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January 23rd: Well, both the Legislature and the Gov were all smiles yesterday when the insurance session was disbanded. For policyholders, there is promised rate relief. The amount of reduction is 5% to 40% depending on who you talk to and the location of your property. This reduction is being accomplished primarily by the State providing more and cheaper reinsurance.

Citizens, the state operated insurer, will now be allowed to compete with private carriers relative to price, and also Citizens will be able to convert their, windstorm only, policies into multi-peril policies. Citizens, it appears, will be getting much bigger before it ever shrinks.

What about CLAIMS? I have not yet seen the actual 167 page bill. However, there is a provision requirng that insurance companies will have only 90 days to either pay or deny claims. Hmmmm! How is that going to be enforced? In an Andrew, four in '04, or a surprise storm like Wilma, many losses are not even inspected within 90 days. And what does "paid" mean? There are many partial payments.

Carefully checking the coverage will be vital. Hurricane deductibles will be allowed to go up to 10% (such as $20.000 on a $200,000 dwelling). Policyholders, if they have no mortgage, can delete and avoid windstorm coverage altogether. Insureds can also opt to delete and avoid unscheduled personal property.

More soon.

Horace

Only with the proper training, both field and policy, and continuing education, will we even have a sniff of the “New-Revised" concept of adjusting, especially in Cat conditions.

The Carriers have opted to lessen their costs, (and we are a cost), and substitute their methodology of using in house adjusting (Direct deductible costs), to settle claims. The in-house adjusters will have the authority to recommend settlements of claims, while never having seen
them. The claims will be overpaid or underpaid, but will not be properly settled in a fair and equitable manner.

Of course the severity codes will rise and the cost of the Re-insurance will increase, but that again is of no concern, because the re-insurance cost is another direct cost of doing business and then the rise in premiums for this will be passed to the policy holder.

The carriers have it all figured out, and we as a group of professionals, had better wake up to the changes or choose another method of supporting our families.