Allstate Calls A Halt (to selling homeowner insurance in CT, NJ, DE - hurricane fears)

[Pale Blue Dot]

The insurance companies seem to believe in global warming...

http://www.courant.com/business/hc-allstate1208.artdec08,0,6268567.story?coll=hc-headlines-home

In a dramatic move to limit future hurricane claims, Allstate Corp. said Thursday it will stop selling new homeowners' insurance policies Feb. 12 anywhere in Connecticut - not just at the shore - in a move that some critics said was an overreaction.

Allstate, the largest homeowners insurer in Connecticut, said it won't drop its 121,000 existing home policies here and will keep renewing them. It will also continue to sell new auto policies.

The insurer, which is based in Northbrook, Ill., also confirmed that it will stop selling new homeowner policies in New Jersey and Delaware next year.

<snip>

"The risk of a catastrophic event occurring in New England has increased dramatically," said Tim Knapp, Allstate's Northeast regional counsel.

[marmar]

1. Clearly Allstate believes in global warming......

You'd think they'd lobby Bush harder on doing something about it.

[no_hypocrisy]

2. I could understand this policy (no pun intended) were it based on

projected REGIONAL damage to homes. For example I could see potential claims for Hampton and Virginia Beach, I couldn't see the same risk for Nelson County ("John Boy Country") or Staunton (buried in the mountains), or for New Jersey I can understand Long Beach but not Columbia which is 5 minutes away from the Pennsylvania border.

[SharonAnn]

25. Perhaps to have a license to sell in the state is must be the entire state.

[NotGivingUp]

3. You bet they believe in global warming...and they've

definitely gotten an earful of horrific forecasts for the future. It is not making me feel any safer living here in florida.

[aquart]

4. They already dumped Manhattan and Long Island.

[sugapablo]

5. Makes me glad I sit on a big hill...

...overlooking Pittsburgh. If flood waters reached me, I'd be seeing Al Gore float by in his ark!

[spooky3]

6. did I miss the part on Virginia? I did a search on the page.

[Pale Blue Dot]

9. Sorry, it was Delaware. I fixed it.

I just woke up. :D

[spooky3]

14. ok! Thanks.

:hi:

[boobooday]

7. You can't make money in the Insurance Business

by selling to people who actually need it.

They are just taking a lesson from the health insurance industry.

[Vinca]

10. Bingo - no billions of dollars of profit if there's a risk involved. nt

[WyLoochka]

12. I will be flamed for this

but it is not the property insurance carriers' appropriate function to come to the rescue of people who are living in an area where the risk of a total wipeout is increasing markedly day by day to the point that it is almost a certainty at some point in the not too distant future. Property insurance carriers don't take on risks for which the likelihood of occurrence is approaching 100%, nor should they be expected to. (That's why I am so very much against private health insurance - it is a 100% certainty that we are ALL going to die - so it's foolish to look to a business that has no other way to stay in business but to limit risk for the answers as to how we handle what is a certainty).

The property insurance carriers have been, fairly gradually, moving back from the entire east and gulf coasts for over a decade due to climate change and it's projected paths of devastation. Now they are escalating the pull backs. I am sorry to tell you but this makes total sense. Instead of railing at the carriers for doing what any business would and should do, not expose the industry to much more risk than it could ever be equipped to handle, take the hint. This is not going to get better, that is what those pull backs are telling you. You are not going to be able to rebuild and rebuild and rebuild over and over and over again. There is no conglomeration of financial institutions that can possibly foot the bill due to the scale on which these events will occur.

People have to start looking at this realistically. It would have helped had the right winger fossil fuel moguls been honest about this all along, but we know they were as dishonest about climate change as they were about going into Iraq after the oil. Despite the delays in learning the truth, people have to start making really difficult decisions about where they are going to live over the coming decades.

We need to face facts and start looking at the necessity of people, being forced by circumstances totally beyond their control, to start making massive migrations away from the entire east and gulf coasts.

We cannot build dikes and leevees high enough or strong enough to protect the thousands of miles of property that will be devastated from what is coming.

Our money and efforts would be better spent identifying clearly areas that will become uninhabitable and start educating people about it and then start moving people out of them.

The greatest challenge presented by climate change, here and all over the globe, will be the massive migrations that will be necessary. We will either address this head on or dilly dally extraneously with blaming the propety insurers and have to experience katrina type devastations to people on a massive geographic scale. I'll bet we dilly dally some more.

[Pale Blue Dot]

13. No flames from me - you're exactly right.

Great post.

[boobooday]

15. What you say is true

But I believe my point is still valid about health insurance.

In this case refusing to sell insurance may discourage people from building in unsafe areas (although someone said the policy affected the entire state), but it is an immoral model for health care.

[WyLoochka]

16. I agree

this is an immoral and very corrupt model for health care. We need to put the huge fat, totally unnecessary middle man - the private health insurance industry - entirely out of business and move to single payor.

[pitohui]

20. do you understand that in 2005 allstate had $1.77 BILLION in profit?

says the ceo of allstate in feb 1, 2006 chicago sun-times:

"For the year, we were able to earn a profit after being hit by three of the 10 most costly natural disasters in U.S. history," noted CEO Edward M. Liddy

one quarter in 2006 was allstate's most profitable quarter ever

they are not losing money, they are making it hand over fist

this is pure-dee extortion to make the states fall in line and give even more outrageous concessions than they already have

THAT'S the facts we have to face

i'm tired of the apologists for this industry, global warming has not hurt this industry at all, it has given them even more excuse to gouge us for every damn penny

[acmavm]

27. It's like people who intentionally build in a flood plain (or in the

case of the nimrods in Nebraska) or on the banks of the Platte River.

[pitohui]

29. wow and why do you suppose people would do that?

did you know that every great city is built on a "flood plain" or on the water for reasons of being able to transport FOOD and coal or other energy to the city?

did you know that even large important cities such as paris and tokyo and london were built on flood plains?

they had a great feature in the new orleans paper recently on the tokyo "swamp" and the levees protecting them from the double whammy of flood/earthquake -- millions upon millions of people and billions in property protected in japan without question, THEY have a social contract, you simply don't leave the other guy to drown in his own attic

you know, it's funny that we supposedly won the world war and yet the guy who was bombed and had nothing has turned out to have more "can do" spirit than america

[sandnsea]

30. Not to mention poverty

In the St. Louis area, it was the very poor who lived on the flood plains. My mom told me how my grandpa would take his equipment and help protect their homes, year after year. I don't know how it is now, because sometimes things change based on 'riverfront views' and stuff. People tend to think of the wealthy with the oceanfront views being the stupid ones getting wiped out, but one of the reasons some of these insurance laws were written was to keep insurance companies from abandoning the poor.

[pitohui]

31. yes you are right

the new orleans feature story said that the very poorest of the poor in tokyo live at the very lowest level, some 15 feet below sea level

i think it was ever thus, that the rich and the oldest families would pick the highest ground first, then the support (the poor working people) would be pushed to the lower lying land

[acmavm]

36. Bullshit. People who build their homes in flood plains like I'm

talking about, and get flooded out every spring, collect from the federal government. That means we pay for their damages. And as has been the case along the Platte River, they turn around and build again. Right where they were flooded out. And it happens again. And we pay again.

Some things are just common sense.

[muriel_volestrangler]

37. Then why bring this up in relation to Connecticut?

Do you really think the whole state (and all of New Jersey, and Delaware) are now going to get flooded every year? Or hit regularly by hurricanes?

[pitohui]

38. this person, to put it kindly, does not have facts straight

you are not allowed to rebuild and collect year after year, in areas that consistently flood then you are given a choice of being "mitigated" or else being refused insurance forever after a certain (small) number of flood events

the people in grand forks were mitigated, i've talked to people who were face to face

this means their property was purchased for some fraction on the dollar, probably around 75 percent, and they had to move somewhere else -- they didn't profit from this, they lost money, but at least they got enough back on their houses not to be completely wiped out and unable to ever start over again forever (which is the purpose of gov't and insurance, i would have thought)

if someone is repeatedly rebuilding in an area that consistently floods they don't get the choice of staying there and collecting each year, that is a classic Big Lie and i would love to know how much john stossel was paid under the table by big insurance to spread that lie because a lot of very ignorant people seem to believe it or pretend to

[No Exit]

8. St. Paul/Travelers is ending any coverage of New Orleans commercial insurance

..because they don't trust the new levees being built. The re-building of the levees is supposed to protect against hurricanes up to Cat. 3 (but not Cat. 5.)

So, upon hearing this thing about N.O., we at my house were sitting around joking, "Well, insurers'll have to pull out of the great plains--might be another dust bowl--and they'll have to pull out of California--earthquakes--and there are some places with very heavy snowstorms...well..."

Well. Looks like our jokes weren't so much of a joke, after all.

And now you will hear me uncharacteristically plug a repukelican senator. (Okay, he's a repuke asshole, but... sometimes we get a break anyway.) Some weeks ago, before the election, Trent Lott was quoted on the front page of the NYT, saying he wanted to look into passing certain legislation to curtail certain overreaching by insurance companies.

Of course, we know why Trent was looking into this--he'd been mugged by insurance companies regarding his lost house on the Mississippi gulf coast.

Wingnuts always say, "A conservative is a liberal who's been mugged." This is a reference to liberals' insistence on basic rights for criminal defendants. Wingnuts will often say something like, "Well, if that liberal had been the victim of a brutal crime, he/she would come around very quick!" (spit)

I say, a "liberal" (yes, unbelievable as it sounds, they will accuse even Trent Lott of being liberal if he goes off the reservation, even on only one issue) is a conservative who has been forced (however briefly) to undergo some of the CRAP that the "common people" (that's us, folks) have to put up with every day, every hour, every year. Welcome to the real world, Trent. Now get busy on that legislation!

The best part of the NYT article was the reply of the insurance companies to Mr. Lott's statements: "We think the senator is misusing his prominent position to unfairly target the insurance industry.":rofl:

Yeah, boy. "Misusing" his position as a senator to do OUTRAGEOUS, UNFAIR things, like... pass legislation, or something!

Much as I hate to say this, anyone who is directly affected (screwed) by this new announcement of Allstate's should contact... Trent Lott's office. (But if that's too distasteful, I am positive there are numerous democrats who are also disgusted with insurance companies' overreaching.)

[lynne]

11. Allstate, State Farm and Nationwide took the biggest hits -

- during Katrina as the Big Three direct-write insurers. I would not be surprised to see all three make underwriting shifts and restrictions in NO and on other coastal states with regard to property insurance.

This portion of the article was interesting: "Allstate said its decision on Connecticut sales is the result of lengthy consideration and does not stem from new rules that Insurance Commissioner Susan F. Cogswell announced Tuesday. The rules restrict insurers' ability to drop or refuse policies along the coast and require them to give consumers alternatives to installing expensive permanent storm shutters."

Baloney - that had EVERYTHING to do with it or they would have just restricted coverage at the coast. The intent is to reduce property wind damage losses and the vandalism losses that occur after a catastrophic event. Since when is western Connecticut in Wind Tunnel Alley? Even with a hurricane, inland property would receive far less damage. And there is no water/flood damage exposure to be concerned with as that is specifically excluded.

The companies are attempting to retain their reinsurance carriers and their AM Best financial ratings by greatly reducing their property risk exposures. Once their coffers have recovered from Katrina, they will again reopen underwriting to these locations. It's not uncommon to see this after a huge catastrophic loss and Katrina was the largest CAT loss that insurers have ever faced.

[juajen]

17. Yeah, but in a lot if cases that could be too late

Our premium for a 3/2 house, not fancy by any means, is $175.00 per mo. I'm in Lafayette, LA. Our insurer is Allstate. They've advised us that our premium will go up again next year. They are not writing any new policies down here. At least, that's what they told us. I can't afford this high premium now. Don't know what I'll do next year.

[KamaAina]

18. P.O.'d Louisianians are calling them "Somestates"

http://ashleymorris.typepad.com/ashley_morris_the_blog/2006/11/the_new_orleans.html



One NOLA blogger, and occasional DUer, even semi-seriously proposed that Louisiana retaliate against them by invalidating their auto insurance, thereby forcing travelers to stop at the state line and buy temporary insurance, just like at the Mexican border!

http://wetbankguide.blogspot.com (scroll down to post of Nov. 17)

It's time to simply throw all of the bums out of the state, and move everyone into a state pool for all insurance: property, life and casualty, auto, busines continuation: everything. If the national companies will not write property insurance, I see no reason to allow them to continue to profit in other business lines.

We can expand our market pool by refusing to recognize out of state auto policies, for example. Visitors would be able to purchase temporary coverage at the visitors centers in the same fasion people driving into Mexico purchase insurance from Sanborn. Transportation companies would purchase insurance for their Louisiana routes and deliveries in the same fashion that multi-state companies purchase workers compensation insurance, on a state by state basis.

It will surely come as cold comfort to them that even Northern states are now also being redlined (that's what it is, you know).

edit: added choice Wet Bank quote

[LafayetteTGR]

39. I'm in Lafayette also

We were insured with Allstate and they are dropping us. Try calling Liggio Insurance here in Lafayette. They got us a better deal with another company and the price was very reasonable.

I really hate the way some people think that it is so easy to move away from a place you were born and raised. Many of the people that I grew up with are extremely poor and crawfish for a living. Since Allstate is not insuring anyone south of I-10 anymore, these people would have to move far away from their communities and the jobs that support them. We do not get hit with hurricanes very often and the insurance companies have made a killing all over the country. I think there should be more outrage at what they are doing to people who have been paying faithfully and cannot just move away after one bad hurricane season. Furthermore, somebody has to live along the coast because coastal jobs are essential to this country.

[lynne]

21. Check the yellow pages for an INDEPENDENT AGENT -

- who represents several insurance companies and call a few agents for quotes. Independent Agents represent many different insurance companies and have more options than "direct-write" agents like Allstate, State Farm and Nationwide.

Good Luck!

[pitohui]

22. allstate had a $1.77 BILLION profit in 2005

see my post above

go back and check their quarterly reports in the financial press

some "hit"

[LibertyLover]

19. We have Allstate homeowners insurance and I just got a notice

from them that they are increasing it by a bunch because I live in Maryland, fairly close to the Chesapeake Bay. If they are doing this in Connecticut, I'm sure that it's just a matter of time until they drop Maryland as well. How lovely.

[pitohui]

23. they love global warming/hurricanes because it gives them an excuse to extort the customer

do not be fooled, they are making money hand over fist

after all the shouting was over, allstate netted $1.77 billion in profit in 2005, they are getting away with murder because of pressure from the headline skimmers who erroneously believe this insurer lost money because of the storm

they are liars

the state of louisiana is trying to figure out what to do with these insurance companies who applied for special concessions, only to reveal that they were profitable and that they had exaggerated their "loss" -- too bad we can't get more press and more light shone on this crap

[flyarm]

33. I LIVE ON BEACH IN NJ AND FLA....YEPPPPPP...

ALWAYS SAID I WANTED TO RETIRE beach to beach..........AND IN NJ we could only get Lloyds of london..

but we have lived in kansas and missouri..where we faced tornatoes...

and in 1994 we lost our home in the valley of LA in the northridge earthquake..

and i will tell you this..you never ever understand your insurance fully until you need it..and until you go through a catastrophe.

only then do you understand each and every word..and what those words mean by how they are placed in that small print!!

do not just sign the papers..do yourselves a favor..spend a litte extra money and have a lawyer read a policy before you buy...and make sure you get exactly what you want and need!!

fly

[jpak]

24. But..but..but Global Warming is the Greatest Fraud ever perpetrated on the 'Merican Peoples

So sez the RW of the GOP...

Et tu Allstate?????

[slackmaster]

26. Relax, they tried the same crap in California after the Northridge Earthquake

All your state government has to do is say:

"If your company doesn't offer homeowner's insurance, you can't sell ANY insurance or other financial services here. Have a nice day!"

YMMV. Here our Insurance Commissioner already had the legal authority to do that.

[pitohui]

28. yep

allstate has already said they won't drop you if you have your car insurance with them also, i've had two large natural disaster claims in 3 years and my homeowner's was so far knock on wood only marginally increased, the biggest increase came after ivan which didn't even hit here!

homeowner's has ALWAYS been a loss leader, go back and read the insurance/financial literature from the 90s where this was frankly admitted

they are actually using this issue of global warming/disasters to increase their profit on a product that was never formerly intended to be profitable but was rather there to "tie" the homeowner (a better risk than the renter) to buying their auto and gimmick insurance such as umbrella policies

[Jennicut]

32. Okaaay...CT has not had a major Hurricane since 1954

I live in Connecticut and have Liberty Mutual Home Insurance and never once have we ever been told that we live in a hurricane-endagered state. Our last big hurricane was like over 50 years ago (Hurricane Carol..it blew Katherine Hepburn's house away) and the last hurricanes to really hit this state was Hurricane Bob in 1991 (it was jsut in the south eastern corner) and Gloria in the 1985 when I was in elementary school! I remeber riding my bike in the eye of the storm with all my neighbors. I know, it was a dumb thing to do but our parents let us do it. Anyways, we are not a really at risk state considering we are on the east coast. This is really dumb! I live more towards the north western corner of CT and am way closer to Mass then to the coast line! What a bunch of jerks but I did call them for a quote 5 years ago when my husband and I bought our house and they were WAY more expensive than most of the other insurance companies so why anyone in NEw England would have any insurance with them is beyond me.

[IndyBob]

34. Too broad an approach

to a more granular problem. To take an entire state off the roles is too much.

I can't have too much sympathy for the insurance companies. My company's headquarters is modest, but in the same town the insurance company is the Taj Mahal. Marble halls, commissioned art, is their office approach.

[pitohui]

35. too broad an approach if a disaster was the concern

however if you look again, the reason for taking CT off the rolls is to extort higher premiums and more favorable regs for the insurance companies -- THAT'S the purpose by striking off entire states, to blackmail the states

this ain't about the storms, and it's naive to think it is

allstate insurance had a $1.77 BILLION profit in 2005, which was the longest, most expensive, and disastrous atlantic tropical storm season in all of human history, and included super storms such as katrina, rita, and wilma

$1.77 BILLION profits in their worst year -- and it ain't enough for them

no pity here