Neighbors Ins in the news »»
Citizens Property Insurance piles up risks, policies »»
Direct-to-Consumer eHealth Focused on Uninsured »»
Auto insurance rates stable for many »»
How Do I File a Homeowners Claim? »»
Many older Americans don't understand perils of not having Long-Term Care Insurance »»
Progressive Web Site Earns Award »»
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Citizens Property Insurance piles up risks, policies
Nov. 7--As state-run Citizens Property Insurance Corp. reluctantly pads its lead as the largest property insurer in the state, its risk exposure is also piling up at record levels.
That exposure last week had ballooned to $396.5-billion on 1.3-million policies, nearly twice what it was at the end of 2005.
The insurer of last resort also has to change the way it charges customers for its policies next year, taking into account whether property owners use a home as a permanent residence.
What does all this mean for policyholders? Higher rates for most, and as much as a 90 percent assessment for some if the state is hit by a series of major storms next year.
"This is an indication of what we've been saying about how troubled this market is," Citizens spokesman Rocky Scott said Monday. "We don't have an insurance crisis in Florida; we have an insurance catastrophe."
Which Citizens policyholders take the biggest hit next year will have a lot to do with the homestead exemption. Citizens had not drawn distinctions between homestead and nonhomestead property. But the Florida Legislature changed that in May, placing a greater burden on owners of nonhomesteaded property such as vacation homes and rental property.
And not just in higher rates.
Each time there is a shortfall in any of the three Citizens accounts, an assessment process will be triggered. First to be assessed are nonhomesteaded policyholders, followed by homesteaded policyholders, policyholders in all Citizens accounts and, finally, all policyholders of any insurance company.
"If you get repeated deficits in all three accounts, you potentially expose owners of nonhomesteaded properties to a 90 percent assessment of their premiums," Scott said.
Citizens took in 72,000 policies in September and is quickly approaching 1.5-million policyholders, well ahead of the nearly 1-million policies held by second-ranked State Farm. Most of Citizens policies are in high-risk areas abandoned by private insurers, but a growing number of new policies are outside that area.
The company will take in close to $4-billion in premiums this year, but when compared to its mammoth exposure, $4-billion becomes a relatively small number.
Citizens is also charged for the first time with verifying which of its properties have the homestead exemption and which don't. The company recently sent 180,000 letters to policyholders asking if the property was exempted, and soon plans to send out about 300,000 more.
The process is slow, Scott said, because Citizens has about 750 employees, far fewer than private companies that have a similar number of policyholders.
Earlier this year, regulators granted Citizens an average statewide rate increase of 25.9 percent, which goes into effect Jan. 1.
But the company, which by law must have rates as high as the top 20 insurers in a given territory, will ask for another, as yet unspecified, rate increase sometime before March based on standards that were also changed by the Legislature last spring.
Source: St. Petersburg Times (FL) (KRT)
Direct-to-Consumer eHealth Focused on Uninsured
Mountain View, Calif. - eHealth Inc., the parent company of eHealthInsurance Services Inc., spent $50 million developing an electronic platform to sell health insurance through the Internet. The company’s business model? Serve the growing market of uninsured and underinsured consumers with online tools and ultimate health insurance products.
The Mountain View, Calif., company, plans to raise $47.1 million in an initial public offering next week. In its prospectus the market for private health insurance brokering is a mess, stating that except for large companies buying insurance in bulk, finding medical coverage is time-consuming, paper-wasting, complicated and expensive.
Most individuals, families and small businesses who buy their own medical coverage find insurers using local agents who serve a single community, offering insurance from a small handful or even a single insurance carrier.
Through its Web site, eHealth has sold health insurance electronically to 325,000 consumers, and points to an this statistic: More than 40% of those customers were uninsured before finding the site.
That means the company thinks its site, which offers 5,000 health insurance products through 150 insurers, including Aetna and UnitedHealth, can tap into an underserved and fragmented corner of the estimated $658 billion market for private medical insurance.
About 17 million Americans, including self-employed people, buy their own medical insurance (as opposed to electing coverage through an employer's plan), and the company said that number is growing.
A rising number of small businesses have stopped offering medical benefits to employees, forcing these people to buy their own coverage or risk life without insurance, the company said.
The U.S. Census estimates 46 million Americans are uninsured, and the company said many of these people have jobs, make decent salaries and would buy their own coverage if only they could find an affordable plan.
That's where eHealth's business model comes in. eHealth's site offers online rate quoting and information, health plan comparisons, and online applications linking consumers with insurers. The variety of policy offerings and efficient brokering process in theory would help consumers find cheaper coverage.
As a broker, eHealth offers insurers new market opportunities, access to electronic data about consumers and simplified policy processing, which reduces costs.
The company takes a percentage off the insurers' premiums. In 2005, eHealth booked $41.8 million in revenue, almost all from brokerage commissions, compared with $9.3 million in 2001. For the six months ending June 30, 2006, eHealth reported net income of $2.7 million, compared with a net loss of $209,000 for the same period a year ago.
The company, led by Chief Executive Gary L. Lauer, has lost money most quarters since its 1997 founding as it sinks money into technology and marketing through direct mail, television and radio. But it hopes that by harnessing the Internet, it can grab a large share of a huge and largely untapped market.
The company plans to sell 5 million shares at $10 to $12 apiece, giving the deal a proposed market cap of $271 million, and is reportedly using joint-lead managing underwriters such as Morgan Stanley and Merrill Lynch. The stock will trade on the Nasdaq under the symbol "EHTH."
Source: Associated Press, MSN Money, Red Herring
Auto insurance rates stable for many
Jolted by high gas prices this year, car owners are at least getting some insurance relief. Auto policies arAmericans.e basically flat or falling for many
This year, the cost of auto insurance on average will rise only 0.5% — the smallest increase in six years, according to an estimate of the Insurance Information Institute out Monday.
It predicts a 0.5% decline for auto rates next year, the first drop since 1999.
The projections are based on recent auto claims and other information, as well as the national report of auto insurance rates released last week by the National Association of Insurance Commissioners. In 2004, the latest data available, the average annual cost of auto insurance was $838 per vehicle.
Individual premiums vary widely. Bryant Jaggers of Aurora, Colo., saw a "pretty significant" drop in his rates this year. State Farm Insurance cut his premium for four cars by about $500.
A chief reason for tumbling rates is a decline in auto accidents, in part due to safer cars and roads. "We've had many technological innovations … helping vehicles avoid an accident and helping reduce or eliminate injuries of the occupants," says Robert Hartwig, chief economist of the institute.
The decline in accident rates is also attributed to some states barring or restricting late-night driving by teenagers. Although such programs have been in place for a while, they're finally starting to have an impact on insurance rates, Hartwig says. Other factors affecting rates:
• New Jersey, for years one of the most expensive states for auto insurance, is allowing more firms to do business in the state. That's brought more price competition. "We had just a tight stranglehold of regulation," says Steven Goldman, commissioner of the New Jersey Department of Banking and Insurance.
• In September, California implemented a law that prohibits insurers from determining auto rates based on people's ZIP codes rather than on how safely they drive. Insurers have since filed for rate cuts totaling $1 billion, according to the California Department of Insurance.
• In New York, rates are dropping because of a state crackdown on auto fraud and abuse. In July, for example, the state indicted 17 people and three corporations on charges of operating an auto insurance fraud ring.
Some say the drop in auto rates is not steep enough.
They note that the property and casualty industry had a profit of $15.1 billion in the first half of the year, according to the Risk and Insurance Management Society. "Rates should be down quite a bit more," says Robert Hunter, director of insurance at the Consumer Federation of America.
Source: USA Today, Christine Dugas
How Do I File a Homeowners Claim?
If some has become injured on you property or if a violent storm destroys your home, you will need to file a claim with your insurance company. Remember, a homeowners policy is a contract between you and your insurance company. And there are rules and procedures that you and your insurer must follow. Read your insurance policy to see what your responsibilities are.
Report any crime to the police
If you are the victim of a theft or your home has been vandalized or burglarized, report it to the police. Get a police report and the names of all law enforcement officers that you speak with.
Phone your agent or company immediately
Insurance policies place a time limit on filing claims. Find out what the time limit is. Ask questions: Am I covered? Does my claim exceed my deductible? (Your deductible is the amount of loss you agree to pay yourself when you buy a policy.) How long will it tkae to process my claim? Will I need to obtain estimates for repairs to structural damage?
Make temporary repairs
Take reasonable steps to protect you property from further damage. Save receipts for what you spend and submit them to your insurance company for reimbursement.
Prepare a list of lost or damaged articles
You are going to need to substantiate your loss. Avoid throwing out damaged items until the adjuster has visited your home. You should also consider photographing or videotaping the damage. Prepare a home inventory, make a copy for your adjuster and supply him or her with copies of receipts from damaged items.
If you need to relocate, keep you receipts
If your home is severly damaged and you need to find other accomodations while repairs are being made, keep records of all additional expenses incurred. Most homeowners insurance policies provide coverage for the "loss of use" of your home.
Get claim forms
Once your insurance company has been notified of your claim, the company is required to send you the necessary claim forms to you the end of a specified time period. (The time period varies from state to state.) Return the properly filled out forms as soon as possible in order to avoid delays.
Have an adjuster inspect the damage to your home
Your insurance company will probably arrange for an adjuster to come and inspect your home.
Once you and your insurance company agree on the terms of your settlement, state laws require that you be sent payment promptly. In most cases, your claim will be processed quickly. If you have any questions about the claim filing laws in your state, call Neighbor's Insurance Advisors or the Florida Department of Financial Serivces.
Used with permission from the Insurance Information Institute. www.iii.org
Many older Americans don't understand perils of not having Long-Term Care Insurance
Florida has the highest percentage of seniors in the nation, and their numbers will rise by 25 percent over the next 15 years. Yet most older Americans don't know government programs often don't pay for assisted-living or nursing-home care and have no idea what such services cost, a new report has found.
The misconceptions highlighted in the study, released Wednesday by AARP, could spell trouble when the Baby Boomers hit retirement and are financially unprepared, AARP policy experts sai. They are concerned that consumers' knowledge about long-term care has not improved since AARP did a similar study five years ago.
"It's important that people realize the cost of long-term care and have provisions in place, or they can be overwhelmed," said Rhonda Richards, a senior legislative representative with AARP in Washington, D.C.
The Costs of Long-Term Care: Public Perception Versus Reality in 2006 surveyed almost 1,500 Americans 45 and older and closely examined five states, including Florida. Among its findings:
More than half of the Floridians surveyed incorrectly think Medicare pays for long-term nursing home care.
Four in 10 falsely think Medicare covers assisted living costs.
More than three-fourths of residents don't know or underestimate how much nursing home care costs; the average Florida private pay rate is $6,200 monthly.
The report did not make policy recommendations. It also was not commissioned to promote AARP products and services, said Linda Barrett, AARP's senior research adviser at its Public Policy Institute.
But it was unveiled in conjunction with a new AARP Web site, www.aarp.org/longtermcare, featuring consumer-friendly information about care-giving, nursing homes and home care, and long-term care insurance. Visitors also can take an online quiz to gauge their long-term care knowledge.
AARP, which claims almost 3 million Floridians as members, sells long-term care insurance through Metropolitan Life Insurance Co. of New York. The organization's for-profit arm also offers Medicare supplemental policies and Medicare prescription drug plans.
Lori Parham, AARP's interim Florida state director, said she hopes Public Perception's findings will prompt families to discuss care for elderly parents or relatives should they become frail or disabled. Many don't know that there are some government-funded programs that could allow a senior recovering in a nursing home after a hospitalization to return home.
For most people, there are basically three options, when it comes to financial planning for long-term care: Saving more to pay for it, buying private long-term care insurance or shifting assets in advance to qualify for Medicaid.
Medicaid, the state-federal program for the poor, is the only government program that pays for nursing home care and, in Florida, assisted living through a waiver program. But individuals must have very limited incomes and savings to qualify.
Florida's Medicaid program spent $195 million on long-term care last year, with 64 percent of it going to nursing homes.
There has been increasing pressure from the federal government, and some lobbying groups, for people to buy long-term care insurance and ease the burden on taxpayer-funded Medicaid. AARP supports buying such policies, but advocates consumer legislation -- including a bill passed in Florida this year -- aimed at curbing high premium increases.
The law made Florida one of about 20 states with a Medicaid Partnership long-term care insurance program. The policies will be sold by private agents but approved by state regulators, and required to meet certain standards. They should be available next year.
About 17 percent of Florida's population, or about 3 million people, are 65 and older. But Florida ranks 46th in the country in terms of people per 100 residents in the senior bracket who are living in nursing homes, according to Across the States, another AARP report released Wednesday that compares population, health care and long-term care financing statistics.
That's because Floridians rank well above the national average in education rates, household income and home ownership, and have lower rates of sensory and physical disability. Seniors in poverty, living alone, with low education levels and disabilities are more likely to need long-term care services, the report said.
Florida also has the country's highest percentage of senior men, with 56 men for 100 women age 65 and older.
Source: Sun-Sentinel, By Diane C Lade
Progressive Web Site Earns Award
September 29, 2006 - Mayfield Village, Ohio - The Drive Group of Progressive Insurance Cos.'s Web site (www.driveinsurance.com) received a "Standard of Excellence" WebAward in the insurance category from the Web Marketing Association (WMA).
The WMA judged more than 2,300 Web sites from 35 countries that were entered into the 2006 competition. Each site was assigned three or more judges from a panel of independent Internet experts and evaluated on seven criteria including: design, innovation, content, technology, interactivity, copywriting and ease of use.
The judges scored Drive's Web site above the industry average in "interactivity," "design," "content" and "copywriting." One judge said the site "...creates a positive interactive environment for the target audience; navigation is easy to use and fairly consistent."
The Web site enables independent agents to promote their agencies on the Internet through the Web site's "Find an Agent" and "Get a Quote" functions. The site is also designed to help consumers find an agent, get a fast, free auto insurance quote and--if they like the quote--send it to the agent in the form of a referral. Customers can also take advantage of secured access to their Drive policy to view coverage's, make routine policy changes, view and print ID cards and other documents, view claims information and more.
"Drive is a cornerstone of profitable growth for independent agencies, and getting the Standard of Excellence WebAward reinforces that we're meeting one of our key objectives--to provide innovative technology that makes it easy for independent agents to do business with their customers and with us," says Bill Everett, Drive's online experience manager.
Source: The Drive Group of Progressive Insurance Cos.