Tuesday, February 13, 2007

Can't win for losing

Homeonwers who elevate their houses to conform to new flood maps may lose their standard homeowners insurance, says a story the Times-Picayune unfortunately buried on the money or business pages.

To make it as resilient as possible against any future storms, [Pat] Fitzpatrick is rebuilding with rebar and concrete pilings, and he is raising the house another two to three feet, as required by the new flood advisory maps from the Federal Emergency Management Agency to maintain flood insurance coverage. When he's done, the house will be eight to nine feet off the ground.

But Fitzpatrick is encountering opposition from an unlikely source: his insurance company. Allstate told him he's ineligible for homeowners insurance if he raises his home.

"I'm actually rebuilding higher than it was before, but now they're saying, 'We have a rule that if it's four feet above the ground, you've got to get the state plan, the Citizens plan, and it's always been that way,' " a dumbfounded Fitzpatrick said

This may come as a surprise to many homeowners who are elevating houses all across the city. What is truly amazing is that this may comes as a surprise to Insurance Commissioner Jim Donelon, as the story points out that "Allstate refused to speak for this story, saying ... its underwriting rules are a secret. "

So, the only way to discover the secret underwriting rule is to elevate your house as directed by the government and then have your insurance cancelled. In wonder what other secret rating rules you would discover if you nailed an Allstate agent's hnd to a railroad crosstie and dangled a claw hammer in front of him as the distant train horn grew increasingly loud.

And the more people get their insurance canceled, the better off everyone is, because everybody has a share!

It's the best there is, that Catch-22...
I don't think it's as bad as all that. There are insurance companies that will no longer write policies in Louisiana, and this is just an excuse to ditch homeowners with continuing policies. And Allstate? Dude, you're better off without them anyway.


What kills me is that in the same article Donelon says:

"Frankly there's nothing I can do to change private industry as to whether to insure or not to insure," Donelon said. "If I were to attempt to either legislate or order on some basis under my authority as commissioner that companies write these risks in contravention of their underwriting guidelines around the country, it would certainly have a detrimental effect on the market and companies' willingness to write business in South Louisiana."

hmm. How about make them publish their secret underwriting rules! Oh, then they might stop writing in Louisiana....

we need a state sponsored insurance solution and we need to bar Allstate and every other insurance company from doing ANY business in LA.
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