it provides helpful tips on buying auto, home and life insurance policies. The site's unique organization allows users to find information relevant to their own "life stage," i.e., age or marital status. Check it out.
According to an NPR report, nutritionists are recommending a "big increase" in vitamin D exposure. Vitamin D is credited with building healthy bones and strong muscles. Previously, scientists thought random daily exposure to the sun was enough, but long hours in the office, increased sunscreen use and dim winter rays are leaving many without adequate levels of D. Ten minutes in the midday sun should be enough--provided you're not slathered in 45.
Lastly, it turns out that bird flu might not be the only "avian malady" to worry about. Check out these other bird-related afflictions.
If your son or daughter is off at college, you could be missing out on some serious savings—on car insurance.
According to this article by U.S. News and World Report, almost half of all parents of college students forget to call their agent and reduce their car insurance when a student goes off to college—and fork as much as $3,000 for no reason. In fact the VP of education and research at the Independent Insurance Agents and Brokers of America, says parents can save $100 to $200 a month just by scaling back their kid's coverage.
The article also provides some additional ways to maximize savings:
I've got my questions about that last point; if Bobby comes home from school, is he really going to want to drive the '73 Dodge Dart? Then again, I suppose if Bobby doesn't have a car at school, he'll drive just about anything. :)
Oh...and don't forget—after your student receives that diploma and gets the first job, your son or daughter should be faced with the reality of paying for their own car insurance. Experts also agree that you can reduce the amount of life insurance you carry, since you no longer have to worry about paying for school tuition.
With all that extra cash, it's no wonder my parents wanted me to hurry up and graduate. :)
Insurance Journal's Andy Simpson reports that some gulf coast residents are being scammed into buying bogus auto and homeowner's insurance. Unsuspecting consumers are lured by low premiums and promises of comprehensive coverage.
The Journal passes on this bit of timeless insurance wisdom:
If a policy looks to good to be true, it probably is.
Check out the video broadcast for the details--it's informative (if a depressing commentary on human nature), and Simpson's wooden performance (Edward R. Murrow he isn't) is entertaining.
Until recently, our wheelchair-bound friends haven't had many options when it comes to driving. Short of installing a lift in a full-sized van and lugging themselves from their home on wheels to the driver's seat, these brave souls have, for the most part, remained in the passenger seat.
But that may be about to change.
If you know someone facing this challenging situation, you might want to make note of this word: "Kenguru." Why? Because, in the future, it could very well change their lives.
The Kenguru, an electric-powered automobile designed specifically for wheelchair users, is making driving much simpler and more pleasureable for the handicapped. This stylish car has no front seat—just a space built to house the driver's wheelchair. The driver simply rolls in through the extra large car doors at the rear of the vehicle (much like a hatchback) and into position. The wheelchair locks into place, within easy reach of the car's controls, which are centered on a joystick. The car requires only minimal maintenance, and was designed to operate reliably, making owning one of these bits of innovation a real pleasure for those who need them.
What's the catch? (There always is one, isn't there?) According to the report on Newlaunches.com, this unconventional car is available only in Hungary for now. And even if you did go to Europe to check them out, you wouldn't see one passing you by on the freeway. Like most electric mini-cars, they have a limited range of about 35 miles and travel only on surface streets—at speeds of up to 25 miles per hour.
Woo-hoo! Not exactly lightening speed, huh?
There is more good news though. This little gem costs only $12,500; and in Hungary, it's free for some individuals through their health insurance plans. Whether or not it'll land in the good ole' US of A and become an allowable insurance expense remains to be seen.
Although only a few argue there was a direct, provable link between last season's particularly nasty hurricane season and man-made climate change, everyone will agree there was a (very) strong correlation between the amount of devastation and the amount insurers forked over in claims.
After last year's storms, some scientists noted that, although there perhaps wasn't a direct connection, future atmospheric warming will bring warmer ocean temps and warmer oceans will bring, in turn, deadlier and, for insurance purposes, more expensive storms.
In December, Ceres, a national organization that "works to advance environmental stewardship on the part of business," released a white paper entitled "Availability and Affordability of Insurance Under Climate Change: A Growing Challenge for the U.S." Ceres wrote the paper before Katrina and Rita made landfall.
The mere mention of climate change raises the hackles of some--namely those who believe the term should be put quotes. Climate change is one of the hottest political issues of the day, with one side calling it the most important issue facing mankind, another calling it a fetish of lefty doomsayers.
As it happens, insurers are showing some concern--though not enough in Ceres' opinion--over climate change. Not lost on the irony, the Ceres paper points out that the National Association of Insurance Commissioners had planned to discuss climate change at their meeting last fall in New Orleans. Of course, the discussion--and the entire meeting--was shelved because the host city was underwater.
First the Veterans Affairs Department, now American International Group.
Reports indicate that a thief stole a server and a laptop computer from an American International Group (AIG) office in the Midwest in late March. The large insurer's server contained personal information--including social security numbers and medical records--of nearly a million people.
Even though the burglary happened almost three months ago, AIG officials have only recently begun to notify people whose information may have been lost.
According to the Insurance Journal, "AIG declined to issue a release at the time of the theft in order to avoid alerting the thief about the potential of accessing personal information on the hard drive."
AIG spokesperson Chris Winans told the Journal there were no indications that the information has been compromised.
USA Today's coverage offered this bit of helpful context:
[AIG] is likely to be criticized for the more than 21/2-month delay between discovering and disclosing the data breach, at a time when state and federal lawmakers are moving to address the growing number of identity thefts in this country.
The story raises the question of what to do in case of a computer theft--keep mum and hope the thief doesn't realize the data goldmine at his fingertips, or risk tipping off the thief in favor of alerting those vulnerable to identity theft?
USA Today cited Comptroller General David Walker's recent testimony to the House Committee on Government Reform in which he said early notification "has clear benefits, allowing people the opportunity to take steps to protect themselves against the dangers of identify theft."
I would have to agree with Walker's point. The alternative—hoping thieves just want the equipment and not the content—is a policy of wishful thinking. When someone's identity is in jeopardy, wishful thinking doesn't quite cut it. The wait-and-hope policy also has the added undesirable effect of reducing accountability on the part of the institutions we trust with our most valuable information.
Perhaps I am overly cynical, but it is convenient for companies to make the "we didn't want to alert the thief" claim when their real motive may be to keep the breach--and the fallout--under wraps.
As home insurance rates increase in Mississippi, earthquake insurance rates are on the decline in California.
The Insurance Journal reports today that policies issued by the California Earthquake Authority (CEA) will see rates decrease by an average of 22.1 percent. And, while about 85 percent of CEA policyholders will see their rates decrease, about 15 percent of CEA policyholders may see an increase in their rates.
Why all the rate flux?
New geological and soil surveys created "more refined maps," which indicated that some areas are more (and less) stable than previously thought. So while the majority of policyholders will see premium dips, some Californians will see increases due to more unstable soil conditions in their areas.
Despite some increases here and there, I think this is good news for earthquake-prone Californians...and it might have some folks in the Gulf considering a move out West. :)
The sting will be sweet for Mississippi homeowners who are currently insured under Nationwide Mutual Fire Insurance Company. The Insurance Journal reported today that the state's insurance commissioner, George Dale, has approved Nationwide's rate hike request—by an average of over 16 percent statewide.
The rate increases were sought by the insurer after the catastrophes along the coast last summer, and starting September 9 of this year, Nationwide policyholders will see a rise in their home insurance premiums. Rates will increase more along some portions of coastal Mississippi than others; rates will rise 30 percent in Harrison County (south of I-10 and east of U.S. 49) and just over 21 percent in areas south of I-10 and west of U.S. 49. IJ also reports that the company may no longer write policies south of U.S. 90. [See the map here.]
Commissioner Dale has said that insurers must be granted increases to "keep the market viable," according to IJ.
"It's key to managing our risk," said Nationwide spokesman Joe Case. "Our goal is to maintain long-term viability and be there for customers in Mississippi and everywhere we do business."
The rate hikes come as little surprise after last year's devastation, but, as we've mentioned before here at the Insurance Blog, the increases have made for trying times for coastal homeowners. While some major insurers in Mississippi are still writing new policies, many have cut back.
As a result, many customers in the southern part of the state are moving into the "wind pool", more formally known as the Mississippi Windstorm Underwriting Association (MWUA). The wind pool is an insurer of last resort and covers homes in weather-prone areas of the state. IJ also reported that the MWUA has also asked Commissioner Dale to approve a 397.8 percent rate increase for the thousands of costal homes covered under the wind pool.
Yikes. Undoubtedly hard times for homeowners down south. And while insurers argue that the rate hikes are necessary to stay in business—and to manage risk effectively—many consumers and consumer groups argue that the rate hikes are leaving many homeowners with little or no protection from coastal storms. The situation has our friends at RiskProf asking, At What Point Does One Move?
It's a great question to ask. Because, on the one hand, I wouldn't want to leave a home, job and community I love to get away from increasing home insurance rates—but on the other hand, as Prof says, the government is not obligated to make it easier for us to stay in one place...especially at the expense of taxpayers.
Have a solution? Give us your thoughts, opinions and suggestions via comments. Maybe we'll solve this dilemma together. :)
[related post]: Can Coastal Property Owners Find Insurance?
The Associated Press picked up on two recent studies that suggest our sanitized world is turning us into softies.
The two studies involved rats from clean labs and their counterparts from the sewer. The data reveal that the slum cousins have stronger immune systems. Researchers speculate that they develop a resistance to disease and dirt in adolescence.
"The studies give more weight to a 17-year-old theory that the sanitized Western world may be partly to blame for soaring rates of human allergy and asthma cases and some autoimmune diseases, such as Type I diabetes and rheumatoid arthritis," the AP reports. "The theory, called the hygiene hypothesis, figures that people's immune systems aren't being challenged by disease and dirt early in life, so the body's natural defenses overreact to small irritants such as pollen."
According to the AP, the hygiene hypothesis has support from epidemiological studies that show higher rates of asthma in the developed world than in the global south.
Before you embrace your inner dirt bag--or your inner college freshman--remember that scientists believe that protection comes from early exposure to grit and grime.
(Mom and Dad: Thank you for having dogs in the house growing up. Not only were they great fun, they may have made me more resistant to disease!)
The next goal for researchers is to understand how and when these dirty rats develop their strong immune systems. To do this, one researcher cited in the article plans to build a 50-foot artificial sewer.
[Source]: Wired
Another insurance company is making it easy for its insured to get money and essential items like toiletries and clothing following natural or man-made disasters.
Stationed directly on catastrophe sites, The Hartford will soon begin offering its affected customers emergency claim cards to be used for buying essential items in the wake of disaster.
According to an article in Insurance Networking News, claims handlers will determine the amount of funds to be dispersed, and the card can be activated within 24 hours. The company calls the cards, "an innovative new tool for accessing emergency claims payments after a catastrophic event," as cited by its press release dated June 12.
"People whose homes have been destroyed by a hurricane or other catastrophe need food and shelter, of course, but they also need basic items like toothbrushes, clean clothes, and diapers," said Juan Andrade, newly appointed executive vice president of The Hartford's Property & Casualty Operations' claim organization. "It's important that our customers have a convenient way to buy these items immediately. Providing them with a choice can make it easier to get though the aftermath of a catastrophe."
Personally, I think the sentiment is great. But after reading a recent article at CNN.com that claimed hurricane aid victims had been spending government assistance on jewelry, vacations and other "nonessentials," (to say the least!), I wonder if this move is a wise one....
Surely there must be a better way to get help to those who need it, while holding them accountable for their purchases?
Is there a better solution? How can we hold the insured more accountable in situations like this? I'd love to hear your take on the story....
I've become borderline obsessed in recent weeks with the TecheBlog; while I'm not as engrossed in technology as some people, I still can't get enough of the blog. I particularly enjoy their Top Ten lists, and I think you will too. Let's take a peek, shall we?
First up: Top Ten Strangest Mini-Sized Devices
I used to have this roommate in college who was convinced that, because I was a small girl, I loved all things small. Travel-sized shampoos, tiny chapsticks, baby animals...there was never any conclusive scientific proof to back up her claim, and while I stand firm on the belief that I don't care how big my stapler is, these mini inventions are kinda cool. My favorite is the gold USB drive which is the size of a quarter. Oh, it's also called "Petito", which I think is cool.
Next up: Top Ten Strangest Lego Creations
My brother and I used to love Lego's. We stood in grave envy of my cousin who had turned their entire basement into a giant LegoLand with towns, ships, bus stations—everything. And, as a lover of StarWars, (the first three...or, I suppose the last three, depending on how you look at it,) my favorite strange Lego creation would have to be Han Solo frozen in carbonite.
Last up: Top Ten Strangest Office Gadgets
This is my favorite Top Ten entry so far. My three favorite gadgets are (in order):
Penny likes the head massager; James wants the air darts. What would you want for the office? :)
Have fun with the links—we'll see you back here on Monday!
