2009 AUTO HAIL REPAIR INSURANCE TOTALS

State Auto posts loss for second quarter

Tuesday, July 28, 2009 11:35 AM

THE COLUMBUS DISPATCH

State Auto Financial Corp. today announced a loss for the second quarter of $3.2 million, or 8 cents a share, similar to the results from the year-ago quarter.

KDVR Web Staff

July 27, 2009

11454 W. 44th Ave. Wheat Ridge, Colorado. (July 21, 2009)

Recent Colorado storms' costs lash insurers

Damage claims in June and July top half a billion dollars, most expensive season since '90

By Tom McGhee
The Denver Post

Posted: 07/28/2009 01:00:00 AM MDT

Insured damage from storms that pummeled the Front Range last week and in June tops half a billion dollars, making this the most expensive storm season since 1990, the Rocky Mountain Insurance Information Association said Monday.

Residents in communities hammered by wind and hail late the night of July 20 have so far filed about 52,400 claims, with 19,500 of them for damaged vehicles, said association executive director Carole Walker.

The remainder were homeowner claims, for an estimated $350 million in insured losses.

The storm uprooted trees, blasted out windows, peppered property with golf-ball-size hailstones and left its heaviest damage in Arvada, Lakewood, Englewood and Wheat Ridge.

It followed a week of severe weather in early June that caused an estimated $161.1 million in damage in Aurora, Parker, Centennial and Fort Collins.

Since the storm of July 20, some insurance companies have set up mobile claims units in areas where damage was severe.

"Claims are flooding in," Walker said. "People need to be a little bit patient, but the insurance companies are putting extra resources in to handle this."

About 210 cars a day have been filing through a drive-through State Farm unit in Lakewood, said State Farm spokeswoman May Martinez Hendershot. "There are 10 lines going from 7 a.m. to 7 p.m.," she added.

The costliest storm in Colorado history struck on July 11, 1990, and caused $625 million in insured hail damage. Adjusted for inflation, that would amount to about $1 billion today, Walker said.

The second-costliest storm was June 13-14, 1984, with $276.7 million in hail damage, or about $536.9 million in today's dollars.

The July 20 storm dropped about an inch of rain in less than 30 minutes and spawned two tornadoes that touched down briefly south of Castle Rock and in Englewood. Neither twister caused significant damage.

"Adjusted for inflation, this would be the third most expensive storm, but it is the second most costly in payouts," Walker said. "The type of damage runs the gamut from hail dimples on cars to cars totaled, to trees falling on roofs causing structural damage and roofs being destroyed."

The damage could have been worse had the storms hit during the day, when more cars would have been on the road.

The peak months for hailstorms, which generally account for the greatest amount of storm damage in Colorado, are June and July. But the state's weather is unpredictable, and there have been catastrophic storms as late as October, Walker said.

A storm in October 1998 resulted in $84 million in insured damages.

Residents should check their policies to determine whether they have sufficient insurance coverage, Walker said.

"We are not close to being out of the woods on weather in Colorado," she said. "Look at your insurance, look at your deductible, sit down with an agent and make sure you are insured to value — what it would cost to repair and rebuild your home."

Tom McGhee: 303-954-1671 or tmcghee@denverpost.com

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A COMPANY TO WATCH MARKET FORCES ARE MOVING BEHIND THEM

BOSTON - (Business Wire) Catastrophe risk modeling firm AIR Worldwide today announced that it has updated its insured loss estimates for winter storm Klaus based on additional wind speed data analyzed from more than 700 weather stations across France, combined with the detailed data collected by AIR’s post-disaster survey teams, which were dispatched to affected areas of southern France immediately after the storm. The new findings have resulted in an updated estimate of insured property losses in France of between 500 million and 1 billion Euros. These losses represent damage to buildings and contents of onshore residential, commercial and agricultural properties. (Note that the agricultural line of business in the AIR model does not include losses to commercial forestry, but rather damage to agricultural buildings and their contents.)

“Klaus was the most intense storm to affect France since Martin in December of 1999, which caused an estimated 2.5 billion Euros in insured losses in France at the time,” said Dr. Peter Dailey, director of atmospheric science at AIR Worldwide. “Klaus’ wind speeds broke several records across southern France. However, while the maximum wind speeds form Klaus were in some cases higher than for Martin, Klaus’ footprint of damaging winds was more narrow.”

Residential properties, dominated by unreinforced masonry construction with low-pitched roofs, suffered a fairly high incidence of minor roof tile damage (as much as 10% of properties in some areas visited). Clay roof tiles, common in southern France, are often not mechanically attached to the roof and thus can be blown off by high wind. Tiles at the corners and ridges experience the highest wind load, and indeed this was the most common type of damage observed. The teams also observed damage to the undersides of roofs with large overhangs, where wind can be trapped to create localized loads of upward pressure.

For commercial properties, the most common type of damage observed was to light metal construction in which sheet metal roofs and siding had been peeled away during the storm. Long span structures are particularly vulnerable, even at low to moderate wind speeds.

“Severe structural damage caused directly by wind was rare, which is consistent with expectations given the reported wind speeds and dominant construction types,” continued Dr. Dailey. “However, there were many cases in which trees had fallen onto properties, causing more significant structural damage. At a campsite in Saguinet in the department of Landes, an estimated 150 caravans (mobile homes) were destroyed by downed trees. Forestry officials estimate that over 60% of trees in Landes, which was the source of about a third of France’s lumber production, were destroyed.”

The survey team saw widespread damage to power and telephone lines caused by downed trees. Nevertheless, losses to utility companies may be significant. At the height of the storm, more than 1.7 million households in France were without power and the AIR survey teams saw utility repair crews on virtually every road they traveled. While the AIR survey teams did not observe significant damage to large numbers of commercial properties, Business Interruption (BI) losses remain an unknown—and relate, at least in part, to the power outages.

Dr. Dailey added, “In general, direct wind damage caused by Klaus to properties in southern France was relatively minor, though the incidence of damage was relatively high. Significant structural damage was limited almost entirely to cases where large trees had fallen onto buildings.”

About AIR Worldwide Corporation

AIR Worldwide Corporation (AIR) is the scientific leader and most respected provider of risk modeling software and consulting services. AIR founded the catastrophe modeling industry in 1987 and today models the risk from natural catastrophes and terrorism in more than 50 countries. More than 400 insurance, reinsurance, financial, corporate and government clients rely on AIR software and services for catastrophe risk management, insurance-linked securities, detailed site-specific wind and seismic engineering analyses, agricultural risk management, and property replacement cost valuation. AIR is a member of the ISO family of companies and is headquartered in Boston with additional offices in North America, Europe and Asia. For more information, please visit www.air-worldwide.com.

AIR Worldwide
Kevin Long, 617-267-6645
klong@air-worldwide.com

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INSURANCE NEWS

AutoClaims Direct, a leading strategic development firm and claims software solutions provider to the auto insurance claims industry announced the firm’s Property Adjusting division, “American Property Claims” experienced record growth in 2008.

Carlsbad, CA January 5th, 2009 --AutoClaims Direct, a leading strategic development firm and claims software solutions provider to the auto insurance claims industry announced the firm’s Property Adjusting division, “American Property Claims” experienced record growth in 2008.

The “American Property Claims” property adjusting division that focuses on homeowners claims, saw a 258% growth rate over the past year while adding twelve new clients.

“ I am very pleased to see our property division grow into it’s own with solid productivity. We’ve added some key personnel and will be soon to be adding a Property Director during the first part of 2009. Our key niche this past year has been our client-centered focus on manufactured home claims which primarily involved roof and water losses. Our cycle time and damage adjusting product surpassed any competitors in the industry.” Stated AutoClaims Direct / American Property Claims CEO Ernie Bray.

“A great benefit property claims offices gain from using our property division is the fact all of our claims are processed right online and accessible to adjusters 24/7. We provide real time data, complete file viewing and storage along with statistical analysis.” Added Bray.

"We can provide an array or reports that matches our auto division’s." Data such as our 2008 fixed property loss information shows that when a vehicle hits fixed property, the average loss severity was $3,487. This includes losses such as vehicles hitting restaurants, parking garages, fences, mailboxes, office buildings and homes. On the other hand, the average loss severity for manufactured homes during 2008 was $3,246 per file .

Insurers in 2009 who are looking to outsource field work such as property adjustments can easily plug into our nationwide coverage. We can work as an extension of any claims office", Stated Bray.

American Property Claim’s exciting 2009 growth plan includes the addition of a new Property Director, three additional in house property auditors, and creation of a fully operational CAT team.

American Property Claims (APC) specializes in homeowner's claims including; manufactured homes, residential, commercial, water losses, fire losses, hail damage, recreation vehicles, and specialty fixtures. APC provides live real time file access to the insurance adjuster along with online file completion and reporting.

For more information visit www.americanpropertyclaims.com or call 888-403-4223 x 706

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SAFECO AND DIRECT REPAIRS

Safeco Corp. Q4 2007 Earnings Call Transcript - Seeking Alpha

PAGE 4 DETAILS GOALS TO INCREASE DIRECT REPAIR ACTIVITY TO LIMIT COST TO UTILIZE "PARTNER BODY SHOPS" FOR CLAIM RESOLUTIONS.

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ALLSTATE INSURANCE POLICY CHANGES

More Allstate policyholders say they feel duped

Posted by The Times-Picayune January 16, 2008 8:02PM

8:04 p.m., Wednesday

By Rebecca Mowbray
Business writer

Marianna LaNasa, a Terrytown resident and Allstate homeowners insurance customer since 1994, believes that she may have been part of a bait and switch that is about to cost her the wind and hail coverage on her house.

In April 2005, LaNasa accepted a discount offer from Allstate that the company now says turned her into a new customer rather than a 14-year customer, making her eligible to lose her all-important hurricane coverage.

"My agent told me that because I was such a faithful customer and always paid on time, they wanted to offer me a policy with Allstate Indemnity and it would save with me a couple hundred dollars, which it did," said LaNasa, who is in her 70s.

Now her insurance agent tells her that having her policy re-written carries other implications, and she is slated to lose her wind and hail coverage this spring. She will have to purchase that coverage in a separate and more expensive policy from Louisiana Citizens Property Insurance Corp.

"I never made one penny's claim," said LaNasa, who feels jilted by the company, which also has her auto and flood insurance.

LaNasa is one of four new people who filed complaints with the Louisiana Department of Insurance this week, saying that Allstate took advantage of administrative changes it was making in policies in recent years to cut their most vital insurance coverage.

The suburban Chicago company says that customers who were shifted from Allstate Insurance Co. to Allstate Indemnity Co. were essentially taking out brand new policies. As a result, they were considered new customers and not eligible for state consumer protection rules that kick in once a person has been with an insurance company for more than three years.

"We have two homeowners insurance companies in Louisiana. A customer in one company may request a change in coverage and apply for a new policy in the other company. There may be benefits to making that switch such as additional discounts, a lower deductible or a lower premium. When a customer requests a move to another company, he or she is choosing to begin a new policy with a new policy number, a new effective date, written on a separate policy form and thus, new tenure of the policy," Allstate spokeswoman April Eaton said in an email.

On Dec. 19, state insurance regulators ordered Allstate to reinstate wind and hail coverage on 17 longtime customers who lost their wind and hail coverage when they took advantage of discount offers. The insurance department is also pursuing a similar issue with Encompass, the Allstate product sold through independent insurance agents, that appears to affect many more people.

Meanwhile, the Louisiana Department of Insurance has extended to Jan. 25 the deadline by which the state's second largest residential insurer must respond to the allegations. "They have until next Friday," said Warren Byrd, executive counsel at the insurance department.

Eaton said her company has received the insurance department's letter and is reviewing it.

Kenner resident Jo-Ann Trapani isn't really sure when or why her homeowners insurance policy was stamped with the name Allstate Indemnity Co. All she knows is that she's been a deluxe homeowners customer at her David Drive home for at least 30 years.

But last spring, Trapani, who is elderly and has emphysema and Parkinson Disease, got a note from Allstate saying that because her policy was written with that particular Allstate brand, she would lose her all-important hurricane coverage.

"Your Allstate Indemnity Co. property policy includes a new endorsement which excludes coverage of loss from windstorm or hail. Please keep in mind that you must obtain windstorm or hail coverage from another provider," the letter reads, and suggests that she purchase wind and hail coverage from the high-priced Louisiana Citizens Property Insurance Corp., the state-sponsored insurer of last resort.

Hybrid insurance policies written between Citizens and a private carrier are a bad deal for consumers. Getting coverage from two places instead of one is expensive, and the Citizens wind-only policies offer depreciated value coverage instead of replacement and don't cover living expenses for policyholders who are displaced from their homes by a hurricane.

The Allstate letter also said that it was canceling the landlord's policy that she had at another house she owns in Kenner where her son lives.

Trapani wasn't happy about the results of her hurricane claim, and isn't happy with what's happening to her policies, which now cost $942 for her windless Allstate homeowners insurance and $1,672 for her Citizens wind and hail coverage.

She also feels trapped -- when she told her insurance agency she was thinking about going with the AARP for her auto insurance, the agency told her she risked losing her homeowners coverage if she did.

"I could have gone with AARP and gotten it cheaper. But when I told my insurance agency, they said if I wanted to change to AARP, they might come back later and say, "Since we're not handling your auto insurance we're not going to handle your property,'¤" Trapani recounted. "I'm on a fixed income. I'm living on social security."

Belle Chasse homeowner Brent Ballay is one of the original 17 complaints at the insurance department.

When Allstate came out to check out a water leak at his house in 2004, the inspector said that Ballay was underinsured, so Ballay went to his insurance agent to get more coverage. Extra coverage was expensive, so when the agent said that Ballay might be eligible for a discount because of good credit, Ballay took him up on the offer.

But little did Ballay, a 16-year Allstate homeowners customer, know that the price of being properly insured when Katrina hit would cost him his hurricane coverage in 2007.

"All I asked them for was more insurance. I didn't ask for a new policy," said Ballay. "Naturally I'm not going to say, 'No, I'd like to pay more.'¤"

Rebecca Mowbray can be reached at rmowbray@timespicayune.com or at (504) 826-3417.

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STATE FARM INDIANA CLAIMS 2007

www.theindychannel.com/video/10993936/index.html

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STATE FARM CALCULATED MOVE ?

State Farm to exclude wind, hail coverage

By JIM FABER
jfaber@islandpacket.com
843-706-8137

Published Tuesday, January 15, 2008

Bill Neville got an unpleasant surprise when he opened a recent letter from his homeowners insurance company.

The Spanish Wells Plantation resident learned that State Farm Insurance Cos. would be excluding wind and hail converge if he renews the policy in March.

"I was pretty disappointed because I hadn't seen anything generally that would lead me to expect that State Farm was restricting their coverage," Neville said.

But he won't be alone in the change. State Farm will exclude wind and hail coverage -- the part of the policy that would cover hurricane damage -- for 2 percent of its policies up for renewal, said Bruce White, company spokesman. The change took effect Jan. 1.

The exclusion of wind and hail coverage will only come on policies within the service area of the South Carolina Wind and Hail Underwriting Association, also called the wind pool, White said.

The wind pool is a state-mandated association of insurance companies that makes wind and hail insurance available as a last resort to residents in coastal areas. The wind pool increased its rates an average of 35 percent in October.

Not all homeowners policies in the wind pool will exclude wind, White said. Only homes "in close proximity to the water" would face the exclusion, but for proprietary reasons, the company wouldn't publicly define the area more specifically, White said.

The number of state and county homeowners affected was unavailable. State Farm has about 26 percent of the state homeowners market, and roughly 2 percent of those face the exclusion. Meanwhile, the company is increasing its discount on auto premiums to 15 percent from 10 percent for customers who carry homeowners and auto coverage with State Farm, White said.

State Farm has been excluding wind and hail coverage on new policies written from homes in close proximity to the water for about two years, White said.

Neville, whose home is several hundred yards off of the water, said he has to wait until his policy's end date in March to get a rate quote without wind and hail from State Farm.

"In the meantime, I imagine I'll make some calls to some of the other companies," said Neville, who has been a State Farm customer for 23 years.

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CHANGE IN INSURANCE POLICY

MARTHA’S VINEYARD — With little notice, the state-sponsored homeowners insurance program hiked the deductibles for windstorm and hail damage in Dukes and Nantucket counties from 2 percent to 5 percent, the Vineyard Gazette reports. The increase applies to homes valued up to $500,000. The result will be the highest home insurance deductibles in the country.

The FAIR plan was created by the state legislature in 1968. It provides insurance for people unable to obtain private coverage, and now covers almost all island residences because private insurance companies have left, citing the possibility of devastating hurricane losses.

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STOCK REPORT

Earnings Preview: Allstate

Allstate Expected to Report Weaker Premiums, More Claims in 4th Quarter

January 28, 2008: 02:45 PM EST

NEW YORK (Associated Press) - Allstate Corp. is expected to report results for the fourth quarter on Tuesday. Following is a summary of key developments and analyst commentary related to the period.

OVERVIEW: After Allstate's profit more than doubled in 2006, a series of wildfires damaged acres of insured property in California, where Allstate is a major property insurer, and problems in the financial markets may have hurt its investment portfolio.

Adding to its challenges, competition for customers continues to drag prices for insurance policies.

Allstate's profit shrank 16 percent in the third quarter as the Northbrook, Ill.-based insurer paid more claims for insured damage. Allstate spent 91 cents of each premium dollar to administer claims in the third quarter, compared with 84.1 cents per dollar in the third quarter of 2006.

Wachovia Capital Markets analyst Susan Spivak Bernstein expects expenses to continue swelling, with Allstate spending 93.2 cents of each premium dollar in the fourth quarter. She expects premiums to decline 1.2 percent.

In addition to pressure from California claims, Bernstein said she expects some costs from wind and hail storms in the Northwest and ice storms in the Midwest in December.

Also, many insurers are reporting losses on their investments amid the turmoil in financial markets. Like most insurers, Allstate invests the premiums it collects.

The company's $121.13 billion portfolio lost about $1.14 billion of its value in the third quarter, partly because of losses on mortgage debt.

EXPECTATIONS: Analysts polled by Thomson Financial forecast fourth-quarter profit of $1.32 per share, marking a 26 percent decline. Revenue is expected to slip 3 percent to $8.86 billion.

ANALYST TAKE: Bernstein expects Allstate to report $360 million to $400 million in losses on catastrophe claims for the fourth quarter, mainly because of the California wildfires.

She also said Allstate may have to write off some of its investments. About 3.7 percent of Allstate's portfolio is tied to "subprime" debt, or loans to borrowers with blemished credit histories.

WHAT's AHEAD: The commissioner of insurance in Florida suspended Allstate from writing car insurance policies in the state because the state alleges the company is not cooperating with an investigation into homeowner's insurance.

A court delayed the suspension, but Allstate "will face many accusations of bad faith," said Stifel Nicolaus analyst Meyer Shields, whether or not the accusations have any basis.

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TWO SIDES OF THE COIN

Beefs with insurers fall in Kansas

In 2007, the state recovered a record amount of consumers' money, and fewer Kansans filed complaints over insurance claims, says the insurance commissioner.

BY DION LEFLER

The Wichita Eagle

State insurance regulators collected a record $15.1 million for consumers who had disputes with their insurance companies last year, according to Insurance Commissioner Sandy Praeger.

The 2007 recoveries topped the previous high of $13.6 million in 2005, Praeger said.

While recoveries were up, the number of complaints filed with Insurance Department investigators was down for the fourth year in a row, from 5,039 in 2004 to 4,420 last year, according to figures released by the office Friday.

Praeger said rising recoveries and falling complaints are both "obviously good news for consumers."

Last year was a big year for insurance claims, paced by $150 million in individual losses from the May 4 tornado that hit Greensburg, she said.

While hundreds of residents filed claims, only 10 filed complaints against their insurers. In one particularly complex case, Praeger said, the Insurance Department obtained $81,000 for a Greensburg homeowner who was originally offered $20,000 by his insurer.

"In that one, we even hired our own structural engineer," because investigators did not believe the insurer's estimates of damage, Praeger said.

In addition to the tornado, the year began and ended with damaging ice storms, primarily in western Kansas, Praeger said. "Ice and hail are probably our two biggest (causes) for property damage," she said.

When told of the $15.1 million in recovered damages, state Rep. Mario Goico, R-Wichita, said, "I think they're doing a fine job."

"This is why we have an insurance commissioner, to protect the people in this state," saidGoico, who serves on the House Insurance and Financial Institutions Committee.

Rep. Nile Dillmore, D-Wichita and the ranking minority member of the insurance committee, also complimented the department on its record-setting 2007 recoveries.

"I'm glad to see consumers getting some protection... without having to hire an attorney and go to court," he said. "I think Sandy does an admirable job."

However, he added that he thinks much of the escalation in recoveries may be just a reflection of inflation.

Praeger said she thinks the fall in

complaints is a result of two factors: more savvy customers who know their rights -- and limitations -- in their policies and aggressive enforcement that has weeded out some bad actors in the insurance business.

The department has a consumer affairs staff of 22, including four lawyers with prosecutorial authority.

One of the most common frauds is when an agent signs up a customer and offers to pick up the premium each month rather than having it mailed in. The agent pockets the money and the customer is unknowingly uninsured, often until he or she has to file a claim, Praeger said.

In most of those cases, the insurance company is not liable, but the customer can recover damages from the agent, Praeger said.

She said the department considers both sides in disputes and has found that fraud is a two-way street.

She recounted a story of one customer who beat four cars with a golf ball on a string and claimed it was hail damage, trying to bilk his insurance company for free paint jobs.

An Insurance Department investigator cracked that case when he closely examined the vehicles and found the word "Titleist" imprinted in one of the dents, she said.

Reach Dion Lefler at 316-268-6527.

IOWA BUILDING OWNER ADMITTED FILING 145 FALSE HAIL DAMAGE CLAIMS

Miell says he was owed claim money

By Elizabeth Kutter
The Gazette

CEDAR RAPIDS — A Cedar Rapids landlord told the civil jury in U.S. District Court on Wednesday that he was only seeking money owed him when he filed false insurance claims.

Robert Miell admitted filing 145 false claims for hail damage after a May 10, 2001, storm. He received an initial payment of $250,000. A second payment totaling $500,000 was to be paid when the roof repairs were completed. Miell submitted false documents to claim the second payment before the repairs were made.

American Family Mutual Insurance is suing Miell for return of all $750,000. In a criminal trial later this year Miell faces fines and up to 10 years in prison.

Miell said he filed the false claims because he had been given a one-year deadline to repair the damage. "It was impossible," Miell said. "It was impossible to find a roofer and shingles were difficult to find."

"I did what I did (filed false claims), because I was owed the money," he said, under cross examination by his attorney Peter Riley.

Miell said he eventually fixed the roofs at a cost of nearly $1.2 million, $450,000 above the amount he received from American Family.

In a third-party suit Miell claims his American Family agent Bret Thorlson of Cedar Rapids didn't provide Miell the insurance coverage for his vehicles that he had requested.

When Miell's then-girlfriend ran a stop sign in October 2001 and had an accident in one of Miell's personal vehicles, American Family refused to pay the victim more than the $100,000 allowed by the policy. Miell paid the injured woman $400,000 from his personal funds even though he had another umbrella policy with another insurance agency.

Miell also claims that Thorlson participated in discussions about the one-year hail damage deadline and an extension of six months. The policy did not set a one-year deadline for repairs but Miell said Thorlson and the adjuster told him he had only a year to complete them. Thorlson, Miell said, gave him a six-month extension to the deadline.

The trial will continue today before Judge Jon Scoles.

n Contact the writer: (319) 398-8318.

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HAIL DAMAGE REPAIRERS IN THE NEWS

Car dealers generate most BBB complaints

LAST YEAR'S HAILSTORM PROMPTED BARRAGE OF CALLS ABOUT ROOFERS

By Karla Ward

KWARD1@HERALD-LEADER.COM

Automobile dealers topped the list of most complained-about businesses at the Better Business Bureau of Central and Eastern Kentucky during 2007.

Auto dealerships have been in the top two or three slots on the list for years, said Neil Kingery, president and chief executive officer of the BBB of Central and Eastern Kentucky.

He said part of the reason for that might be the misconception among consumers that there is a "lemon law" allowing them to return a used car, as well as purchases made from unscrupulous businesses.

Also on the top 10 list, in order of the number of complaints: home improvement and repair companies, cellular phone service and equipment, insurance, Internet shopping services, auto repair and service, manufacturers and producers, furniture retailers, health clubs and auto parts and supplies.

BBB spokeswoman Heather Clary pointed out that the way a company handles complaints against it -- not the sheer fact that there are complaints -- is the best way to gauge its reputation.

"Just because an industry is complained about doesn't mean they're all bad apples," she said.

As in the previous four years, home improvement and repair services were No. 1 on the list of most inquired-about industries.

Roofing contractors, which usually are included in the home improvement category, took the No. 2 spot.

The local BBB got more than 30,000 inquiries about roofers last year, nearly four times the number received in 2006.

"The BBB's importance to the community really stood out this year after a hailstorm hit Fayette County and surrounding areas back in June," Kingery said in a statement. "Homeowners knew it was important to start with trust and seek guidance from the BBB in checking out roofing contractors."

Clary said she is still taking calls from homeowners looking for reputable roofing companies to repair hail damage.

To check out a company or report a problem through the Better Business Bureau, visit www.ky.bbb.org or call 259-1008 or 1-800-866-6668.

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BASHING RECORDS DOWN UNDER

Hail costs insurers nearly $300m

Article from:

December 20, 2007 01:47pm

THE hailstorm that lashed Sydney earlier this month will cost insurer Suncorp as much as $180 million and rival IAG, $105 million.

Suncorp, which offers policies under the GIO and Aami brands, today put a range of $150-$180 million on the bill from an estimated 23,000 claims.

Suncorp told the Australian stock exchange this morning that the majority of claims from the damage are for personal insurance, 65 per cent of them relating to motor vehicles.

Only a small proportion related to commercial insurance.

Suncorp chief executive John Mulcahy said the group had experienced a number of serious weather events during the first half of the 2008 financial year, which will impact profit in the first half.

"While these events will have a material impact on the group's first half profit, it is too early to update the insurance trading margin until all matters affecting this calculation are completed," he said.

"These include the half year end actuarial calculations and the mark to market impact of widening credit spreads on the Group's technical reserve investments.

"It should be noted that the mark to market impact of widening credit spreads is purely a timing issue, which will unwind in future periods. There is no suggestion of credit losses in this portfolio."

Meanwhile IAG - the old NRMA and one of the most commonly owned shares in NSW - today downgraded its annual margin guidance after the company received more than 21,000 claims.

IAG said its insurance margin would be between nine and 11 per cent in fiscal 2008, down from earlier guidance of 11 to 13 per cent.

The impact of the storms in the first week of December would cost about $105 million, net of reinsurance, IAG said.

Chief executive Michael Hawker said about 60 per cent of the claims received were for hail-damaged cars.

"We process claims as quickly as possible, however, with an event of this magnitude it takes time to finalise claims," he said.

"Our NRMA Insurance assessing centre in Blacktown would usually assess around 250 claims a week from Monday we have been assessing around 2,500 - a ten-fold increase.

"We've flown in assessors from Western Australia, South Australia, Queensland and regional NSW and we have also placed additional staff in our teleclaims area."

IAG said Sydney was experiencing the wettest year since 1998, resulting in increased claims frequency within the group's major portfolios.

"These storms are the third event in less than two years to each have a total personal lines claims cost over $100 million, following Cyclone Larry in March 2006 and the Queens Birthday weekend storms in June this year," IAG said.

"This is further evidence weather patterns are changing, which will have an impact on premiums."

The June storms wiped $200 million from IAG's fiscal 2007 profit, which fell 27 per cent.

IAG said should a third catastrophic event occur in Australia during the remainder of calendar 2007, its main catastrophe reinsurance arrangements would provide cover for any claims costs over $75 million.

The retention level for the additional commercial component, subject to a separate cover, remains at $25 million.

IAG shares had recovered from a modest early fall to be unchanged a short time ago at $4.12.

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HB 169: It is all about you/INSURANCE REPAIR LAW

The summer of 2006 will always be remembered in Exeter as the summer of disaster. We had the floods in May and the devastating hail storm in July. Just as a quick reminder we had approximately 10,000 vehicles damaged and an estimated $100 million in insurance claims.

Unlike the flood, which is usually not covered under your homeowner's insurance, the hail damage was. How you were treated by your insurance company depended on your insurance company. Catastrophes bring out the very best and the very worst in relationship to the level of fairness that your insurance company or claims adjuster went about their business. Matt and I received numerous phone calls with questions, problems and complaints, so we had broad exposure to what was going on with these claims and not just our own problems.

One of the major problem areas was the low balling (purposefully underestimating your damage so to reduce the amount of payout the insurance company pays you), your claim, which caused you a lower insurance settlement. The N.H. Insurance Department did a fantastic job dealing with these issues; but, had only a broad statute to deal with. Much of the department's success had to do with an insurance carrier not wanting to anger or bring negative attention to itself by its regulatory body. All insurance companies are regulated by the insurance department.

I sat down with Matt, compared notes, and discussed ways to strengthen our insurance laws to make it easier for you to get a fair settlement and for the insurance department to have greater regulatory authority to help us all. What came out of all our discussions is HB 169:

An act relative to penalties for insurers or adjusters knowingly underestimating the value of an insurance claim.

Sponsors: Rep. Marshall Quandt, Rock 13; Rep. Matthew Quandt, Rock 13; Rep. Weyler, Rock 8

Committee: Commerce

Amended Analysis: This bill makes it an unfair insurance trade practice subject to penalties for an insurer or adjuster representing the insurer to knowingly underestimate the value of an insurance claim.

Explanation: Matter added to current law appears in bold italics. Matter removed from current law appears (in brackets and struckthrough.) Matter which is either (a) all new or (b) repealed and re-enacted appears in regular type.

An act relative to penalties for insurers or adjusters knowingly underestimating the value of an insurance claim.

Be it enacted by the Senate and House of Representatives in General Court convened:

30:1 New Subparagraph; Unfair Claim Settlement Practices by Insurers. Amend RSA 417:4, XV(a) by inserting after subparagraph (13) the following new subparagraph:

(14) Knowingly underestimating the value of any claim by an insurer or by an adjuster representing the insurer.

30:2 Effective Date. This act shall take effect January 1, 2008.

Approved: May 14, 2007. Effective: Jan. 1, 2008

Now it is illegal for an insurance company or adjuster to knowingly misrepresent your damage for the purposes of saving the insurance company money on your payout. The theory is simple, we cannot steal from them because it is illegal and now it is illegal for them to steal from us; the playing field is getting leveled. The bill will take effect in January.

Matt and I also want to thank our longtime friend Rep. Ken Weyler from Kingston for helping us get this bill passed.

Lee Quandt is a Republican state representative for Exeter-Stratham-North Hampton.

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UPDATE POSSIBLE INSURANCE LAW CHANGES

New Hampshire legislature eyes low estimates

Feb 5, 2007

Automotive Body Repair News

The New Hampshire state legislature is taking a close look at the way appraisers and adjusters prepare damage estimates as they consider two bills introduced in January aimed at confronting the problem of underestimating insurance claims.

Representative Marshall Quandt of Exeter, the sponsor of the two bills, proposed the legislation after receiving complaints from constituents about unusually low repair estimates they received from their insurance companies after a hail storm pummeled the region this past summer. Hundreds of vehicles were damaged in the storm.

The first bill, HB 31, calls for any person acting as a physical property damage appraiser on behalf of an insurance company to be licensed by the insurance department. The second bill, HB 169, would enact penalties for insurance adjusters, appraisers or companies “purposefully underestimating the value of an insurance claim.” If passed, both bills would take effect in 2008.

“In talking with auto body shops, I've heard that this problem is fairly rampant,” says Quandt, in an interview with ABRN. “If there are people in the industry who do this in Exeter, then I'm fairly certain it happens all over.”

Consumer groups and members of the collision repair community have long suspected insurers of deliberately underwriting estimates for some time. According to Keith Volquardsen, a consultant with the National Alliance of Paintless Dent Repair Technicians (NAPDRT), adjusters will try to keep estimates as low as possible so that customers who opt to not have their vehicles repaired will receive only minimal payouts.

“This is a nationwide problem,” says Volquardsen. “A large percentage of people never get their vehicles repaired. They take the money and pocket it. It's in the insurance companies' interest to write [the estimate] as low as they can, and then supplement the people who actually get the vehicles repaired. There is no incentive for them to make a good faith effort to estimate the vehicle correctly.”

The NAPDRT is supporting the proposed legislation in New Hampshire, and the group's president, Jamie Hawkins, will testify at an upcoming hearing on HB 169.

“The New Hampshire legislators looked into this, and realized there were no laws on the books to discourage insurance adjusters from intentionally writing an estimate that's really low,” Volquardsen says.

“As long as an insurance adjuster operates within the parameters of his company policies, he is covered by the company,” says Quandt. “What happens when they don't? Maybe they don't follow the rules and regulations. My bill would hold them accountable.”

Insurers, however, believe these issues are already covered sufficiently through existing consumer protection laws and the regulations of the New Hampshire Insurance Department

“It is the view of my clients that appraisers are already responsible for their conduct, and that the insurance company bears the responsibility to be accountable to the public and to the insurance department,” says George Roussos, an attorney with Orr & Reno in Concord, N.H., who represents the New Hampshire Association of Domestic Insurance Companies. “If there is misconduct on the part of someone hired by the appraiser, then the company is on the hook. This bill is just another bureaucratic layer that is not necessary.”

A few other states already license appraisers, including nearby Massachusetts. “I think it's definitely beneficial,” says Chuck Sulkala, owner of Acme Body & Paint in Jamaica Plain, Mass. “I have to have a license to write an estimate. If I don't do it properly, whether I work for the insurance company or the repairer, I'm the one that will be brought before the board. You have a degree of risk as an individual.”

The issue of fraudulent estimates is more complex than the licensing bill. While insurance adjusters have been accused of keeping estimates low to benefit the insurance companies, repair shops also often miss the mark on initial estimates. A number of factors can lead to an incorrect estimate, including lack of experience on the part of the estimator, or hidden damage that's not readily apparent if the vehicle isn't torn down for the estimate.

“The real problem is, the consumer doesn't know what was missed initially if they don't get the car repaired,” says Sulkala. “If they do get it repaired and see this huge disparity between the estimate and the final bill, that's going to raise some eyebrows, and it doesn't do any of us any good. There really needs to be a lot more effort made to look into this and come to some kind of resolution. The industry is really miles apart on this, depending on where you sit.”

Even some people in the collision repair industry are unsure how effective a law like HB 169 will be. “There are plenty of laws on the books right now, all we need is enforcement,” says Tony Lombardozzi, owner of Automotive Collision Repair Services in Hudson, N.H., and president of the Coalition for Collision Repair Excellence (CCRE). “Fraud is fraud. When a consumer complains about their estimate, the attorney general should say, 'We have a problem here.' Right now, the attorney general turns around and hands it off to the department of insurance. If insurers are intentionally underwriting the value of a loss, that's consumer fraud. Any other fraud case would be handled by the attorney general.”

HB 31 received a hearing on Jan. 24, and a hearing for HB 169 was scheduled for Jan. 30. If the two bills make it out of committee, they'll need to pass the New Hampshire House and Senate before becoming law.

“I expect a tremendous amount of opposition,” says Quandt. “If you talk to the insurance industry, this problem doesn't exist.”

Roussos says a possible compromise on the licensing issue could be reached that would be acceptable to insurers. “One possibility would be to only license so-called independent appraisers, or those not affiliated with or employed by an insurance company,” he says.

As for the underwritten estimate issue, Roussos thinks any additional legislation would be redundant. “It would just prohibit what is clearly prohibited under the laws today,” he says. “It doesn't add any enforcement to what the insurance department already does.”

Lombardozzi, on the other hand, thinks the bills skirt a larger issue: that insurers shouldn't have a hand in estimating at all. “The issues go deeper than these two bills,” he says. “Insurers do not repair cars. Why are we giving those estimates any credibility?”

The NAPDRT is setting up an area on its Web site, www.napdrt.org, where consumers can obtain more information and file complaints. Volquardsen says the group will also be working closely with the Automotive Service Association (ASA) on estimating and insurance issues.

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MONGOMERY ALABAMA

This pooch is announcing to the world that someone he doesn't know is at his house. That someone is Donald Mack... A claims adjuster for ALFA.

David Rickey is the company spokesman. He says, "Alfa's been receiving a large number of calls today, primarily because of the widespread nature of this storm."

And that is keeping mack constantly on the move. But with today's technology, he doesn't have to run back to the office....he can submit his findings right from his car.

The day after any storm is going to be a busy one. Just ask any insurance adjuster. This says he goes out to 15 or 20 homes every day. Rickey says, "A lot of times with a hail storm, it's more concentrated...this was so widespread, we're getting calls literally from throughout the river region." And the type of damage they are seeing is a little bit of everything, "You'll see a lot of roofs that have experienced some damage, and a lot of automobiles that were out in the elements."

But now Rickey says they have the cavalry on the way, "Fortunately Alfa is a wide spread company through out the state and when we have a localized storm like this, we can bring in claims adjusters from around the state.

Reporter: Ashley Anderson

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STATE FARM NEW MISSISSIPPI POLICY WILL NOT EFFECT AUTO INSURANCE

State Farm: No New Policies in Miss.

By MICHAEL KUNZELMAN

AP

Mississippi's largest homeowner insurer said Wednesday it has had enough of the "untenable" legal and political climate and is suspending writing new homeowners and commercial policies in a state still struggling to recover from Hurricane Katrina.

A spokesman for State Farm Insurance Cos. said the decision was due in part to the wave of litigation the company has encountered since the Aug. 29, 2005, storm. Mississippi is the latest state along the hurricane-vulnerable Gulf Coast to at least temporarily lose an insurer.

In Florida, several insurers have dropped tens of thousands of policies since the back-to-back storm seasons of 2004 and 2005, when eight hurricanes hit the state.

And in Louisiana, many insurers have stopped writing new policies along that state's coastline, said Amy Whittington, spokeswoman for the Louisiana Department of Insurance. However, Whittington said no company has made a blanket decision eliminating all new business in that state, which - like Mississippi - stretches hundreds of miles northward from the Gulf of Mexico.

State Farm has more than 30 percent of the homeowners policies and 8.5 percent of its commercial policies in Mississippi. The company said the suspension would begin Friday and continue until the business climate in the state is more palatable.

As far as its current homeowner and commercial policies in the state, the company said in a statement that it continues to assess its position in the Mississippi marketplace "to determine what further steps, if any, are necessary."

The suspension does not impact State Farm's financial services, banking products or automobile coverage in the state.

Mike Fernandez, vice president of public affairs for State Farm, said Mississippi's "current legal and political environment is simply untenable. We're just not in a position to accept any additional risk in this homeowners' market."

The suspension was not a direct response to any specific development in the litigation, Fernandez said. That litigation has included a recent federal jury's $2.5 million punitive damage award to a couple who sued State Farm for refusing to cover the Katrina's storm surge damage to their Biloxi home.

U.S. District Judge L.T. Senter Jr. later reduced the award to $1 million, though he said State Farm acted in a "grossly negligent way" by denying the claim filed by policyholders Norman and Genevieve Broussard.

J. Robert Hunter, a former Texas Insurance Commissioner and now director of insurance for the Consumer Federation of America, said many other major insurers may be reluctant to step in and fill the void left by State Farm in Mississippi.

"A lot of the larger companies already are reluctant to write new business there," Hunter said.

He said the action "will obviously make rates higher for people trying to get new policies. People with existing policies are probably going to pay more too just because of supply and demand."

Robert Hartwig, vice president and chief economist for the Insurance Information Institute in New York, an industry-funded group, said the courts and some Mississippi officials have created a "virtually impossible working environment for insurers," he said.

"I view this decision as the inevitable outcome of the increased uncertainty and cost associated with the litigation that has developed post-Katrina," Hartwig said of State Farm's decision.

Mississippi Attorney General Jim Hood sharply criticized the decision, saying State Farm had indicated in the past it would remain in Mississippi and continue to write homeowner policies. Hood said it was State Farm and not Mississippi that had created the problem by refusing to pay claims and dragging out the process.

"If they paid what they owed in the first place, there never would have been a lawsuit filed," Hood said.

He said the insurer was trying to "nickel and dime" policyholders on the coast after making "$3.9 billion in the most catastrophic year in history."

Mississippi Insurance Commissioner George Dale said the company's suspension of writing new policies comes at a time in the recovery process when "it is becoming more vital than ever that policyholders in Mississippi have a viable and affordable insurance market."

"State Farm's decision is a stark reminder that the issues brought about by Hurricane Katrina affect not only the coast, but policyholders all across the state," Dale said in a statement.

"It is my hope that by continuing to work with State Farm, they will at some time in the future reverse the decision," Dale said.

State Farm has agreed to settle hundreds of lawsuits by policyholders and reopen and pay thousands of other disputed claims. The landmark deal is potentially worth hundreds of millions of dollars for Mississippi homeowners devastated by Katrina.

Fernandez said the company had written roughly 29,000 new homeowner policies in the Mississippi in 2006, while other companies were writing a smaller percentage of claims.

Mississippi is the only state where his company has suspended writing new policies.

"The political and regulatory and legal environment in the other two states (hit by Katrina) - Louisiana and Alabama - is not the situation in Mississippi," he said.

State Farm and other insurers say their homeowner policies cover damage from wind but not from water - and exclude damage that could have been caused by a combination of both, even if hurricane-force winds preceded a storm's rising water. Hundreds of policyholders have challenged that claim, saying they are entitled to damages from storm surge.

"We don't want to write new policies under a contract that they are calling into question," Fernandez said.

State Farm, in a settlement reached last month, agreed to pay about $80 million to more than 600 policyholders who sued the company for refusing to cover damage caused by Katrina.

Senter, saying he needed more information, declined to sign off on part of the agreement for at least $50 million in payments to policyholders whose claims were denied but didn't sue the company.

State Farm said earlier that it already has paid roughly $1.1 billion for about 84,000 property claims in Mississippi.

In Florida, lawmakers earlier this year passed wide-ranging legislation aimed at trying to reduce insurance rates - but several companies continue to say they have to consider dropping policies to stay viable. An emergency state regulation is currently in effect preventing companies from dropping policies, but the industry is fighting the rule in court. Several companies have already spelled out plans to drop more policies when the emergency rule is no longer in effect.

Jim Donelon, Louisiana's insurance commissioner, said he talked to State Farm's top representative in his state and won an assurance that the company is not planning to pull back its coverage.

Donelon said he doubted any insurer would pull out of Louisiana altogether, even though companies doing business in that state are also facing hundreds of hurricane-related lawsuits. Companies that lose such lawsuits will face smaller financial penalties than in other states, Donelon said, because Louisiana's state law severely restricts the size of punitive damages that can be awarded.

In Alabama, State Farm said earlier it would not renew about 2,500 policies of condominiums and homes located within 1,000 feet of the Gulf and Mobile bay.

Doug Simpson in Baton Rouge, La., David Royse in Tallahatchie, Miss., and Phillip Rawls in Montgomery, Ala., contributed to this story.

Posted by TECHGEAR05 at 07:12 PM | Permalink | Comments (893) | TrackBacks (27)

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