Archive for March, 2011

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California Senators Introduce Earthquake Insurance Affordability Act

March 22nd, 2011 by Iris | Comments Off | Filed in earthquake insurance

Last week, Democratic U.S. Senators Barbara Boxer and Dianne Feinstein, both form California, introduced a new piece of legislation designed to reduce the cost of earthquake insurance for Californians and other individuals who buy earthquake insurance coverage from non-profit, state-run, earthquake insurance programs.

The legislation, dubbed the Earthquake Insurance Affordability Act, allows the California Earthquake Authority (CEA) and other non-profit insurance programs, access to federal loan guarantees in order to more efficiently and effectively capitalize for catastrophic earthquakes. Doing so would allow such programs to reduce the rates homeowners must pay, and empower more people to buy insurance in anticipation of the next major earthquake to strike California.

Senator Feinstein said, “The tragedy and devastation of the recent earthquake in Japan was a real wakeup call. “We cannot prevent an earthquake, but we must do everything we can to prepare for one by ensuring homeowners have access to affordable earthquake insurance coverage.”

“This legislation will allow homeowners to get back on their feet and recover more quickly in the event of a significant earthquake,” she continued.

Senator Boxer also spoke about the legislation, saying, she was, “…proud to join with Senator Feinstein to introduce legislation that would help homeowners in California access affordable earthquake insurance, which is critical to helping residents and communities recover and rebuild after the devastation of an earthquake.”

During the first five years the Act is in force, there is a potential savings of roughly half a billion dollars in reinsurance costs, which would be passed on to consumers as lower rates. The CEA could cut premiums by as much as 30% or reduce deductibles by as much as 50%, which would allow at least 700,000 additional California homeowners to afford earthquake insurance.

Even better, federal taxpayers won’t be footing the bill: the entire cost of the loan guarantees and the administration of the program will be covered by the participating state programs.

In addition, enacting the Earthquake Insurance Affordability Act, and increasing the number of people covered by earthquake insurance, will reduce the government’s cost of disaster recovery. This is because FEMA can’t may payments to people who have such coverage, which means every homeowner with earthquake insurance is one less that FEMA might have to supplement when a disaster-causing earthquake strikes.

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Dumb Insurance Fraud Cases

March 21st, 2011 by Iris | Comments Off | Filed in auto insurance, homeowners insurance, insurance fraud

Okay, we know that insurance fraud – whether it’s related to health insurance, auto insurance, or both, is a serious subject, and is costing many people a lot of money in increased premiums, but sometimes you just have to laugh, so we’re celebrating the first Monday in Spring with a little levity.

Here as reported to the Coalition Against Insurance Fraud, are four of the dumbest insurance fraud cases in recent history. Enjoy!

  • A correction officer and native of Naugatuck, Conn. was defrauding his place of business by fraudulently collecting $5,000 in workers compensation, claiming he was injured on the job. That was until he showed up on TV in drag running a 40-yard dash trying to win tickets to a Hannah Montana concert. He had almost got away with it, until a photograph of him running in drag to win concert tickets showed up in the local paper.
  • Most believe this type of behavior is nothing more than an urban legend… but think again. Carla Patterson, a woman from Virginia, allegedly found a rodent in her soup while having dinner at Cracker Barrel restaurant. Naturally, she demanded the restaurant give her a $500,000 business liability insurance payout for her emotional trauma. Following an autopsy of the renegade rodent, it was discovered the mouse did not have soup in its lungs, so it did not perish from drowning in Patterson’s vegetable soup. Patterson was charged with insurance fraud and spent a year in jail.
  • A couple in Massachusetts, Ronald and Mary Evano, took to glass eating in order to scam grocers, restaurants, bars and hotels out of insurance money. In almost every instance, the establishments involved in the case, simply paid up in order to avoid a lawsuit. When it was all said and done, the duo collected nearly $200,000 in fraudulent claims using bogus identification and social security cards. While Ronald was incarcerated in 2006 for the scam, Mary was on the lamb until recently. She was finally arrested in 2010 and charged with insurance fraud.
  • Loose lips do indeed sink ships… Just ask Michael Paul Schook, a Suffield, Conn. ex-con who decided to evade his mounting debt and a home that was going into foreclosure by burning it to the ground. In order to collect $250,000 in homeowners insurance money, Schook left a fat-filled pan on the stove before he left the house for an outing with his family. The house burned down, but unfortunately Schook was so impressed by his own brilliance, he told all the locals about his plan to burn down his house. Even his children told schoolmates of the deed. In no time, school officials called the authorities and Schook was charged with insurance fraud and spent seven years in prison for the staged fire.

Friday Filmstrips: Flood Insurance

March 18th, 2011 by Iris | Comments Off | Filed in flood insurance, friday filmstrips

Spring is almost here! The sun is shining, the snow is melting, and oh, yes, the rivers are rising. If you live in a flood zone, and you don’t have flood insurance, you should consider purchasing it. After all, it takes 30 days before flood insurance goes into effect, as this week’s video shows. Enjoy:

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Blue Shield Cancels Rate Hikes

March 17th, 2011 by Iris | Comments Off | Filed in health insurance, insurance news

Blue Shield of California announced earlier this week that it has canceled health insurance premium increases that averaged 6.5 percent and went as high as 18 percent.

The increase would have affected almost 200,000 Blue Shield customers, and would have been the insurer’s third such increase in recent months. The decision to cancel this increase was influenced by pressure from California state officials, and by opposition from policyholders, the Los Angeles Times said, yesterday.

Insurance industry analysts don’t believe this rate increase cancellation will cause much financial impact to Blue Shield, since it’s been paying out less money in medical claims than it anticipated when building the year’s budget. In fact, medical spending has been lower than expected lately for WellPoint, Inc., and Aetna as well as Blue Shield – saving all three companies millions of dollars, although officials at those companies say that it’s not because people are healthier, but rather that more people are choosing not to have health insurance.

As WellPoint spokesperson Kristin Binns said, “In times of recession, you see people choosing to forgo elective procedures because of their budgets.”

Some analysts say that if people continue to base their medical decision on economics, it could slow the rise of health care costs.

“This is a win-win potentially for both health insurers and the insured,” said Gavin Magor of Weiss Ratings in Jupiter, Fla. His company reported that hundreds of insurers across the nation saw no rise in benefits payouts last year.

However, other analysts warn that this trend also comes with the risk that people will skip vital care.

Explains Shana Alex Lavarreda of the UCLA Center for Health Policy Research, “When you put preventive services off, you put off appropriate care that may have helped save you from having a more costly condition.”

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52 Million American Adults Uninsured in 2010, Study Says

March 16th, 2011 by Iris | Comments Off | Filed in health care reform, health insurance

Want to hear something really scary? A new study says that roughly twenty percent – or nine million out of 43 million adults who lost jobs in the last two years – ended up without any health insurance, and that nine million represents 57 percent of everyone who lost their insurance when they lost their jobs, at least according to the healthcare research and reform advocacy group The Commonwealth Fund.

Further data from the study showed that 25 percent of people who lost their employer-sponsored health insurance were able to find other coverage, while 14 percent paid COBRA premiums to keep their job-based coverage. For many others, however, 16 million out of an estimated 26 million adults who tried to buy health insurance on the individual insurance market in the last three years found it difficult or impossible to find coverage they could afford, and 9 million said they were either turned down or charged more because of an existing health problem, or had a pre-existing condition excluded from their new policy.

The data gets worse. According to the survey 52 million American adults had no health coverage at some point in 2010 while the number of uninsured adults was only 38 million in 2001. The most likely people to be uninsured were adults in families with low-to-moderate incomes (under $44,100/year for a family of four) with 54 percent of lower income adults and 41 percent of moderate income adults being uninsured, while only 13 percent of adults with higher incomes lacked insurance coverage.

Further information from the survey says that 73 million people were either paying off medical debt or were having trouble paying medical bills, while 25 percent of adults with chronic conditions either skipped regular medications, or skipped filling a prescription.

Sara Collins, the author of the study and vice president of the Commonwealth Fund, explained, “The survey shows that over the last decade, increasing numbers of people across the income spectrum went without health insurance, avoided timely health care because it was too expensive, and struggled with medical debt. Millions of working families reported making difficult trade-offs between paying off their medical debt, buying other life necessities, and saving for the future.”

Collins also said that last year’s federal health care reform laws will, “…ensure that families will have the financial means to get the health care that they need, both in good economic times and bad.”

Well, unless the Republicans in Congress don’t kill it.

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GeoVera Brings Windstorm-Hurricane Insurance to Hawaii

March 15th, 2011 by Iris | Comments Off | Filed in flood insurance, homeowners insurance

Hawaiian property owners may be pleased to know that GeoVera Insurance has expanded into the state, bringing with it a residential windstorm-hurricane insurance product. These policies will insure residential real estate against wind during a hurricane. GeoVera will be partnering with local independent agents to offer the product.

The windstorm-hurricane coverage will apply to the actual dwelling, other structures, contents and loss of use (or fair rental value) and can be purchased for homes with values up to $1 million. Available deductibles will range from 2 to 5 percent, and homes that are fitted with wind-resistive devices may receive a credit.

Like flood insurance, this is a “single peril” product – it only applies to wind damage in hurricane situations.

GeoVera does most of its business in “catastrophe exposed” regions, and, as of last June, had an A- (excellent) rating from A.M. Best Co.

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US Tsunami Damage Exceeds $50 Million, Estimates Say

March 14th, 2011 by Iris | Comments Off | Filed in earthquake insurance, flood insurance

While the United States did not see anything close to the damage that continues to worsen in Japan, but estimates say that tsunami waves that followed Friday’s earthquake have caused more than $50 million in damage in the western part of the country.

Governor Neil Abercrombie, in Hawaii, issued an emergency proclamation that will allow his state to seek federal aid, after harbor facilities and boats were damaged, and homes and hotels were flooded.

Ed Teixeria, vice director of Hawaii’s State Civil Defense says the initial property damage estimate for state-owned property is at least $3 million. Privately-owned property is still being assessed.

According to Teixeria the piers in Keehi Lagoon and a small harbor in Haleiwa, both on Oahu, were among the areas suffering the most damage, while seven homes were flooded, and one dragged out to sea in Kealakekua Bay on the Big Island of Hawaii. As well, he said, nine cars were also flooded there, with one dragged into the bay, and the commercial side of the harbor also saw damage.

In Oregon, Governor John Kitzhaber and U.S. Senator Jeff Merkely also requested disaster declarations, in order to begin recovery programs for residents. Oregon officials estimated an excess of $10 million in damage at Ports Orford, Gold Beach, and Brookings.

As well, a man from Bend, OR, who ignored warnings to avoid the beach, was washed out to sea while attempting to take pictures of the tsunami waves.

California also saw damage. Governor Jerry Brown has declared a state of emergency in Del Norte, Humbolt, San Mateo, and Santa Cruz counties. There was at least $17 million in damage to the Santa Cruz harbor with 50 damaged boats, and 17 that completely sank. That estimate, however, does not include the “full extent of damage and the impact to personal property,” where are still unknown.

The Santa Cruz harbor has been designated a Coast Guard Safety Zone, and has been closed to all vessel traffic until oil and debris removal has been completed, and pollution and public safety issues have been addressed, along with the removal of any navigational hazards.

Japan’s earthquake and tsunami losses are estimated at between $15 billion to $35 billion.

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