This story is from the days when insurance policy,s were rolled into a manual typewriter and ALL the numbers were typed in. The VP of claims for American General Insurance Co (Maryland Casualty- AIG) was giving a dinner speach about the Texas 148 End. (all risk of loss and replacement cost coverage). The adjusters in the room were making statements like "its a maintenanace policy" its new for old" "it will break the insurance claims departments"
Mr. Raymond Mauk had a MBA from Wharton School and I still remember his words. Now you guys in the claim department settle down ,we know what we are doing. Let me explain, you hear talk about underwriting profit, well we all know thats premium dollars less claims paid, but we make our profit on INVESTMENT income and we strive for 5%. So just think that when the girl in the agents office rolls the policy in the typewriter to put in the premium amount which is determined by paid LOSSES, which is better for us , its now $100.00. Would it not be better for us if it was $200.00 or $300.00.
In the great state of Texas with the mold gold that was started by the water sucker industry and exploded by the plaintiff attorneys, ever homeowner in Texas will be punished for 10 more years by homeowner rates triple what they were before 1999.
The water suckers are making the insurance companys money by running the premiums up higher each year on paid losses. Who is the best adjuster on a storm.? The one who has the FEWEST REOPENS and FEWEST COMPLAINTS. This is impossible if you are not overpaying ever loss you inspect. The most demanded estimating program in the industry today did not get there by competetive bidding on reconstruction work,but by partnering up with the water suckers.