Posted on 08/16/2006 11:01:54 AM PDT by Hydroshock
Allstate Insurance Co. officials say Louisiana state law allows the company to drop basic hurricane coverage for 30,000 policyholders in 18 coastal parishes - a stand that state Insurance Commission Jim Donelon is challenging.
Advertisement The company does not plan to pull out of the Louisiana homeowners market, a threat that Donelon says Allstate made during a recent meeting, said Allstate spokeswoman April Eaton.
At issue is a state consumer protection law that prohibits insurance companies from changing a policy or dropping coverage if the policyholder has been insured for three years and has not had more than two claims not considered "acts of God.''
Allstate legal counsel Lorrie Brouse said that the state law deals with cancellations and nonrenewals.
"We're not disputing the statute,'' she said. "We're saying what were planning to do doesn't apply.''
Donelon said the law does not allow Allstate the second-largest insurer in the state to "gut'' policies.
Allstate wants to drop wind and hail coverage in Ascension, Assumption, Cameron, Iberia, Jefferson, Lafayette, Lafourche, Orleans, Plaquemines, St. Bernard, St. Charles, St. James, St. John the Baptist, St. Martin, St. Mary, St. Tammany, Terrebonne and Vermilion parishes.
"This stretches from Cameron to St. Bernard,'' Donelon said. "Its not just the folks on Holly Beach and Grand Isle.''
Reducing the company's risk cannot be solved with a "one-item fix'' such as raising rates in the storm areas, Eaton said.
Donelon said Allstate wrote policies with full knowledge of the consumer protection law. He said the dispute likely would be settled by the Louisiana Supreme Court.
In 2004, Allstate dropped 95,000 customers in Florida. This year, the company intends to not renew 120,000 Florida homeowners policies.
Allstate recently reported a second-quarter profit of $1.2 billion, earnings the company said were largely driven by automobile insurance.
Sounds good...
Unless you live on the Gulf Coast.
I think we just proved that living there is a BAD idea, not so?
What? You can't force someone at gunpoint to sell something they don't want to sell? The horror!
Allstate is a private company and has every right to offer whatever level of coverage it determines to be profitable. Customers are free to find other companies if they don't like what Allstate offers. Customers who can't find a company that offers the coverage they want should ask themselves why the company doesn't believe it can make money offering that coverage.
Not surprisingly, this article is completely riddled with inaccuracies and mischaracterizations.
So what you are saying is people should not be able to buy houses on the Coast. Because that is what will happen, you will not be able to get a loan for a house without it.
Such as?
Alternate headline: Good Hands Flips Bird.
Wonder why they let the Louisina Farm Bureau Insurance do it?
This is Louisiana, LFB pays off the right people.
however, insurance is one of those tricky areas of law where you are basically paying money to a company whose mission in life is to NOT pay out claims.
If insurance companies were serious about reducing risk, they would petition for stricter building codes to allow for homes to be far more survivable. (see florida coastal codes) In fact ALL codes should be upped.
Discounts given to homes which retrofit to the newer code.
Beat me by 2 seconds!
People should not be able to buy houses on the coast in the expectation that everybody else living in safer areas should financially subsidize their risk. If they can find a company willing to write coverage for whatever the market will bear, great. Otherwise, tough titty.
-ccm
No one said that. Anyone can buy a house on the coast if they have the resources to do so.
Because that is what will happen, you will not be able to get a loan for a house without it.
Some people actually buy real property with their own money, without taking out a loan.
Your argument is that insurance companies and banks should be forced by law to take risks that they don't want to take, so that homeowners don't have to worry about risks at all.
Perhaps the homeowners should grow up and handle their own risks themselves.
Then you can't afford to live on the coast. If you take the risk, you need to foot the bill.
No, I didn't say people shouldn't be able to buy houses on the coast. What I said is that no one is obligated to insure said houses. Nor is anyone obligated to lend the home-buyers money. We have the right to pursue happiness; there is no existing right to achieve it.
Well, at least now you'll be conscious of the risks you're taking if you live there...
Don't ask me to subsidize your lifestyle choice -- we don't have hurricanes, earthquakes or tidal waves in Indiana.
Good way to get TX, LA, MS, AL, and Fl to all vote democratic. tens of millions live ong eht coast in this country. If they can not get reasonable insurance it will kill their home values. And you three do not think they will not vote for who they think will protect those homes? Come on.
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