They read us down there in the Deep South. And that could maybe save Barnstable property owners a pocket full of money on home insurance. All it might take is a national coastal coalition of fed-up ratepayers.
Unfortunately, coastal homeowners, despite all their griping and little else, aren’t that easy to coalesce.
We got a note from a Mississippi congressman’s office after our business page carried an interview recently on Paula Aschettino’s 6,000-strong, grass roots Citizens’ for Homeowners’ Insurance Reform, which has been jousting with this state and insurers for several years over the roughly 400 percent increase in the Cape’s coastal insurance premiums and/or blatant abandonment by private insurers.
The office of U.S. Rep. Gene Taylor of Mississippi’s 4th District, which was pummeled into crisis by Katrina, wanted us to get them in touch with Mrs. Aschettino. We did. But we also perused the congressman’s Web site containing considerable information about insurers and their propensity to, in the congressman’s terms, “screw” the premium payers.
“People who played by the rules and expected insurance companies to play by the same rules got screwed,” Taylor, a Democrat and ex-Coast Guard search and rescue boat skipper, has said in the wake of Katrina. But more than talk, he has filed a bill, HR-1264, the Multiple Peril Insurance Act of 2009 that, in summary, would allow coastal homeowners for the first time to buy a comprehensive government policy that covers flood and wind damage, which is not now the case.
That would end, he says, the private insurance industry’s “lengthy disputes over how much damage was caused by wind and how much by flooding,” a legal knot that has slowed or negated payment of claims and impeded recovery from the storm’s devastation to this day.
Taylor notes that insurers dealing with Katrina policyholders admitted in court that, ”We wouldn’t pay a dime…unless sued.” He notes a major insurer’s directive to claims adjusters that “Where wind acts concurrently with flooding to cause damage to the insured property, coverage for the loss exists only under flood coverage, if available,” often leaving wind insurers off the hook. The insurers call that an “anti-concurrent causation” clause often found buried in their contracts, Taylor says.
The public should know that government flood coverage was initiated in the ‘60s as a safety net only after private insurers bailed out, a precursor of what is happening today on Cape Cod with wind insurers either unceremoniously dropping coastal home policies altogether and/or increasing rates along with ridiculous deductibles that hardly make the insurance worthwhile.
“Insurance companies have jacked up premiums and reduced coastal risk from Texas to Long Island and Cape Cod (as) more property owners have no alternative other than state wind pools, the states’ insurers of last resort,” Taylor says. In Massachusetts, everybody knows that last resort insurer by the acronym FAIR, which has been described by a spokesperson in Atty. Gen. Martha Coakley’s offices as “…not really a fair plan” for its continuing demand for rate increases in the face of millions in profits.
While Taylor says insurers failed in their mission to protect homeowners by denying claims after Katrina, “property insurers had $48.8 billion in profits in 2005, $67.6 billion in 2006 and $67 billion in 2007.”
A spokesperson from Rep. Taylor’s office said last week a “reaching out” conversation had been held with Aschettino, alerting her to the existence of an ally in the Taylor bill and to US. Rep. Barney Frank’s support for it. Taylor’s Web site, by the way, contains substantial information on the insurance industry and its particular mistreatment of coastal policy holders, along with a five-minute film to help along.
Aschettino’s effort to move politicians and bureaucrats in this state to the point of actual relief from high home insurance rates in coastal areas has not been rewarding, even though the end of the state’s rate-setting policies in the auto insurance sector did open that field to competition with more insurers returning with lowered rates.
Taylor’s spokesman noted one particular question asked by Aschettino regarding Taylor’s bill. What would it cost? It’s a question that can’t be answered with certainty until it moves along…if it ever does.
Similar to the health care issue now raging, Taylor’s bill injects more government into private industry’s domain, a prospect that conservative radio talk show hosts now running the country will not allow.
Coastal homeowners complaining about high or no insurance will either sit by or actively support Aschettino, Taylor and those of their ilk who are providing rallying points for fairness.
Those interested in learning more about Taylor’s plan and the effects of Katrina can visit www.taylor.house.gov/insurancereform instead of being browbeaten with misinformation from television’s fact-bending opinionators.