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Furthermore! – The Brave New Republican World

March 19, 2012


Furthermore! – The Brave New Republican World

We’ve all been listening to stupidity carried to the extreme, some of it looking like plain meanness on the part of Republicans. The never-ending saga “self-reliance” continues.

I’m sure many of us saw Republican comments about FEMA after Irene last year, and more recently: “If they didn’t have insurance, that’s their problem.” Sure, until you live in a place subject to catastrophe (which is most places, realistically speaking) and find out your insurance is worthless.

In Florida, in response to an insurance catastrophe that followed the catastophe of Hurricane Andrew way back when, the state formed a non-profit insurance company, called Citizens, that would insure homeowners at a reasonable cost when they could not get other insurance. They’ve been tweaking Citizens ever since, and now with 1.5 million homeowners enrolled in Citizens, they’ve decided to get rid of it.

Their first step was “depopulation.” Insurance companies could come in and cherry-pick the homes they wanted to insure. In theory the state checked them out before allowing them to assume Citizens’ policies, but not so well, it turns out. Let me share my saga.

I received an unexpected notice that my insurance had already been assumed by another company. I was quite sure the legislature had backed off a law that would allow this to happen without my consent. While waiting for my insurance agent to call me back, I researched the company I had been transferred to.

Demotech gives this company an A rating as “Unsurpassed.” I looked for an A. M. Best rating and could not find one. Nor did the company offer any information on its website about its underwriters, reinsurers or financial position. All it has is a page telling me that they’ll be better than Citizens because they can’t refuse to pay any portion of my loss.

So the next thing I did was check out Demotech. Everything on their site led me to conclude that they were in bed with insurance companies. So I picked a company at random and compared their A.M. Best rating to their Demotech rating. Surprise, surprise, Demotech gave them an A when Best had reduced their rating from a B to a D. Putting those ratings side-by-side, given A.M. Best has a stellar reputation, you can imagine what I concluded.

So I went to the Florida’s Office of Insurance Regulation. There it listed all the companies allowed to help themselves to Citizens’ policies. They were all supposed to have made financial filings, but the company which assumed my policy had not. No financials anywhere on the web. Zip.

I finally reached the conclusion that this insurer, who has no information beyond a “we’re great” web page, must be the spin-off of a larger more established company, also listed as one that can take Citizens policies. That company has a shorter version of the name of my company. Reassuring? No. The company that took my policy is probably a spin-off that will provide shelter to the parent company in case of a major storm. It can probably go belly up without the parent company getting into trouble.

So finally I talked to my agent about this mess. His response was, “You’re better off moving to a private insurer because they’re going to lower the liability on Citizens to $100,000, and what’s more, if you’re in the Citizens pool you can be slapped with a 25% rate increase, if there’s a bad storm. Plus, they’re completely going to stop covering parts of your property.” Really.

Leaving aside for the moment that any insurer is going to raise premiums if we have a bad storm, I was left with a very sick, very angry feeling. Apparently, from talking to my agent, no insurance policy is going to protect me if a storm hits me hard. Apparently these policies aren’t worth the paper they’re written on. But yet I must have one in order to avoid mortgage foreclosure.

It’s all one big money scam. All the rich guys and their companies are in bed with each other, abetted by Republicans in state government, making you and me pay for crap that’s worthless so they all get a cut of our paychecks.

Meantime, we have Republicans running around saying, “If you don’t have insurance, that’s your fault.”

No, if I don’t have insurance it won’t be my fault. It’ll be the fault of the Republicans and the 1%.

  • NCrissieB

    Citizens Insurance has provided good coverage at affordable rates, largely because it’s a not-for-profit insurer. And that’s exactly why Republicans want to end it. One of the core beliefs of conservatism is, as Tucker Carlson once put it, “Anything worth doing is worth doing for a profit.”

    Or, put another way, “Investors should get a cut from any economic activity.”

    As we discussed in our series on the difference between the parties last month, Republicans prefer a ‘banking’ model where you set aside money to prepare for risks and you cannot ‘withdraw’ more than you have ‘deposited.’ Ironically, they advocate that even in the private insurance market. In terms of homeowner’s insurance, if you can’t afford or afford to save for whatever might go wrong … then you shouldn’t live where natural disasters can happen.

    Which is to say … you shouldn’t live anywhere.

    I hope you’re able to sort this out quickly, winterbanyan.

    • Jim W

      Or, put another way, “Investors should get a cut from any economic activity.”

      The investors in Citizens Insurance are the policy holders. That was the premise of Mutual Insurance. That is why the Republicans encouraged Mutuals to convert to stock Companies.

  • addisnana

    What a headache for you winter. Hugs and aspirin being sent your way.

    I imagine there are other homeowners blithely unaware and/or unconcerned about these changes who will only realize they’ve been screwed when a disaster affects them personally. By definition, for profit seems to mean that profits are more important than people. I am not surprised in the least that this is a Republican scheme to channel money to the corporations and leave average people exposed to a level of risk that they cannot possibly save for on their own.

  • winterbanyan

    Thanks for your comments, everyone. Citizens is being sued in a class-action that has been brought by policy-holders. I don’t know where that will go, or even if it has any possibility of succeeding.

    Reputable insurance companies, the big guys, have been steadily bailing in their own way since the state informed them they would not be able to sell auto insurance at all in this state if they didn’t provide homeowner’s insurance. The result was an incredibly steep increase in premiums in homeowner’s insurance. In the course of three years the premiums doubled until homeowners had little choice but to seek other insurance.

    What’s left is a bunch of fly-by-nights, and while their premiums are reasonable (in comparison) right now, I have no doubt they’ll skyrocket once the competition subsides and nobody is legally allowed to switch back to Citizens.