We weren’t disappointed in Mr Chaney’s latest one bit here at Slabbed mainly because we knew what our favorite captured insurance regulator would be doing with this latest Farm rate up. The comments in yesterday’s story and today’s Op-Ed about Mr Chaney being a puppet for big insurance pretty much sums up local popular opinion:
You tell your boss you want a 45 percent raise, but you are unwilling to do any extra work to get it. Your boss, fearing the loss of your services, manages to scrape up enough money to offer you a 19.5 percent pay increase and begs you to stay. You take the 19.5, but you make it clear that you are “disappointed” and will do less work.
Fantasy?
Not if you are an insurance company doing business in Mississippi.
Beginning in mid-February, State Farm Fire & Casualty Co. has Mississippi Insurance Commissioner Mike Chaney’s permission to raise homeowner insurance rates 19.5 percent in the three Coast counties. State Farm had asked for a 45 percent rate increase and said it was “disappointed” not to get it.
The higher rates will apply only to current policyholders since State Farm is not adding to the more than 20,000 customers it insures against wind damage in Hancock, Harrison or Jackson counties. In fact, State Farm plans to drop wind coverage from 1,800 policies in surge-prone areas.
Would anyone care to guess what Chaney will do with Allstate’s pending request for a 65 percent rate hike statewide?
29.5 percent? 31.75 percent?
Whatever it is, it will, like the State Farm rate increase, make the barrel so many homeowners are under even heavier.
In granting the State Farm rate increase, Chaney said “ … our role is to make sure the rates requested are not excessive and are justified and actuarially sound. I believe we have fulfilled that role.”
Not excessive?
Justified?
A nearly 20 percent rate hike in the midst of the Great Recession and after several of the calmest hurricane seasons on record?
There has to be a better way to do this
Perhaps this is the best Chaney can do.
But if he is in fact doing the best he can for Mississippi ratepayers under the current structure of insurance regulation, then that regulatory structure is woefully inadequate for the survival, much less the recovery, of the Coast, not only from Katrina but also from this economic downturn.
- What has become of Chaney’s effort for a regional approach to insurance coverage for areas prone to hurricanes?
- What has become of private sector plans, notably Travelers, for making life less risky for both the consumers and providers of insurance?
- Why are Congress and the Obama administration so reluctant to deal with a problem that has the potential to affect more than half of the nation’s population which lives within 50 miles of a coastline?
Common sense, not to mention mortgage companies, dictates that homeowners insurance is not optional. Yet here and all along the Gulf and Atlantic coasts there is the dual dilemma of affordability and availability.
This situation merits as much attention and action as health care, yet receives but a fraction. Why?
Sop, I am not in a position to know what the availability is on the MS Gulf Coast. Based of the your question about Travelers it indicates there are few carriers offering coverage there.
If that is the situation, Mr. Chaney is in a difficult position. I am sure he is not excited about granting these levels of increases on the coast, but wants to retain the SF and ALL presence for existing clients. He has to keep them in market and not possibly “dump” those clients on a market that has no capacity.
I take no position on this, but just reflecting on what might be going on here.
Sup Chaney immediately went on WLOX after the rate filing braying about he wasn’t going to allow an increase and how since the Farm went to him to raise rates he strongly implied he had negotiating power to get them writing policies on the coast again. We said it then and events have proven us correct it was all smoke and mirrors on Chaney’s part.
There are private markets available to any comsumer who uses an independent agent, even for wind coverage especially north of I-10.
The Sun Herald was the only major newspaper in Mississippi to back the insurance industry backed Mike Chaney in 2007. It was unrealistic on their part to believe someone from the revolving door would be capable of the type of innovation required to fix Mississippi’s portion of America’s coastal insurance crisis. It is clear they are figuring that out.
sop
Alan Lange over at Yallpolitics faithfully posted everything that came from team Chaney. The BS doesn’t wear to well with time Sup. I found this link without looking to hard.
http://yallpolitics.com/index.php/yp/post/17732/
Of course Chaney was powerless under the law to stop State Farm but when specific proven problems like domestic abuse denials are brought up in the legislature he finds all sorts of legal authority to regulate insurers. (he also evidently believes domestic abuse denials occur only in the other 49 states.)
http://yallpolitics.com/index.php/yp/post/18972/
I once called President Obama a lying sack of shit for going back on his 2008 campaign promise on coastal insurance. With most politicians the fruit doesn’t fall far from that tree and Chaney isn’t much different from ol’ Barack that way.
We lucky to have someone represent us in Congress who has the integrity not to resort to lying to collect votes. Perhaps there is hope for our political system but I don’t see much.
sop
Sop, you might recall I suggested these national politicians were using you all on the MS Gulf Coast as “props” when Ms. Pelosi showed up. I bet you have not seen or heard much from her lately. She has been very busy spending your and my money on flowers for her office.
All the pols are the same. I do agree with you Mr. Taylor has been very consistent in his position.
It is encouraging there is ample “with wind” availability north of I-10. I agree also the best place to start is with an independent agent for the best options.
Pelosi’s only promise to us was to support multi peril insurance in her capacity as Speaker. She has kept that promise.
Obama lied in March 2008 during the Mississippi presidential primary. Obama also made promises to Floridians during the campaign about insurance he has not kept.
sop