The Mobile Press Register reports on an idea under consideration next door in Alabama. Let us know what you think about the approach.
New Alabama Insurance CommissionerJim Ridling said Tuesday that Gov. Bob Riley’s administration is mulling plans to subsidize homeowners’ insurance in Mobile and Baldwin counties, a potentially major shift.
“I’m a capitalist, and I believe in letting markets run, but when it doesn’t work, you have to look at some other things,” Ridling said.
Ridling, appointed in September to replace outgoing Commissioner Walter Bell, made the announcement in a meeting at Theodore High School , where he faced angry and anguished questions from nearly 200 attendees.
He indicated that among possibilities would be to provide subsidies to help residents cover high deductibles. He also indicated that the state would consider giving tax credits or rebates to Mobile and Baldwin residents whose rates are much higher than statewide averages….
I suppose every plan has a slippery slope – not as slippery IMO as the slope folks are on when they can either afford a house or insurance but not both. Ridling heard that story, too.
Ridling warned that spending state money to help coastal residents pay for insurance would be resisted by the rest of the state.
“The subsidy road is a fairly slippery slope and it will not be an easy road to get things done,” Ridling said.
It’s not clear from where the money to fund such a program would come, with the state facing a shortfall.
Many people at the meeting said that after four years of rising rates, dropped policies and harder-to-find coverage, they’re ready for more radical action, though Ridling warned that could cause companies to flee the state.
Debra Bell, who lives off Dauphin Island Parkwayin Mobile , told Ridling that her family must carry insurance under the terms of her mortgage. As in many cases, a mortgage company collects for insurance each month as part of the overall payment. She said her rates are set to rise again, possibly making the payments unaffordable.
“I’m scared we’re going to lose our home,” Bell said.
People also complained repeatedly that they were being forced to buy auto and other policies to keep or gain homeowners coverage. Bell issued an order outlawing such practices in February, and Ridling promised to look into the issue.
There were also complaints that companies were charging larger amounts for policies that don’t cover wind damage than people farther north are paying for comprehensive policies.
Louisiana officials began pressuring companies to lower rates on policies that exclude wind more than a year ago. Alabama’s regulators had said they were looking into the situation, but Ridling said he wasn’t aware of the issue. Deputy Insurance Commissioner Ragan Ingram, who attended the meeting, said the issue may have gotten lost in the transition between Bell and Ridling.
A third option was mentioned in the story; but, it’s old news in a new state.
Sen. Trip Pittman, R-Montrose, indicated that a third possibility could call for using state money to provide funding to create a captive insurance company that would write policies in coastal areas. Such a company has been under discussion for several years, but finding money for initial reserves has been a hurdle. Advocates have also sought money from cities and counties.
A much better idea IMO would be to get their Congressional delegation behind our man with a plan, Representative Gene Taylor.