Posts Tagged ‘Alabama’

Alfa Raises Homeowners Insurance Rates in Alabama

September 9th, 2011 by Iris | Comments Off | Filed in homeowners insurance, insurance news

Alabama homeowners, especially those with landlord and farm policies, will be seeing insurance rates that are about 20% higher if their coverage is through Alfa Mutual Group.

According to the Alabama state actuary, Charles Angell, this increase is not designed to account for losses caused by a spate of tornadoes which struck the state last April. In fact, he says, all insurers in Alabama will be able to offset only a fraction of such losses via upcoming rate requests.

Nevertheless, according to Alfa spokesperson Jeff Helms, the increase in the severity and frequency of such storms is putting pressure on insurance rates.

Alfa is an affiliate of the Alabama Farmers Federation, and the new, higher rates actually went into effect on September 1st.

Charles Angell insists that his calculations support the rate hike.

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Alabama Has Been Paid, BP Says

November 11th, 2010 by Iris | Comments Off | Filed in business insurance, world events

Representatives of BP, the oil company responsible for the Deepwater Horizon catastrophe in the Gulf of Mexico earlier this year, said it’s paid more than $657 million to the state of Alabama for claims, grands and recovery costs.

The petroleum company released those numbers among other updated figures earlier this week, and said that the largest chunk of money, roughly $420 million, went directly to individuals and businesses filing claims.

According to BP, almost $127 million was paid to people working in the Vessels of Oppurtunity program, in which boat captains and commercial fishermen helped recover the oil from the water. The company also said that $22 million was used to help the tourism industry in Alabama.

Last Friday, however, the head of Gulf Shores and Orange Beach tourism said that Baldwin County’s lodging revenues had fallen by 33%, costing them roughly $58 million.

Alabama governor Bob Riley recently chastised BP for its claims fund process, stating that it speeds up when a meeting is called to air complaints, but slows down again just after.

BP has not commented on the governor’s opinion.

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Alabama Wind Pool Changes Policy on Buildings In/On Water

October 25th, 2010 by Iris | Comments Off | Filed in insurance news, wind insurance

The Alabama Insurance Underwriting Association, that states last-resort insurer for such policies, announced on Friday that it would no longer be issuing policies for buildings built over or in water.

According to association manager Bob Groves, while they provide coverage for wind damage, they are concerned about water undermining the structure of buildings.

Current policy holders will be able to retain their coverage – even on buildings in or over the water – as long as they maintain ownership and keep their premiums current, but if the buildings are sold, the association will not cover the new owners, and if water encroaches upon a building that is currently on land, coverage will be dropped.

It is estimated that less than 400 of the 18,500 polices the association has issued will be affected by this change.

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Alabama Buys Hurricane Insurance

August 9th, 2010 by Iris | Comments Off | Filed in insurance news

I didn’t know an entire state could purchase hurricane insurance, but according to the Insurance Journal, the state of Alabama has done just that.

Under a deal that took effect last month, Alabama will pay $800,000/year for three years to global insurer Swiss Re, as a hedge against heavy hurricane damage to state-owned coastal property. In the event of a Category 3 or 4 hurricane with winds between 110 and 155 mph, Swiss Re will pay the state $5 million. If a Category 5 hurricane (with winds in excess of 156 mph) hits the Alabama coast, the payout would be $10 million.

Officials from the State Finance Department told the press that the money would be used toward all or part of the deductible that the state pays on it’s traditional coverage of state property, which includes parks, schools, and government buildings. According to Finance Department attorney Richard Cater, Alabama has a $10 million deductible for each named storm.

Swiss Re said that Alabama is the first U.S. state to purchase this sort of coverage, known as “parametric insurance,” but that similar policies have been issued to governments in Mexico and the Caribbean.

Nikhil da Victoria Lobo, a vice president of Swiss Re, told the press, “Swiss Re has provided these solutions across the globe to multiple governments, but has just recently begun this dialogue in the U.S. The state of Alabama initiated discussions with Swiss Re.”

Bill Newton, Alabama’s State Finance Director, said that Swiss Re was not the only insurer offering proposals when his state began looking for this type of coverage, but that their policy was based on an analysis of previous storm damage from hurricanes hitting the Alabama coast.

Swiss Re is the company that former Alabama Insurance Commissioner Walter Bell joined in 2008 when he left his state post to become chairman of the holding company for Swiss Re’s North American business. But da Victoria Lobo and Cater both said Bell was not involved in negotiating the contract.

Swiss Re representatives said that the policy allows the state to get paid quickly and avoid unpredictable expenses.

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