Insurance Reform - Louisiana 2007-2008

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Citizens raises policy premiums
Statewide average boosted 18 percent
By Rebecca Mowbray - Times-Picayune, June 24, 2008

Homeowners insurance rates at Louisiana Citizens Property Insurance Corp. will increase by a statewide average of 18 percent in October as premiums at the state-sponsored insurer catch up with the dramatic run-up in prices from private companies after Hurricane Katrina. Read more . . .

Private insurers relieve Citizens
Insurance companies take post-storm load
By Rebecca Mowbray - Times-Picayune (New Orleans, Louisiana), June 3, 2008

Private insurance companies took over responsibility for about 28,000 policies in Louisiana Citizens Property Insurance Corp. as of Sunday, the start of the Atlantic hurricane season. If a storm strikes this summer, those private companies will be the ones to handle people's claims, said John Wortman, chief executive of Citizens, the state-sponsored insurer of last resort. Read more . . .

New insurers seize opening
Consumers urged to assess reliability
By Rebecca Mowbray, Times-Picayune (New Orleans, Louisiana) June 1, 2008

While big insurance companies have mostly stopped writing new homeowners policies in south Louisiana, a renegade group of mostly start-up insurance companies is marching into the disaster zone to fill the void. Most of them hail from Florida, where about 25 new property insurance companies were formed in the last two years as big players exited the market. Read more . . .

Court rules in favor of Citizens
Insurer not bound to pay policy in full

By Rebecca Mowbray - Times-Picayune (New Orleans, Louisiana), May 22, 2008

Louisiana Citizens Property Insurance Corp. is not required to pay the full value of the homeowners insurance policy to a Vermilion Parish couple who lost their home in Hurricane Rita, the Louisiana Supreme Court ruled Wednesday. Read more . . .

Opinion on valued policy awaited
29 insurers: Law just applies to fires
By Rebecca Mowbray - Times-Picayune (New Orleans, Louisiana) May 21, 2008

A late-in-the-game curve ball in a key insurance case on Louisiana's controversial valued policy law has lawyers all over town wondering what the state Supreme Court might do if it issues an opinion today.

. . . In a surprise turn of events shortly after, Citizens and 28 other insurance companies banded together and adopted a position argued in an amicus brief by the American Insurance Association that the valued policy law only applies to fire losses, not windstorm losses. In other words, the valued policy law has no application to damage from Hurricanes Katrina and Rita. Read more . . .

Same house. Same repairs. Same insurer. Why different prices?
Evidence suggests Allstate pays far more for flood repair than for wind damage. The reason? The government picks up the flood tab, and the company minimizes its own payout.
By Rebecca Mowbray - Times-Picayune, May 20, 2007

For every dollar paid out of the federal treasury under flood, Allstate takes a credit and keeps a dollar. Essentially Allstate is profiting at the expense of the American taxpayer."

JOHN DENENEA
attorney for couple suing Allstate

Something about the insurance settlement on the Slidell townhouse seemed fishy to Chris Karpells, a prospective buyer who would be collecting the insurance money as part of the deal. As he pored over the fine print, what caught Karpells' eye was this: Allstate seemed to have two different ways of pricing the damage repair costs, depending on whether the damage at 286 Marina Drive was chalked up to flooding or wind. Read more . . .

Inflated flood claim turns up at trial
Allstate contents list is news to owners
By Rebecca Mowbray - Times Picayune (New Orleans, LA), May 20, 2008

Fishing poles and fancy furs weren't the issues at trial. Instead, Merryl and Robert Weiss had gone to court to fight the contention by their insurer, Allstate, that they were entitled to only a pittance under their homeowner policy because flooding, not wind, was largely responsible for the destruction of their home on Slidell's Treasure Isle. But about a month before trial, Merryl Weiss realized there was something wrong with the payment for household contents that they had received on their obliterated Slidell home.

In making the claim under their taxpayer-subsidized National Flood Insurance policy, Weiss had given Allstate a handwritten list of belongings from the ground floor of the three-story house -- most of it rods, reels and other gear owned by her husband, a retired doctor who is a die-hard sport fisherman with a charter boat license. She valued the lost contents at $38,848.35. But as documents were being flashed in front of her for identification, Weiss was shown a typed property-loss worksheet totaling $139,562. Read more . . .

Citizens CEO gets 10% raise
Insurer lines up catastrophe plan
By Rebecca Mowbray - Times-Picayune (New Orleans, Louisiana), May 13, 2008

BATON ROUGE -- Louisiana Citizens Property Insurance Corp. was able to collect an extra $4 million in reinsurance from the 2005 storms after discovering about 350 to 400 Hurricane Rita claims had been improperly classified as Katrina claims. John Wortman, chief executive of the state-sponsored insurer of last resort, said Citizens was able to collect the extra money because it had exhausted all of its reinsurance on Katrina claims, but not on Rita claims. In recognition of Wortman's successes, including his recent unearthing of the extra reinsurance money, the board approved a 10 percent raise for him . . . Read more . . .

Below I-10, insurance hard to find, hard to fund
By Mark Ballard - The Baton Rouge Advocate (Louisiana), May 11, 2008

The deductible for hurricane damage - the portion the homeowner pays before the insurance policy kicks in - rocketed from $500 to $11,000. Read more . . .

Senate blows down wind insurance
New panel to study coverage on coast
By Bruce Alpert - Times-Picayune (New Orleans, Louisiana), May 8, 2008

The Senate on Wednesday overwhelmingly rejected an effort by Gulf Coast lawmakers to add wind coverage to the federal flood insurance program after some members expressed concern that the costs could bankrupt the program.

While the House had voted to include the expanded coverage, the Senate vote against the provision was 73-19. Read more . . .

Insurers to get Citizens policies
Coverage moved to private carriers
By Rebecca Mowbray - Times Picayune (New Orleans,Louisiana) May 6, 2008

Responsibility for about 30,000 homeowners insurance policies is expected to be transferred from Louisiana Citizens Property Insurance Corp. to private insurers that won incentive grants from the state starting on June 1, shrinking the state-sponsored insurer of last resort to nearly its pre-Katrina size. Read more . . .

At Their Limit
As local homeowners insurance rates continue to rise, the elderly and others on limited incomes are fighting to keep their finances afloat
By Rebecca Mowbray - Times Picayune, February 17, 2008

Lucille Segura couldn't have been happier when she moved back into her rebuilt Gentilly home in October after Hurricane Katrina filled it with 9 feet of water and sent her on a two-year journey from Baton Rouge to Maryland to Houston to a trailer in New Orleans. But now, the rising cost of homeowners insurance plus payments for flood insurance coverage that she lacked when the storm hit are making it difficult for her to stay. Segura, 69, pays $3,662 a year to properly insure her home, or $305 a month, while she earns just $617 a month from Social Security. Read more . . .

Not minding the store
EDITORIAL - Times Picayune (New Orleans), February 02, 2008

The Federal Emergency Management Agency is stubbornly ignoring mounting evidence that it has poorly run the flood insurance program, and it's time the White House and Congress force the agency to change its ways.

For months reports from government investigators as well as whistleblower lawsuits have exposed how FEMA's lax management of the program is likely wasting billions in taxpayers' money. Yet to this day, the agency's brass refuse to investigate or correct problems. Their lackadaisical attitude with the taxpayers' money is unacceptable.

The most recent criticism came last week from the Government Accountability Office. In a report, the GAO pointed to the "inherent conflict of interest" that exists when the same private insurer determines flood damage, which is covered by the government, and wind damage, which is covered by the private insurer. GAO investigators concluded that insurers who provide wind coverage "have a vested economic interest" in determining which damage was caused by flood or wind. The report recommended that FEMA obtain wind damage files from private companies to check whether taxpayers have gotten fleeced. Read more . . .

GAO report warns of insurer bias on flood claims, recommends reforms
By Rebecca Mowbray, Times-Picayune (New Orleans, LA) January 31, 2008

An inherent conflict of interest exists when private insurance companies process claims for the National Flood Insurance Program, the Government Accountability Office said Wednesday. Read more . . .

Editorial: Where's the outrage?
Times Picayune (New Orlean,LA), June 10,2007 D

Despite eye-popping allegations that eight major insurance companies improperly shifted what could total billions of dollars in Katrina claims to the federal government's flood insurance program, no one in government seemed to be riled up about the matter. That should change now. Read more . . .

Judge prods feds in flood insurance case
Justice Department urged to play active role in whistle-blower suit
By Rebecca Mowbray - Times Picayune, June 08, 2007

The federal judge who unsealed a whistle-blower case last month about insurance companies allegedly overbilling the National Flood Insurance Program is demanding that the U.S. Department of Justice get involved in the case or explain itself. The unusual move comes from U.S. District Judge Peter Beer, who unsealed a case in which a group of former insurance adjusters say that they have collected evidence that insurance companies have defrauded taxpayers by overbilling the federal flood program while underpaying claims for Hurricane Katrina wind damage to save the companies money. Read more . . .

Insurers bilked flood program, suit says
Adjusters say wind claims underpaid
By Rebecca Mowbray - Times-Picayune, May 31, 2007 A newly unsealed whistleblower lawsuit claims that at least eight major insurance companies in Louisiana and their adjusters are ripping off the federal government by overbilling the National Flood Insurance Program for Hurricane Katrina flood damage while stiffing homeowners on wind damage payments under their homeowners insurance policies. Read more . . .

Inflated flood claim turns up at trial
Allstate contents list is news to owners
By Rebecca Mowbray - Times Picayune (New Orleans, LA), May 20, 2007

Fishing poles and fancy furs weren't the issues at trial. Instead, Merryl and Robert Weiss had gone to court to fight the contention by their insurer, Allstate, that they were entitled to only a pittance under their homeowner policy because flooding, not wind, was largely responsible for the destruction of their home on Slidell's Treasure Isle. Read more . . .

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