“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”
