Insurance Quotes & Advice

Florida regulators had a well publicized battle with Allstate Insurance last year and for a time ordered the company to stop writing policies in the state until it released subpoenaed documents relating to it’s underwriting practices.  Florida has one of the highest homeowner’s insurance in the nation and it’s regulators have taken a hard line against the insurance industry ever since Governor Charlie Crist took office.

Last year had a busy Atlantic Hurricane season which had two of the top ten costliest storms on record.  The insurance industry has also had to cope with the fallout from the financial crisis which has crippled their normally robust investment income.

State Farm had submitted a 47% rate increase to the Florida Insurance Office which regulators denied.  Two weeks after their request was turned down State Farm announced that it would stop writing homeowner’s insurance in the state.

The move will affect approximately 1.2 million residents, State Farm has submitted a two year withdrawal plan that must be approved by regulators.  The move comes at a bad time for the state as Florida has one of the highest foreclosure rates in the country. 

Two days after State Farm’s decision, Florida regulators ordered a subpoena for detailed information regarding all of the company’s policy holders.  State Farm will continue to write health, auto and life insurance in the state, so it may seek to find some sort of compromise with regulators like Allstate did last year.

The economic downturn has hurt many Americans and with equity markets falling more than 40% off of record highs, for many that translates into a comparable loss in principal in their retirement investments.  Those losses will force many Americans to put off retirement to make up for those losses.

The survey indicates that workers are paying down debt, cutting spending on restaurants and entertainment and planning to work past their planned retirement ages.

The survey completed in December shows that 54 percent of workers will delay retirement by at least a year because the economy has sapped their finances.  Nearly one-fourth said they will need to work more than five years.

The survey shows that as the economy worsened in the last half of 2008, many workers came to the conclusion that they would be forced to work past the traditional retirement age of 67 just to maintain their lifestyle and to keep health insurance.

Another worry is that corporate America has started cutting retirement benefits in an effort to cut costs.  We have already seen a number of companies announce that they are eliminating 401k matching.

Rising unemployment is another growing concern for many Americans, the economy lost an estimated 2.6 million jobs last year and it doesn’t look like the unemployment picture will improve anytime soon.  Those seeking employment may have to settle for a job that pays less than their previous position.

Some may also choose to retire on time and live at a lower lifestyle than what they were accustomed to.  The current recession could last for quite awhile and many Americans have difficult choices ahead.

Insurer’s took a big hit in 2008 as a busy Atlantic hurricane season took it’s toll on an industry already hard hit by the financial crisis.  Property and casualty insurers are expected to spend over $25 billion for insurance related payouts for 2008. 

U.S. property/casualty insurers are expected to pay out $25.2 billion in 2008 property losses, the fourth highest annual total in a decade, according to new data released Tuesday from an industry group.The 37 catastrophes, defined as events with $25 million or more in insured property losses, include hurricanes, severe weather, winter storms and tropical storms, said the Insurance Service Organization’s Property Claim Services Unit (PCS). Hurricanes caused the largest amount of loss, currently estimated at $13.3 billion in insured damage. Severe weather events — damaging winds, large hail, tornadoes, and flooding — caused an estimated $10.5 billion. Winter storms caused $1 billion in losses, and two tropical storms caused $300 million.

With many Americans already struggling with the economy and rising unemployment, higher home insurance premiums are not a welcome sight.  Unfortunately the industry has little choice in the matter, the high payouts and a falling stock market have combined to create a shrinking bottom line.

We’ve already seen industry giant AIG narrowly avoid collapse due to government intervention but they aren’t the only ones who are struggling and many analysts are wondering if the insurance industry will require their own bailout like the banking system.  A number of insurers have already tried to acquire small regional banks in order to become eligible for TARP funds.

Homeowners are increasingly seeking bundling their insurance as many companies offer discounts if property and auto insurance is from the same carrier.  AIG flush with government funds has also tried to slash premiums in order regain market share it lost when many thought it was about to go bankrupt, much to the chagrin of the rest of the industry.

Still with a negative outlook for much of the industry in 2009, homeowners will have likely have to cope with rising premiums for some time.