Skip to comments.Allstate to stop insuring new N.J. homeowners
Posted on 12/08/2006 6:17:12 AM PST by Hydroshock
NEW YORK - Allstate Corp., the largest publicly traded U.S. home and auto insurer, said Thursday it will stop writing new homeowner policies in New Jersey on Feb. 5, citing concern a hurricane might strike the state.
The state's second-largest home insurer after State Farm said the change will not affect 230,000 homeowners who already have policies with the company.
Allstate will no longer write new policies for owners of homes, condominiums, mobile homes and landlords. It said it will also not renew policies for about 300 commercial customers in eight coastal counties.
(Excerpt) Read more at msnbc.msn.com ...
Ok freepers from NJ, what are the nature of the majority of claims that is causing this?
Katrina. Allstate is also pulling out of MS and LA. They are trying to raise rates through the roof in TX and FL.
In a free market, there would be a price at which it is viable for all state or any other insurer to sell their services. We have this problem in Florida too.
Of all the slimeball businesses out there, insurance companies are right up there with oil companies and legal firms.
Do they have a right not insure homes in New jersy - of course they do.
Does New Jersey have a right to retaliate against them? Of course it does. But it won't.
NExt to the New Jersey Education Association, the Cops Unions, the Construction Unions and the Trial Court Attorneys, the Insurnace companies are the highest contributors to the prostitutes who sit in that brothel called the New Jersey State Legislature.
The insurance companies are dropping anyone who might actually make a claim.
We (in other states) need to help them fight this. If they can cherry pick in NJ, the next step will probably be Florida and the Gulf States.
NJ doesn't get that many huricanes ... but boy are the Folks in Jersey gonna be ticked about this
travelers I believe is killing all business insurance in New Orleans next year. Nobody is getting renewed.
We get that all the time from more than just Allstate here in California,
My inlaws have had their house insurance cancelled twice in the last 5 years without filing a claim.
Companies keep splitting whenever there is a big loss here usually earthquakes. Welcome to what we've been working with for a long time.
Any recall of the last hurricane that hit New Jersey? I can't think of any, other than the storm coming up north after already hitting land. Just trying to think of a Hurricane that made landfall itself in NJ and my mind is drawing a blank.
I honestly think that in 5 years the only insurance you will be able to get within 100 miles is government sponsored insurance similar to the flood insurance policies that are out there now.
same with NY.
my agent said they wont cancel existing accounts.
after the 2005 season they must be hurting. It sounds like a reasonable business decision to me.
That may be coming. In fact I think it is.
Yeah, I looked at it, and at rough blush, about 17 people have been killed over the past 50 years from Hurricanes in NJ. Most of these storms hit other states first, and were tropical storms when hitting NJ.
NJ's risk seems really low considering.
I'm thinking Isbelle a few years back .. but don't quote me on that
All-but-one-State is now All-but-two-States. (They stopped writing insurance in the PRM years ago because of the regulatory climate.)
They are pulling out of LA and MS as well.
I read an article that Mexico is another place where people try to soak the system, so insurance companies won't write fire insurance policies there. That's why all Mexican houses are built with brick or cinderblock - no fire insurance. The article was in the San Diego Reader a few years back.
They may have been hurting after 2005 but I understand they reaped windfall profits after a relatively quiet 2006.
Cancel your policy, if you have one with them, or don't buy one from them, encourage others to do so, as well. It's a free (somewhat for now) country. Other than that there is nothing you can do, unless you want to go the statist route, and have the government dictate to them that they HAVE to offer insurance to new homes in high risk area.
They have the right to choose what business they want to offer, and a responsibility to thier share holders, in order to make a profit.
Inland Jersey floods in many areas from storms coming up from the south or over from the west and people keep rebuilding in places that get hit, like along the Wayne river. Coastal Jersey gets hit hard by nor'easters. It's not just hurricanes.
I think you are on to something. These decisions collectively will aid Hillary and her offer of government aid and more and bigger programs.
Its a business. We live in a capitalist free market system.
If that changes, let me know.
For life insurance. Property is another issue. Seems like Allstate's trying to hedge its bets against castastrophic payouts. They lost 3 billion last year. Made a billion back last quarter. Heaven knows how much they need to put away for their rainy-day fund. I kinda feel sorry for the insurance companies actually. People engage in high risk behavior. Are as litigious as heck. Expect other people to pay for their pleasures. Insurance companies exist to make money. Must be hard to do when 9 or 10 figure losses can occur in a few hours.
That's the kind of silly talk one would expect on DU. Insurance companies are in business to make a profit, no other reason. (As are almost all other businesses*.) They would be very glad to write policies if they could collect premiums that offset the risks. Most of the worst risk (Katrina or 9/11 like loses) are reinsured through collabratives likes Lloyds.
Clearly, All-but-some-States does not believe that regulators would allow them to charge premiums that would allow them to make a profit.
*There are exceptions, e.g., Air America.
The overwhelming majority of those in the insurance industry are honorable, and honest people.
If insurors are such "slimeballs", why aren't you self-insuring? What kind of person would continually funnel money to "slimeballs"?
It would be so nice, just for one day, to not hear how Americans are scum. You have made it clear that today will not be that day.
Allstate is worthless anyway. Homeowners will be better served with another insurer anyway. We plan to change insurers as soon as we move and never, ever insure with them again.
FREE National home insurance.
And Texas. They are not writing any "Windstorm" policies either.
Insurance is nothing but a racket. They are no better than the trial lawyers on the other end of the spectrum. Pay premiums up the wazzo for years and never file a claim. Then when you file one, they give the finger salute and raise your premiums to make you drop their policy or they give you notice they are cancelling your policy. Yet none of these big insurers are anywhere close to being in the red, nowhere close.
Not insuring high risk properties lowers rates for those who aren't high risk. It is as simple as that.
I agree they have a right to carry who they choose but the public has a right to change carriers. If they don't want the new owners, the other companies may follow suit. Saying well this doesn't affect me so I don't care, is just letting a foot in the door IMO. No, I don't want the government involved but they already are. We can't get flood insurance anywhere else. Is hurricane insurance next?
No matter where you live, you are a high risk for something and we all carry the load.
This is becomming SOP here in NJ! Prefered Mutual cancelled our Business Owners Policy two months after 9-11. We never, ever filed a claim. I guess owning a retail business in "rural" Sussex County, NJ is too much of a risk.
That's strange because I didn't think that acts of war were covered to begin with.
I quit Allstate after 30 years.
Their rates are outrageous.
I had one claim for a hail damaged roof and they kept trying to recoup those costs by rate increases.
I now have a new home twice the size of the last one at half the premium of the old one.
FOr insurance to work, the total you receive from them in claims has to be less than the total paid in in premiums.
Since almost any complete loss of a house will far exceed the amount paid in by the homeowner in their entire lives, it is clear that most everybody else should feel "ripped off" by their insurance. For example, if you are paying 1000 a year (I used to be less than half of that, and I don't think I'm that expensive yet), and you pay for your entire life, that's less than one hundred thousand dollars, and you'll collect a lot more than that if your house burns down.
I think I'm even ahead right now with my car insurance, having totalled a brand new car two years ago and getting the full retail price out of my company. I'm also even with my homeowners, having gotten money to repair hail damage a couple of years ago, it wasn't that much but as I said I haven't paid that much.
But if you think the insurance company is ripping you off, just don't buy insurance, or find another company. It would be EASY to do so, if the states weren't so over-regulating the industry which makes it hard for small companies to break into the business.
my take is that based upon passed experience with Allstate, they are looking for a rate hike and need to give their people in the legislature some reason to grant it.
Is New Jersey a "risk", or is it just that the government their has made it so hard to sell insurance for what it costs that it's not worth it?
There's a reason Allstate pulled out instead of just raising their rates. Usually it's because a state has ruled that all people in their state must get the same rates, and the company can't get people who live in areas NOT at risk to pay enough extra to cover the cost for those who live on the shore where there is a lot of extra risk.
I wonder if that's what happened in New Jersey.
May be a simplistic solution, but I'm in Florida and have thought for a long time, if they want to get out of the homeowner's market fine. But keep them from writing any other type of insurance in the state as well, like auto, etc.
Insurance companies cherry pick.
Our rates went up significantly in Florida due to hurricanes in the past few years. What if we don't have any hurricanes (as in last season) or minimal hurricanes for the next few years? Will the rates go down to reflect their savings....I don't think so!
My car insurance company pays out money if they have a good year, I've received checks from them in the past.
Our Business is located about and hour and a half from ground zero. Possibly it was just coincidence. Our new carrier charges us three times the amount of the original premium.
"The overwhelming majority of those in the insurance industry are honorable, and honest people."
You can say that about Muslims also. but the ones who are not can sure make up for the good ones.
My life insurance company is ripping me off. I pay and pay and pay and never get anything from them. :-)