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Insurance issues on the Coast on the agenda for recent hearing

Coast residents were on hand to tell their insurance stories to the House of Representatives Insurance Committee at a hearing in Biloxi September 30. The hearing was called by chairman Walter Robinson Jr. to discuss housing and insurance issues in the wake of Hurricanes Katrina, Gustav and Ike.

Robinson said his phone rang frequently with requests to speak to the committee. A lineup of residents asked that their concerns be addressed in the 2009 legislative session. Requests included: changing state law to allow public adjustors to work in the state following disasters; joining a coalition of other coastal states to bring down insurance rates; passage of a law requiring engineers to stand behind their reports regarding causes of damages; enactment of a confidentiality clause for insurance companies; and, passage of a homeowners’ bill of rights with 40 provisions such as the bill Texas has instead of the 14 provisions in Mississippi’s proposed law.

The high cost of coverage in the coastal area was decried by numerous speakers. Examples were given of homebuyers qualifying for mortgages and having sales fall through when the cost of insurance was added to the monthly payment.

Chairman Robinson turned the hearing over to State Insurance Commissioner Mike Chaney, who reminded the crowd of the small percentage of the national insurance market that Mississippi constitutes. He noted that 50% of the country’s population lives within 50 miles of a coastline.

“That is why we are working with southeastern states to form a coalition,” he said, “but we are running into statute differences that need to be streamlined and coordinated.”

He also said that 40 new companies have signed up to write insurance in the state this year, although not all of them are doing so on the Coast. The commissioner got a round of applause when he said, “I’m not happy with insurance companies, either.”

He received another round of applause — something he admitted is rare — when he briefly outlined a mitigation program the Mississippi Insurance Department is working to implement.

“We are talking to people in Florida where they have this mitigation program that awards grants to homeowners to retro-fit their homes to strengthen them against storm damage,” Chaney said. “There’s already a program to build new homes with stronger guidelines, but this one will be for existing homes, something that will entitle them to lower insurance rates. The grant comes from FEMA and has no cost to homeowners. Hopefully, this program will be ready to kick off the first of the year.”

Paul Bradford of Woolmarket stressed the importance of such a program. “I live seven miles north of Interstate 10. After the storm, I spent a lot of money to harden my home only to be told I didn’t qualify for a rate reduction because it’s not new construction,” he said. “The company put me in the Wind Pool.”

The costly state-run Wind Pool now has 41,000 policies, compared to 16,000 at the time Katrina hit the Coast. It fills a void, covering coastal residents against wind when that coverage is excluded by private companies.

Representatives of the state’s largest insurance carriers spoke to the group. Steve Simpkins, regional counsel for State Farm, said, “It may not seem like it, but my primary job in Mississippi is to listen and try to help solve problems.”

He said State Farm has been in the state since 1928 and represents 300,000 households. In 90 days following Hurricane Katrina, the company received 650,000 claims across the hurricane-stricken states.

“Katrina was an unusual and complicated event,” he added. “We made mistakes in the aftermath, and some resulted in disputes. We agree with many things in the Policyholders’ Bill of Rights.”

Laurie Brouse, regional counsel for Allstate Insurance Company, said, ”We believe in your state and the recovery. Your best bet is to have more companies and competition. You also have healthy independents here.”

Contact MBJ contributing writer Lynn Lofton at llofton656@aol.com.

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