Jittery Insurers Back Out of Hurricane Insurance Coverage, Consumers Suffer
Homeowners across the country and especially in the Gulf Coast region can look forward to a long and tough hurricane season. The reason? Homeowners are finding it harder to hold on to their hurricane insurance policies.
Insurers across the U.S. are raising premiums and dropping coverage to limit their exposure to risks. As a result, homeowners are finding that insurance is not only more expensive, but also more difficult to get. According to the Insurance Information Institute, homeowner policy premiums have risen by 3 percent across the country. The increase is even greater in the Gulf Coast region where the impact of hurricanes tends to be maximized.
- Last year, state Farm Insurance Company and AllState Corp raised premiums in Texas, blaming a high number of hurricane insurance claims as the result of Gustav and Ike, for the increase.
- llinois-based AllState has also raised deductibles and stopped offering coverage in some coastal areas.
- State Farm Florida could soon pull out of the Florida market because it was denied its request for a 47 percent rate increase.
- According to the Insurance Information Institute, insurers have seen record losses in Texas, Louisiana, Mississippi, and Florida over the past five years. In these areas, premiums have risen sharply.
The National Oceanic and Atmospheric Administration has forecast between 9 and 15 named storms in 2009, including between 4 and 7 hurricanes. Of these hurricanes, between 1 and 3 will likely be major. However, forecasters are also predicting fewer hurricanes than last year. That should be good news for homeowners in hurricane-prone areas.
Insurers Backing out of Hurricane Coverage
Insurers are blaming devastating financial losses from powerful hurricanes over the past five years, as well as the current turmoil in the financial markets, for impacting their earnings. Companies use financial investments as an additional source of income to fall back on when they have huge claims to pay out. Most of the major insurers have reported huge losses due to a decline investment income.
For worried homeowners it does not really matter why an insurer would back out of an agreement. With insurers getting antsy about paying claims, and large numbers of Ike lawsuits still pending in the courts, we can expect more people to need insurance attorneys once November comes and the season ends.
When the Bablitches approached AllState to claim their policy benefits, they were denied their claims. The lawsuit alleges the company breached the contract in refusing to pay out the claim and is acting in bad faith. The company denies those charges and says it is acting reasonably in the claim.
For a policyholder, it may not be immediately obvious that he is being overcharged by the insurer. When an insurer's desire for profit at any cost causes a situation where a customer is charged and ends up paying more than is lawful, it is necessary he consult with an 
That is only one of the many cases. Across southeast Texas, victims whose homes were damaged when Ike hit were forced to hire insurance attorneys to recover the claims they are rightfully entitled to. The 
Companies and contractors in Iraq and Afghanistan war zones must provide employers medical disability insurance to workers, including death benefit policies in case of fatalities. Back when the Defense Base Act was passed in 1941 to provide compensation to civilians working at military, air, and naval bases, there were very few civilian contractors and, therefore, fewer claims. All that changed after the Afghanistan and Iraq invasions. In 2008, more than 200,000 civilian contractors worked in the war zones, guarding bases doing translation work for soldiers, driving trucks, cooking, delivering fuel to troops, and performing dozens of indispensable tasks.
One civilian who lost his leg when a roadside bomb exploded, returned home expecting to find easy and quick medical help. Instead, he found the process of gaining compensation would be much harder then he thought. According to truck driver John Woodson, AIG began to challenge the expense of almost every single medical requirement he needed. While military amputees are typically provided three prosthetic legs to enable walking, showering, and exercising, Woodson had to fight to get a single prosthetic - the prosthetic is not brand new as his doctor recommended and many of the original parts have been replaced..gif)
Meanwhile, 
At the time of the accident, he was traveling at 100 mph. An earlier jury ruled in the favor of the family, but the verdict was overturned by a judge and an appeals court.
Some of State Farm's arguments against the state’s conditions are almost laughable. For instance, the company does not want its agents to directly sell policies for other insurers because that would dilute its reputation as a “reliable company”. With 1.2 million policy holders in Florida who now have to look for other insurers, State Farms "reliable" reputation is in tatters regardless.