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.
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.”
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?