| Author |
 Topic  |
|
trader
USA
236 Posts |
 Posted - 04/09/2004 : 11:20:22
|
The local claims in the Houston area have dropped 250% since the mold crisis and the HO-A modified. The 1 and 2% Ded. and good agents advise to thier customers has also taken its toll on adjusters volume.
It may have an effect on roof claims in the future. If I was the manager of a company in a large metro area and I had access to all the claim records for the past 4-5 years this could work. A section of the area was hit by baseball to softball size hail (straight down). I would go into the zip codes and get the start/stop boundary.
I would then request the homeowner to have a roofer take a front elevation photo and two roof photos and mail them into the claim office, with his estimate. Hire 5 adjusters on a daily rate to match the new and old files,seperate/reinspect and pay/close hundreds of claims each day. And, hopefully for the five, the records are not kept in India. |
 |
|
|
Todd Summers
USA
99 Posts |
Posted - 04/09/2004 : 11:30:58
|
| I have heard the same kind of comments about cancellations. Where is it coming from? Is it true? I have always thought that you could not be cancelled for having weather related claims. But that premiums could be increased to policyholders in an area that repeatedly gets hammered by weather, wether they individually filed claims or not. In fact, when asked this kind of question by an insured (more and more frequently), I explain that I am not a part of the underwriting process and therefore have no idea how all that works, but I believe it works as described above. I also state that the contractor may have not found all of the damage and perhaps they should allow me to inspect. If it is still below or near their deductible, they can still withdraw their claim if that is their desire. Am I wrong? Is there really a "one strike and you're out" policy being enforced by carriers? Is this legal? |
|
|
|
Gale
USA
231 Posts |
Posted - 04/09/2004 : 12:40:22
|
| Todd, you ask a lot of good questions that I am sure some can answer from experience. Last evening an adjuster told me in VA a carrier can not cancel you due to an act of God so if you have a fire make sure it started during a storm with lighting to be on the safe side. One post indicated the one strike and you are out is more common on the west coast. Actually I know it happens on the auto side yet I do not understand why it is legal. A neighbor told me last week State Farm dropped him after 20+ years after his son was at fault in a wreck and now he is paying $4K annually, which was about 2X of what he was paying before State Farm dropped him. |
|
|
|
ChuckDeaton
USA
373 Posts |
Posted - 04/09/2004 : 15:32:50
|
| State Farm dropped my auto and umbrella after an auto accident. I had been with them 20+ years. My homeowners was raised after Andrew and my garunteed replacement cost policy canceled. I live in Arkansas. Apparently these kinds of things are legal. |
|
|
|
Todd Summers
USA
99 Posts |
Posted - 04/09/2004 : 16:05:44
|
I am not talking about auto policies or liability or negligence. I am talking about cancellations of homeowners policies due to claims arising out of weather related events (acts of God).
Chuck, premiums and policies change all the time due to a variety of reasons like, weather trends, litigation, legislation, mold, Isabel, carriers just wanting to minimize their exposure in a certain area etc. These are all understood and are business as usual.
The question is how can a carrier cancel your HO policy after one weather related claim? And if they can't, how are policyholders getting wind of this threat? Is this a rumor? Is it fact? To what degree is the local/national media involved? Have some in the media lied or been lied to or mislead about this? By whom?
This is really bad news for us and I would very much like to have a better understanding of what the hell is going on here. |
|
|
|
trader
USA
236 Posts |
Posted - 04/09/2004 : 16:23:41
|
In good old Texas I believe it takes 3 weather and 1 otherwise. The DP1 will allow you to withdraw your claim, even if inspected if the loss does not exceed your Deductible, but don,t think this has been changed in the wonderful HO-A (M) (this biggest ripoff since Enron) and probably will not if the insurance comm. is in Austin. All adjusters in Texas should get a DP-2, and a theft policy for $5,000-$10,000 About $60.00- $70.00 per year. A Personal Liability $300,000. limit for about $75.00 for 3 years. You will save about 1/3 to 40% of your HO-A (M)
but you will Not have any RCC, tree for lightning. Keep your house up and browbeat the adjuster on depreciation if you have a claim.[:D] |
Edited by - trader on 04/09/2004 16:27:06 |
|
|
|
Debby
USA
10 Posts |
Posted - 04/09/2004 : 17:10:12
|
What occurs is not a "Cancellation" but a "Non Renewal"
The carrier waits for your term to be up and instead of getting the nice letter of thanks for choosing us, you get thanks but no thanks.
All they have to say is that you are no longer a part of their target market or they are no longer writing your type of risk.
The agents are all aware of the u/w standards that are happening. They will counsel and insured to really think about their loss before even reporting as that will in cases trigger that little non renewal.
In Calif it does not matter if it is storm related or other type of loss. Any type of water loss and you can kiss coverage goodbye.
Clue will have you in their data banks quicker then anything and just try to shop coverage with that info out there.
Now Clue has been helpful in the past, but U/W usage I think has gone overboard |
|
|
|
alanporco
USA
112 Posts |
Posted - 04/09/2004 : 17:51:26
|
| trader: Your 11:20 post states that claims in the Houston area have dropped 250% since the mold crises. Is the claims count above or below the average before the mold crises? The mold crises was a huge blip much like an earthquake. To determine if claims are historically up or down, one needs to look at a period without the addition of an unusual "event." How does the claim count look with those parameters in mind? |
|
|
|
ChuckDeaton
USA
373 Posts |
Posted - 04/09/2004 : 18:04:51
|
| My information would seem to support Trader's assertion, maybe not 250% but seriously down. A speaker, at the dedicated TWIA meeting, said that combined ratios had gone from above 120% to less than 60%. The decrease is the result of lowered claim volume due to percentage deductibles, ACV coverage and the addition of the word "sudden" to the Texas homeowners. Another factor is the reluctance of carriers to insure after water damage. |
|
|
|
adjuster12
USA
21 Posts |
Posted - 04/09/2004 : 18:57:58
|
| Debby, you nailed it!!!!!!!!!!! |
|
|
|
Gale
USA
231 Posts |
Posted - 04/09/2004 : 19:28:48
|
It seems like at some point going the non-renewal route would greatly reduce a carrier’s number of insured’s but if they really can run combined ratios of 60 it would be years before they would have to be concerned. If they could capture a large segment of new homes being built they would reduce their chances of losses it would seem. Does a $300,000 home with a 2% deductible mean the $ amount would be $6000 or 2% of the loss amount?
At the age of 53 I do not ever remember when high deductibles were the norm but they were more like $250 to $500 so is this a totally new trend or just part of a cycle? If it is a new trend then there is just no way when it will reverse if ever. I would go for the high deductible if the savings is large enough. With say a $5K deductible the chances of a claim must be approaching zero at least based on my family’s experience. I do know of several cases of wealthy owners that always self-insure their property. For most of us there is a banker that does not give us that option. [:(]
|
|
|
|
KileAnderson
USA
875 Posts |
Posted - 04/09/2004 : 19:50:36
|
| I don't think that the state insurance commisioner would allow them to run combined ratios of 60% for long without mandating rebates or rated decreases. Even if the commisioner didn't do it the market would do it on its own because insurers would once again start competing for business by lowering their rates to either undercut the competition or just to remain competitive. |
|
|
|
Linda
USA
127 Posts |
Posted - 04/09/2004 : 20:49:35
|
Gale, the 2% deductible would be $6,000.00. There are some states that are breaking out the deductibles for example; wind/hail/tornado/hurricane may be 2% deductible and the other perils may be at a $$ amount such as $500.00. You just have to pray the hail doesn't hit you every year!
Working in NC during Isabel, we "knew" the claims should have been there but weren't then we were told by some of the locals their agent had told them if they filed a claim they would be "dropped." This trend appears to not be an East or West event but rather an East to West. |
|
|
|
KileAnderson
USA
875 Posts |
Posted - 04/09/2004 : 20:56:42
|
| My parents live in the DFW area. They have a 2% deductible. They had their roof damaged in last years hail storm. After the deductible they were left with enough to replace their gutters and that's about it. The new Texas HO is basically a catastrophic loss policy. Unless you have a major fire or tornado you don't really get much out of it. |
|
|
|
Gale
USA
231 Posts |
Posted - 04/09/2004 : 21:17:25
|
Then is the wild card possibly still the deductible?
In world of medical insurance at one point there were the “Major Medical” policies. From what I have heard the Unions pushed contract after contract for “Full Coverage” policies with Zero Pay prescriptions, etc but now the higher deductibles are gaining ground again.
If ratios stay below 90, Kile I could see your point becoming reality. My question is would the carriers be inclined to first reduce premiums or offer lower deductibles for the same premium dollar so as to have more claims filed to increase their ratios?
While carriers seem to have short memories one could see how they would like to stay away from enlarging their claims departments. On the other hand to look larger in sales they might go for holding premium stead and promoting lower deductibles.
One way will increase (restore) the size of the claims handling industry while the other could basically kill it off, as it is known today. I would guess if the number of claims was to drop by 50% and stay at that level for 5-8 years that 80% of the vendors in the claims handling industry would disappear because of the thin margins that would exist and only the very large or small would survive.
Several IA’s I know working staff positions are making about $75K annually now while sleeping at home but with their backgrounds some would be forced to stay in claims even at $37.5K. Since the carriers must know this as well then why would they be inclined to drive up the demand (cost) of claim handling by increasing the demand for adjusters?
If the NFIP thing leads to full coverage it will price many owners out of the market so they might take huge deductibles (like $10K-$30K for some beach front property), which would hold down the number of claims.
As Kerry points out, families on average are making $1200 less per year than three years ago. What he does not tell us is that three years from now the average income will be even less regardless of who is in the White House because of the great ($20-$50) blue and white collar jobs leaving the US.
World events may make the world such a dangerous place the entire outsourcing thing may reverse. What would marine insurance cost for oil tankers and container ships if terrorist sinks one in every 1000 or 10,000 each year. Wal-Mart would have to close down when the price of China goods tripled.
While there are great unknowns in front of us I bet most of us will find a way to stay fat doing one thing or another. As long as people have mortgages there will be home and auto insurance and regardless of the size of deductibles there will be some work for some. Damages will still have to be fixed even if there is no claim filed so there should be more openings for estimators by the contractor firms and since some already do that during the slow times it will not be a big change for those. [:)]
|
|
|
|
Topic |
|
Future of CAT Adjusting industry?
Forum Locked
