Posted on 02/15/2007 7:49:22 AM PST by governsleastgovernsbest
File this one under "MSM condemns ee-vil corporations." As you'll note from the screencap, ABC's Good Morning America today branded State Farm Insurance "not a good neighbor." What is State Farm's sin? Its decision not to write new homeowners and commercial policies in the state of Mississippi.
Did you note that? State Farm has decided not to write any new policies. This in no way affects the insurer's liability for existing policies. State Farm has made a simple business decision: given the legal environment there, Mississippi is not a good place for an insurer like it do to business.
As per this Forbes article:
"Mike Fernandez, vice president of public affairs for State Farm, said Mississippi's 'current legal and political environment is simply untenable. We're just not in a position to accept any additional risk in this homeowners' market.'"
That didn't stop Diane Sawyer from introducing a segment on the news by speaking of "outrage" over insurance companies and declaring that "some" call State Farm's decision "heartless and others call it plain greedy."
Chris Cuomo narrated the segment. Although a brief clip was played of State Farm spokesman Fernandez, most of the segment was taken up by the sympathetic story of one couple that had to wait a year-and-a-half to get its check, and clips of the Mississipi AG accusing State Farm of greed and a consumer advocate claiming State Farm is saying "if you make us pay what we owe we're going to take it out on your citizens."
Closing the segment, Cuomo stated "you know the saying 'like a good neighbor State Farm is there'?, well those Gulf Coast residents say when they need help the most, that good neighbor is moving out." From his body language and tone there was little doubt Cuomo was seconding the emotion. And again, ABC's screencap left no doubt. It didn't ask whether State Farm was being a good neighbor." It boldly proclaimed that it was not.Cuomo misleads when he says the company is leaving when people need help the most. Remember: State Farm's decision has nothing to do with existing policies or claims. It remains fully liable on all of those. It simply does not want to do any new business in Mississippi. If the legal climate in the state gives insurers a fair shake, then surely State Farm's depature creates a huge business opportunity for other companies, who will rush in to fill State Farm's vacuum. If they don't, it's fair to conclude that there is no level legal playing field for insurers. Rather than blaming the free enterprise system, ABC should examine the broken legal system in Mississippi, notoriously dominated by trial lawyer interests.
Back in the studio Diane declared a "call to arms" in which all of the regular GMA cast members will be "taking on the issue of the insurance industry, taking your case to them and getting answers."
ABC: not just in the news business anymore -- going to war against corporate America!
Contact Mark at mark@gunhill.net
"Hey MS: build a good business climate and companies will beat a path to your door!"
We do and they are, so to speak.
Instead of State Farm getting out, consumers would be getting out.
I heard Trent Lott describe what happened in Mississippi as a result of Katrina. The insured folks, in large numbers, had hurricane insurance, but not flood insurance. (I gather flood insurance is a rarity for coastal homeowners) So....the insurance companies, in large numbers, determined the houses were destroyed by flood, and they weren't liable.
http://www.washingtonpost.com/wp-dyn/content/article/2005/09/20/AR2005092001414.html
http://news.findlaw.com/andrews/m/icr/20060126/20060126lott.html
I don't see what the big deal is with State Farm wanting out of Mississippi. Is there some law in place that once you've set up business you are not allowed to move? This is just silly! As long as they honor the current policies, I don't see what the big deal is.
As for not getting money to people fast enough after Katrina, isn't that happening with all money involved in this hurricane? It has been nothing but accusations from the first wind blowing. I can understand why they want to examine each case carefully.
I'm sure there's not a single person out there trying to commit insurance fraud!!/sarc
I might add that ABC news is not a good neighbor the lying sacks of you know what.
State Farm has been ordered by Texas state commission to reduce its home owner premiums since 2003 (I think), they are refusing. Rates nearly doubled over a span of a year or two, now about $1350/yr on a $120K house.
In my case they have been very good at settling any claims both home and auto.
A lot of the battle on the Gulf Coast is whether it was wind (covered) or storm surge (not covered) which caused the claimed damage.
What State Farm is really saying...very quietly...is that the income they make off these home policies in the state are not enough to stand up to the risk. And here...we aren't talking about damage risk...but court risk. Once you start going into courts in Alabama or Mississippi...the big guys lose. This has been shown over and over for 10 years now.
My guess is that Alabam is watching very closely and waiting for the 2007 storm season. One good hurricane reaching Alabama shores...will get the state AG out of his office and visiting folks. If state farm has to pull out of another state...their profit margin will be interesting to watch.
Long-term damage for those who haven't figured it out along the coast....is that most insurance companie over the next 20 years will slide out of coastal states...and leave only major players who demand triple of what you pay today. You wanted that home within 3 miles of the beach...fine...you will pay a substantial amount of money to keep it. Property values by 2020 will start to fall...and it'll be hard to sell a property thats right on the beach.
Happy State Farm Customer for 13 years here.
Their auto insurance is half what the competitors want to charge and they've paid out the one claim I did have (it was auto not homeowners.)
"Happy State Farm Customer for 13 years here."
Thanks for your input...I guess I had them confused with All State.
My first auto insurance was with little known GEICO in 1965. I had them till 2005, when I left the USA.
One comment by State Farm I didn't see in your report was that while they would continue to honor existing agreements, no decision had been made about renewals.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
Check your car insurance policy. You might well find the medical payment portion is very low, often $5000 or so per individual.
It is written based on people having medical insurance already, so it will cover the deductables and co-pays.
If you don't have medical insurance, you need to either get a different policy that covers accident medical care, or you can do what these people apparently did.
See, if you SUE a person who causes an accident, or the insurance company as proxy for the person, the result if you win is a "liability" claim, not a "medical claim", and can be paid out of the liability coverage, which is often much higher.
You're thinking Allstate, who was forbidden by some states a few years ago to sell insurance because of their crookedness.
True, but if they are not contractually obliged to renew then I would place that decision in the same basket as a decision to leave the state -- it's entirely up to them. No different than if you sign a lease with a renewal option and choose not to exercise it and move away.
Funny how all large, multinational corporations with concentrated powers are evil...except for the large, concentrated, multinational, media corporations that these reporters work for.
AllState is Sears and Roebuck insurance and it is the pits.
One other thing, State Farm is punishing all of its agents in the state by pulling out. They didn't do anything wrong, if you call following flawed company policy the correct thing to do.
Insurance is a racket, period.
I have been very happy with them for years in CA and TX. Both claims we've made have been paid promptly. JMO
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