Beam me to Planet Gore !
Posted on 02/05/2008 4:22:45 PM PST by Constitutionalist Conservative
Now we know why Allstate wanted a 42-percent increase in home insurance rates. The company is using an unapproved model that factors the growing threat of global warming.
Last month, company executives objected to a Senate subpoena. The state tried to suspend their license, and Governor Crist threatened to sue them.
Now Allstate executives said they aren't price gouging. They say they're just very concerned about climate change, and trying to make sure they keep rates in tune with the growing threat. The ocean is a hurricane's fuel tank. Warmer waters could mean more and stronger storms (though this is currently a subject of scientific debate).
"It's my professional opinion and others at Allstate, it appears that the increase in sea surface temperatures and the near term effect of hurricanes is something that is real and is a need that we need to consider for the protection of our insurers," said Allstate Floridian's Ryan Michel.
Allstate executives also said they took a beating in Florida from the hurricanes of 2004 and 2005.
"The Allstate Floridian companies paid out a million dollars more in claims it received in premiums in 2004 and 2005 totally exhausting its capital," said Allstate Floridian CEO Joe Richardson, "If not for a substantial infusion of capital from Allstate Insurance Company our parent company in the form of a not, Allstate Floridian would have been insolvent at that time."
The past two years have been calm, and the property insurance industry scored record profits.
Regulators tried to suspend Allstate's license for refusing to testify. A judge let them keep it until the case is worked out in court.
AGW ping
Is someone forcing people to buy Allstate homeowner’s insurance? If their rates are too high why can’t people just buy from someone else?
Admittedly here in California we like to periodically pass regulations that drive all the homeowner’s insurance companies out of state, so maybe Florida has similar policies.
They probably said billion. Most reporters have no clue on a million vs. billion dollars.
You have to admit, it’s creative.
I certainly can't blame AllState for taking this approach. The state government uses bullsh!t economics to cap premiums at artifically low levels, so the insurance industry uses bullsh!t science to raise their rates.
never believe an insurance company when they give a statistic to show why they deserve a rate increase. After every disaster, they plead bankruptcy, but still manage to post reoord profits at the end of the year.
This is bogus and a disappointment. Global Warming will have no effect on hurricanes, and that is the science such as it is.
“Is someone forcing people to buy Allstate homeowner’s insurance?”
Nobody is forcing anyone. However it can be extremely difficult to find insurance. IMO, they are trying to drive the price up thinking other companies will follow their lead. A few years ago I had to call about 15 companies before I found a company that would sell me insurance.
In 2005 we had 4 hurricanes in 4 months. It was crazy but most modern homes suffered little damage. Older homes which are not built to modern standards fared worse. Since then we’ve had zero hurricanes but they still want to raise rates. Its BS.
In 2005 we had 4 hurricanes in 4 months. It was crazy but most modern homes suffered little damage. Older homes which are not built to modern standards fared worse. Since then we’ve had zero hurricanes but they still want to raise rates. Its BS.”
You had to call 15 companies to find one that will sell to you, but you’re upset that they want to raise the rates? Did it occur to you that the reason that it was so difficult was because the insurance companies weren’t able to charge you enough to make a profit?
It’s not like the insurance companies refused to sell to you because they hate making money.
Pet rock. DOWN BOY!
The insurance business is competitive, isn’t it? If one insurer charges too much, then do business with another. If they all charge too much, you bought a house in the wrong place.
” You had to call 15 companies to find one that will sell to you, but you’re upset that they want to raise the rates? Did it occur to you that the reason that it was so difficult was because the insurance companies weren’t able to charge you enough to make a profit?”
That was then, its not like that now. I recently called 3 companies and got two quotes.
I object to their using global warming as reasoning to raise rates.
“It’s not like the insurance companies refused to sell to you because they hate making money.”
Back when Andrew went thru there were several companies that went bankrupt rather than pay the claims. Now they limit the number of policies they sell to manage their risk exposure.
But if you like paying high insurance rates you are welcome to call Allstate.
I’m looking at buying a condo in Florida. Insurance rates are ridiculous down there.
“If they all charge too much, you bought a house in the wrong place.”
Go to the beach full of bikini clad beauties, surf and sun then tell me I bought in the wrong place.
Rates must be approved by political agencies, so perhaps we should not be surprised when a company uses politically charged, non-scientific explanations to justify their increases.
I have found that strategy, human foibles and financial risk cycles often have far more to do with rates than they really should.
Even the best data must be interpreted and acted upon by human leaders, who may not want to compete in certain markets at certain times, for whatever reason(s).
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