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Agency celebrated 80th anniversary with 8,000 Katrina claims

The Treutel Insurance Agency in Bay St. Louis was looking forward to a celebration of its 80th year in business when Hurricane Katrina struck.

“We had about 10,000 policy holders, and of those 10,000, 8,000 had claims,” says Dave Treutel Jr., president and owner of Treutel Insurance. “My dad, my wife and a great staff of only four after the storm handled those 8,000 claims and paid out over $250 million in losses to our insureds. We didn’t have problems with the companies we represent paying claims. The companies basically paid. We were fortunate that a large percentage of our people carried flood insurance because we pushed it.”

The Treutels lost their house and the office due to Katrina, so they put up a tent in front of the Chamber of Commerce, and met with hundreds of claimants every day. They stayed in that tent for approximately three weeks until the outer bands of Hurricane Rita blew down the tent. After that, they leased a commercial trailer until they moved into a temporary office across from the library.

Their work handling the huge number of claims was even more significant considering they had clients who had evacuated out to 40 different states. And Treutel and his wife, Angelyn, were doing a very long commute each day because the closest apartment with electricity they could find to rent was in Daphne, Ala. Because of the damage to the Interstate 10 bridge in Pascagoula, it was a three- to four-hour commute one way. They made the long trek calling in claims on cell phones and laptops until January when they were able to find a small home to rent in Bay St. Louis. In August 2006, the couple moved into a FEMA trailer at the site of their former home.

Despite a work load that was even higher than the claims seen in Katrina, Treutel has found time to volunteer on a number of critical Katrina recovery boards. Treutel, who had been on the board of the Mississippi Windstorm Underwriting Association (Wind Pool) for approximately 12 years when Katrina hit, was reappointed by Gov. Haley Barbour and is currently vice chairman of the board for the state-sponsored insurance of last resort for people who are unable to purchase wind insurance from private carriers. He was named to the Governor’s Commission on Recovery, Rebuilding and Renewal in Hancock County, and was a founding board member of the Gulf Coast Business Council. And he served as president of the philanthropic group, the Gulf Coast Community Foundation, for 18 months.

“One of the thrills of my post-Katrina experience was being able to give away over $7 million as head of the Foundation to charitable organizations to help the needy along the Coast,” he says.

Treutel has testified in front of the U.S. Congress on insurance issues, met with President Bush in Biloxi last March and has traveled far and wide across the country to talk about the Katrina experience and what needs to be done to improve insurance markets in the country. He has been quoted in The New York Times, The Washington Post, Kiplinger’s Personal Finance Magazine and Money Magazine, and was in an hour-long CNN documentary.

“I wish it to never happen again, but I’ll say the last two years have been anything but boring,” says Treutel, who just recently moved back into his renovated home in Bay St. Louis. “The past two years have given us a wonderful opportunity to give back. Angelyn and I have spoken about our experiences in Atlanta, Long Island, Seattle, Spokane, Las Vegas, Dallas, Miami, Orlando, Nashville, St. Louis, Amelia Island, the big island of Hawaii and twice in New York City. We took the opportunity to leave the FEMA trailer any chance we could. I spoke at the International Hurricane Conference, to state and national legislators, trade groups, to insurance companies and to independent insurance agents in different states to tell them what happened and what can be done before it happens again. It has been a long but interesting two-year camping trip for us.”

Treutel, who is also a past-president of the Independent Insurance Agents (IIA) of Mississippi, says his office had a lot of help handling the flood of claims from the IIA of Mississippi, Florida and of America. Representatives and fellow agents of those groups as well as others came to help the Treutels and their insureds after the storm.

Favors independence

As one might expect, Treutel is a fan of independent insurance agents and is one of their Trusted Choice agents.

“I represent and can place insurance with 65 insurance companies,” he says. “Would you rather go to an agent who represents one company or one who can represent 65? When everything is going great and there are no problems, the appeal of dealing with only one company is attractive to me. When the market is tight, I like the ability to be diversified and go to different markets. My clients win. No one company is perfect and most competitive in every situation. So the ability to go to different markets is, in my mind’s eye, a big plus. There are some very good direct companies, and some very good independent agent companies.”

Recently Speaker of the House Nancy Pelosi participated in a House congressional delegation town hall meeting on insurance issues held in Bay St. Louis. Treutel spoke at the meeting, as he had done for a similar meeting a year previously.

Treutel has been working to support Rep. Gene Taylor’s current bill, HR 3121, the Flood Modernization Act of 2007, which adds wind coverage to the federal flood program.

Treutel would have preferred legislation earlier proposed by Taylor, who has been dubbed “Mr. Insurance” by Speaker Pelosi, for all-perils homeowner’s insurance. Consumers would have only one policy that would cover all perils. An independent adjuster would investigate the claim, and it wouldn’t matter what caused the damage-water, wind or fire. But there proved to be too many obstacles in Congress to an all perils policy, so Taylor has instead promoted adding wind to the federal flood policy.

“Companies would be able to pass on federal wind and flood rates to policy holders, but they would have one policy and agent much like the Terrorism Reinsurance Act (TRA),” Treutel says. “Instead of each state buying reinsurance themselves, it could be purchased on a national basis to offset the tremendous cost of each state’s Wind Pool purchasing on its own.”

Anticipating improvement

One of the biggest concerns about the Coast recovery is the current high price of insurance. Most companies aren’t writing wind insurance or, if they are, the rates can be higher than with the state Wind Pool. Treutel thinks the situation will improve.

“We were hit with the worst natural disaster ever to hit in the U.S.,” he said. “One of the things to be expected right after such a disaster is some of highest insurance rates we have ever seen before. The thing I mention to my people is I don’t think you will be paying these high rates for the next 20 years. Over the past 20 years, we have seen rates go up and down, and a lot has to do with competition and attracting good companies to write on the Gulf Coast.

“The Wind Pool is working to encourage more companies to come and write even if they write less percentage of the market. Less than a dozen companies were writing over 90% of the homeowner’s market before Katrina. We would like to attract and encourage more companies to come back and write coverage. If we have 50 companies each writing 2% of market, we will be much better off. It will increase competition, reduce exposure and drive down rates. It could even put us out of a job at the Wind Pool. That would be great if we are no longer needed.”

Small market

Treutel adds that is it important to keep in mind Mississippi represents only .6% of the insurance market in the U.S. The Mississippi Department of Insurance can’t mandate companies do business in the state. But legislation recently passed unanimously by the Legislature and signed by the governor March 22, House Bill 1500, has given the Wind Pool board the ability to attract new companies and encourage existing companies to write insurance throughout the state.

“This bill set up a model blueprint for a state Wind Pool with more tools, incentives and flexibility than the old law had,” Treutel says. “One thing it does is encourage people to build back better, stronger and safer than before. We must do that if we are going to continue to live in coastal areas. Under the new Wind Pool rules, if you build to a standard better than the current International Building Code, you can get a lot better rate because you are a much lower risk.”

Contact MBJ contributing writer Becky Gillette at bgillette@bellsouth.net.


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