Insurance costs hit home, for all of us – including the good neighbor and LA Insurance Commissioner Donelon, too

“One thing is certain.  The more we all spend on insurance, that’s less money that we spend on other things, like cars, and refrigerators, and clothing.  Until the problem is solved, our recovery will never be complete…”

WLOX reporter Doug Walker hit the road for a week in January to learn more about the insurance situation and found Insurance costs hit home, for all of us.

During my travels, I met a widow whose insurance bill has climbed from $2000 a year in 2004 to more than $7000 now.  Another homeowner was told his insurance was going up from $2400 a year to $6300.  He finally got a policy through an independent broker with Lloyd’s of London for $4000.  The list goes on and on.

Indeed, the list does go on and on and, as Walker points out, insurance cost is not just a Mississippi issue.  State Farm found that out yesterday and Rebecca Mowbray caught the story for the Times Picayune – Insurance Commissioner Jim Donelon rejects 19 percent statewide rate increase request by State Farm.

“This is an out-and-out rejection,” Donelon said. “We’re so far apart, we don’t feel like there’s a reasonable chance for compromise.”

State Farm, which is free to submit a new request, said that it was stunned and disappointed by the rejection…

If the request had been granted, State Farm would have been able to collect an additional $67.6 million from its customers in Louisiana. (emphasis added)

State Farm’s requested increase would have pulled $67,600,000 from Louisiana’s economy.  Calculated for the items listed in Walker’s post,  there would be  2380 fewer new cars purchased or 56,333 new refrigerators sitting in stores – or, worse yet,  the 781,403 school-age Who Dat’s would not be wearing a replica of Drew Brees’ Super Bowl jersey.

Donelon’s rejection is the culmination of a battle that has been brewing over the past year over State Farm’s use of a hurricane computer model that seems to project a need for much higher rates than its competitors. Continue reading “Insurance costs hit home, for all of us – including the good neighbor and LA Insurance Commissioner Donelon, too”

What a coincidence – State Farm files for 19% rate increase in Louisiana!

Table created with data from the Daily Comet

After MID awarded State Farm a 19.5% rate increase, the Company decided to forgo the shock ’em  first approach it brought from Florida Mississippi- …and the score in the State Farm game was 45-19.5…– and go with a 19% requested increase in Louisiana.

The Times-Picayune carried the AP story; but, hanging on Editilla’s Ladder was the more detailed story in the Daily Comet.

“State Farm, Louisiana’s largest homeowners insurer, has asked regulators for a 30 percent rate increase for policyholders in Terrebonne and Lafourche parishes.

Coastal parishes would take the brunt of the proposed increases, which average 19.1 percent statewide.

The Louisiana Department of Insurance will consider the request, which could generate $67.6 million, or an average of about $229 per Louisiana policyholder. The company has about 296,000 policyholders in the state…”

This brings us to the part of the story where things start to go fuzzy, shall we say.  Continue reading “What a coincidence – State Farm files for 19% rate increase in Louisiana!”

“no class” in Citizen’s hearing

What was scheduled as class action hearing on $35million Citizen’s settlement turned out to be a display of “no class” at all.

Rebecca Mowbray has the story – and I can’t help but wonder what she was thinking yesterday as she was typed Judge orders lawyer to jail after fight breaks out in Citizen’s class action hearing.

A fight broke out this morning at a hearing in a class action lawsuit against Louisiana Citizens Property Insurance Corp., ending with one lawyer on the ground and another being ordered to spend the night in jail.

Attorneys J. Robert Ates and Madro Bandaries exchanged words at Orleans Parish Civil District Court, then suddenly appeared to be on the verge of a fistfight when Bandaries fell to the ground.

Some attorneys stepped in to break up the fight while others ran outside to alert security and find Judge Kern Reese, who is presiding over the hearing.

Reese ordered Ates to spend a night in jail and pay a fine of $100, despite his pleas to be allowed to offer his testimony. Ates, who is representing an objector to the proposed $35 million settlement, was taken away in handcuffs.

“The one thing I am not going to tolerate is lawyers being unprofessional,” Reese said after taking testimony from several witnesses to the fracas and concluding that Bandaries, who brokered the proposed settlement, had been attacked.

Today’s hearing, which is ongoing, is being held to determine the fairness of the proposed $35 million settlement of charges that Citizens didn’t handle claims quickly enough after Hurricane Katrina. If the settlement is found to be fair, it will pave the way for the settlement to be finalized.

Attorneys in a rival class action suit in Jefferson Parish say the settlement in New Orleans shorts policyholders and raids their effort. Their case has a summary judgment hearing scheduled for January and a trial date in March.

At this writing, Insurance Commissioner Jim Donelon is on the stand.

Will update as information becomes available.