Rebecca Mowbray reported Louisiana homeowners insurance is nation’s third-most-expensive, study says in Sunday’s Times Picayune.
Louisiana remains the third most expensive homeowners insurance market in the nation behind Florida and Texas, according to newly released data from the National Association of Insurance Commissioners.
Mississippi ranked seventh. Expanding the NAIC data with median family income during the reporting period shows Mississippi and Louisiana in last and next-to-last place on a ranked listing of states when state median household income is considered.
Mowbray points out policyholders actually pay more because the numbers do not reflect the cost of flood insurance, which is sold as separate policy.
According to a story in the Sunday Sun Herald, Chaney: Funds will help stabilize pool premiums, a growing number of homeowners in Mississippi’s three coastal counties have the additional expense of coverage from the state’s so-called wind pool:
After Hurricane Katrina devastated parts of the coast in 2005, the number of pool policyholders rose from about 16,000 to about 42,000.
In a related story, Insurance commissioner Mike Chaney says adding $19M into wind pool could stabilize insurance rates, Rep. Brandon Jones, D-Pascagoula, vice chairman of the House Insurance Committee, told the Mississippi Press the subsidies into the wind pool are holding down costs.
“There are fewer companies writing insurance policies along the coast and more people are turning to the wind pool for insurance coverage,” he said…
Jones said the coast needs private insurance companies to compete for the business on the coast.
“Unfortunately, that is not the case right now,” he said.
Represenative Jones’ statement begs the question will it ever be the case. Coast realtor and wind pool board member Mark Cumbest told the Mississippi Press the lack of affordable insurance has a huge impact on the full recovery of the six coastal counties….
Cumbest said the wind pool reinsurance committee members will meet with reinsurers in London and Bermuda in early 2010. After those meetings, the wind pool board recommends rates to Chaney, who sets the premium rates, he said.
Policyholders can reduce their premium rates up to 30 percent by taking advantage of credits given for strengthening their structures, said Cumbest. The credits were implemented in July, he said.
In Low tide, rising rates sink all ships published November 30, 2009, SLABBED quoted a February MID release on the mitigation study and reference the impact those discounts had on rates in Florida, the state with the nation’s most expensive homeowner premiums according to the NAIC data:
The study is expected to have many benefits. For one, it would give leaders a clear cost-to-benefit analysis. As important, the wind mitigation study would allow for systematic improvements in the hurricane resistance of buildings in the six counties on the Mississippi Gulf Coast (Hancock, Harrison, Jackson, Stone, Pearl River and George) by utilizing wind-resistant construction techniques to reduce property damage and/or loss.
This would result in a significant reduction in insurance premiums, as well as reduce the negative economic impact of a hurricane on the entire state and its citizens, the MID said.
Insurers, led by State Farm Florida, are complaining that the discounts for installing shutters and other protections have become so popular that they are undercutting the industry’s bottom line. Last year, citing the cost of the discounts, State Farm asked for a 47.1 percent rate increase.
Robert Hartwig, naturally, had the spin: “There is no other place on the planet with such a high concentration of risk,” said economist Robert Hartwig, president of the industry-backed Insurance Information Institute.
There is also no place in the nation with a population less able to withstand higher premiums than Mississippi with the nation’s lowest median household income.