New Orleans Insurance

[DOGS THAT BARK]

Hmmm --state insurance much higher than privite carriers---is anyone surprised? Find one area where it isn't!


http://www.breitbart.com/news/2006/05/08/D8HFNGUO1.html


With private insurers pulling out, buyers are overwhelmingly forced to seek coverage from the state-run Louisiana Citizens Property Insurance Corp., which charges higher rates than its private-sector competitors. For 28-year-old Boulanger, a construction manager, that means he'll pay over $4,000 this coming year to insure the home he's buying for $240,000

 

[kosar]

Yes, but...ummm...'private insurers are pulling out.' So if there is not a 'private' option because they pick and choose who they will cover (at any price), then the options become limited.

I assume it's the same in NO as it is here. The government insurance is the LAST resort when NO private carriers will actually carry you because of the risk to them of actually having to pay out.

If the government, in this case, is charging more than any private carrier there that is still writing policies, then why would anybody use them?

 

[DOGS THAT BARK]

I would say in area of high risk pools such as state health coverage you would be correct--but don't it would apply to P&C in general.
There are some as in your state where Fla Windstorm is the only carrier for hurricane coverage I believe.

Be that what it may--you really don't think gov run insurance programs would be more cpmpetative that privite sector--do you?

 

[kosar]

Be that what it may--you really don't think gov run insurance programs would be more cpmpetative that privite sector--do you?

Probably not, in general, but your example is a poor one.

Private companies have the luxury of picking and choosing who they cover. The state coverage here is only a last resort. Maybe i'm a little biased being down here. They happily collected and invested many, many bilions of dollars for 12 years from 1992(Andrew) until Charley and the other storms in 2004. Then they want to immediately drop coverage in the coastal areas, barrier islands and areas in flood zones, leaving many to have no choice but to get coverage from Citizens, our state insurance.

You know a hell of a lot more about insurance in general than myself, but trying to make the point that government insurance is more expensive in this case and really, anything to do with hurricane zones, doesn't work.

Private carriers bail out as soon as the first claims come rolling in, or else they try to get 30-40% increases approved every year. And that's for people in low to medium risk areas inland.

When private carriers bail, what choice do those people have?

 

[DOGS THAT BARK]

"When private carriers bail, what choice do those people have?"

Which ever carrier is the cheaper as they have to stay competative in free market place--now if gov isonly player there is but one choice.

--would agree though Matt, that is was poor choice to compare, however consider free market and who builds best mouse trap at lowest cost the best alternative for consumer--there is concern with all the buy outs for potenial monopoly in some fields and that would not be good for consumer. The prob I have seen with most gov plans is they pander to what sounds good and often are not actuarially sound resulting in needong tax revenue to stay afloat which make you and I footing bill for ours and someone elses.

 

[kosar]

I agree, but trust me, in Florida the government does NOT want to be in the 'hurricane' insurance business. It is there as a flat-out necessity for many and it *is* necessary due to all the private carriers bailing out or gouging.

Otherwise, literally, hundreds of thousands of people would have no coverage. None. Or at least not at exorbitant rates with extremely low rated companies.

Even though Nosigar has me grading out as being only a lifetime 60% correct(I liked that one... , and he calls me a liberal but knows better), he could confirm this as he lives down here also.

He also probably knows about the 3 private flood insurance companies that didn't have the reserves to continue and now will be folded into the state-run Citizens because their 'cheap' rates.

It's been all over the news here in Florida, but here's an exerpt from a letter I got a few days ago(I am with this 'group', for flood insurance and others are with them for wind as well):

"....regarding the rehabilitation(bail out by the state) of the companies within the Poe group, namely Southern Family, Atlantic Preferred and Florida Preferred. You have probably received a notice of nonrenewal from Atlantic Preferred(that's my 'cheap' private company). (I just paid the premium a few months ago and going into hurricane season just makes it better)

" As we understand the ruling of the DPMT of Financial Services, if it is approved by the court, between now and the end of June, 2006, efforts will be made to move policies to other companies. In the event that this cannot occur, the order allows for the policies to move directly to Citizens(the DREADED government bailout) under your normal renewal period."

The purpose of this notice is to assure you, according to current information, that you will still have your current coverage."
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So without Citizens, the state run program, I would almost certainly be out of luck. And apparently, but with no assurances at all from anybody, i'm covered, despite these 'cheap' private companies going under...or better said, not meeting the fiduciary requirements of the state.