I have to rant cause this is too damn interesting to let slide....

[The Straight Story]

Allstate Floridian Seeking Homeowner Rate Hike

POSTED: 11:02 pm EDT August 30, 2006

TALLAHASSEE, Fla. -- Allstate Floridian, the state's third-largest home insurer, asked state officials Wednesday for permission to raise premiums for some of its homeowner and condominium policies.

The rate hikes -- up to 24 percent for Allstate Floridian customers and 33 percent for Allstate Floridian Indemnity customers -- are needed to offset higher reinsurance costs, company spokesman Ryan Priest told the South Florida Sun-Sentinel.

Reinsurance is insurance coverage for insurance companies, to help pay claims after a catastrophe.

"The majority of the rate request that we have asked for is attributable to the cost of reinsurance that we have to purchase so we can adequately protect our policyholders," Priest told the newspaper for its Thursday editions. "That's really the driving factor."

If approved, the rate increase could occur starting Dec. 3.

In February, the state Office of Insurance Regulation allowed Allstate to go ahead with a rate increase that left some homeowners dealing with premium hikes of up to 50 percent. Allstate said that increase was also designed to protect its ability to pay future claims after two terrible hurricane seasons.

http://www.local6.com/news/9766497/detail.html

So let me see if I get this straight:
The Company that the insurer uses for reinsurance is raising their rates.

Insurance company will make less money, so they raise your rates.

Family/person will make less money because they pay out more now. They have no ones rate to raise.

So maybe that insurance company should get a second source of income, turn their lights off more, conserve more paper, trim the budget while not booting out any of it's employees (like we would not boot out a family member to cut costs) and learn to survive with less.

Hell, that is what they want YOU to do.

Yeah, I get the whole business idea is to make profit and stay in business, help the consumer by writing them policies, etc and so on. I just think that allstate could probably cut their costs in other ways but are too damn lazy to do it, so they make you do it.

They get you coming and going. Everybody up the food chain from you wants more of your money, and when we ask for more of theirs via livable wages, more taxes on big business, etc, we are told just to work harder and you can be a success.

It's a fucking two way street. Hey allstate - open a hot dog stand and bring in more money. Go dumpster diving. Cut bonuses and pay of senior members, if they want to live better they can work two jobs or cut their own costs in their mansions.

[skids]

1. Good rant...

I would play devil's advocate and say that if they need to increase premiums by 25% then that would mean they have a problem that would be impossible to address by trimming the fat.

However, I won't, because I know that huge insurance companies are full of so much deadwood that I really don't find it too hard to believe they aren't wasting that and a whole lot more.

Nor would I trust them that the premium increase really represents just a pass-on of costs to the customer. No doubt there's some padding going on there.

[The Straight Story]

2. Indeed, note they said 'driving factor' and not only factor :)

I ain't got anything against companies trying to increase their bottom line and make more profit, but they should share it with their workers as well across the board in form of livable wages (as but one item).

[kdmorris]

3. What I want to know

is why the actual percentage of profit for them is what is going up, not the re-insurance costs? This "reinsurance cost" is utter bullshit! Our fucking Governor and Republican state congress are doing everything they can to shift money from us to the rich CEO's of the Insurance companies. ( http://www.latimes.com/news/nationworld/nation/la-na-insure5apr05,0,3061059.story?coll=la-home-headlines
http://www.insurancejournal.com/news/national/2006/08/22/71632.htm )

We bought our house in 2001 and our homeowners insurance was $981. Each year, it went up a little until it was $1120 in 2004. After Charley, Frances, Ivan and Jeanne hit Florida, our rates DOUBLED, as did the 2% deductible that you have to pay when your house is damaged by a hurricane (if we had been hit in 2001, our deductible would have been $1,300, up to $3100 after Wilma). Now, we are going to have our insurance raised AGAIN, more than the 50% they keep talking about.

This has obviously raised our mortgage from about $1000 to $1200. And I'm sure they are going to use Ernesto as another excuse to raise our rates.

Sorry, I shouldn't even get started. This "poor me" attitude by the insurance companies is PISSING me off! It's just like the gas companies all whining about how they need to raise the gas rates because they have to pay for their oil, which is going up so much. THIS is what happens when you have a governor and state congress that passes laws that ONLY benefit Insurance companies.

[Sherman A1]

4. Well Said

I suspect that insurance companies are awash in cash and I consider them pure evil. Necessary to be sure, but pure evil no less. They can trim costs to reduce the amount of increase they need. CEOs bonuses can be a bit less, they can find ways to use less energy and still be responsive to the needs of their customers. They can do it, they just choose the easier option of "raise the rates".

[flordehinojos]

5. the BUSHES ... which include JEB BUTTSTINKY BUSH want to think

all the rich CEOs who pour money into their coffers just so that the BUSHES can reward them with the sweat of our brow and the coins out of our pockets.

[GeorgeGist]

6. Allstate's Profit Rises 26%

The Allstate Corporation said Tuesday that profit rose 26 percent in the first quarter as the company collected more insurance premiums and paid out less in damages for insured homes and automobiles.

Net income was $1.42 billion, or $2.19 a share, compared with $1.12 billion, or $1.64 a share, in the quarter a year ago. Consolidated revenue was $9.08 billion, an increase of 4 percent from $8.71 billion a year earlier.

Analysts polled by Thomson Financial forecast earnings of $1.66 a share on $8.51 billion of revenue.

The report was released after the markets closed. Shares of Allstate rose $1.53, or 3 percent, to end regular trading at $51.95. In after-hours trading, the shares gained 74 cent
http://query.nytimes.com/gst/fullpage.html?res=9E0CE7DF143FF93AA25757C0A9609C8B63

[Cobalt-60]

7. If they raise the price enough

It will become cheaper to build the homes in such a way that they aren't vulnerable to the calamities against which they're insured.
Steel Reinforced concrete is a winner. If you must you can put an old fashioned Tudor shell on the outside, but its just something else to replace next hurricane season.
It doesn't burn, either.

[kdmorris]

9. My house is Steel reinforced concrete block

in a 500 year flood zone. The only wood in the house if paneling and door framing. It was built by someone from Jamaica, who KNOWS how to build a house to withstand hurricanes. You seem to be saying that it's fine for my insurance company to raise my rates so that I will be forced to build a home like the one I already have that they are raising the rates on.

They don't CARE how the house is built. They CARE about one thing: Profit. It's NOT about them losing money. It's about how much profit they can get away with.

[MadHound]

8. Don't get me wrong,

I think that these rate hikes are bogus, especially in light of the fact that insurance companies make most of their money off of investments, not premiums paid in.

However if rates have to be hiked due to hurricanes, I find it only fair that that those who choose to live in hurricane hotspots are the ones who do the paying, not the rest of us who live in other parts of the country far from hurricanes. Back in '03 when I bought my house, I was damn near unable to get insurance at all, even though I had a clean record on my previous house. The reason why? Because insurance companies weren't issuing policies due to the amount of damage incurred during the '02 and '03 hurricane season. Allstate, State Farm, all the national chains were turning me down, with a clean record, an excellent credit report etc. I damn near wasn't able to close due to lack of insurance. Finally on the day of closing, two hours before close, I was able to find coverage through a regional insurance company.

Meanwhile, the insurance on the house I was selling went through the roof. This was insured through State Farm, and the reason they cited for the rate hike? Payouts they had to make to coastal area policy owners who had been hit by hurricanes during '02 and '03. I was paying for hurricane damage even though I was a thousand or more miles removed from any threat of a hurricane. Sorry, but that's not right. I live in tornado country, and I have no qualms about paying extra for tornado coverage. I realize why I pay more, I live in an area with a high number of tornadoes. But I find it wrong that I have to subsidize somebody else's coverage simply due to the fact that they made a choice to live in hurricane alley. If you want to live on the coasts, recognize that you're living in a high risk area and are going to have to pay for that risk, don't expect me to subsidize your choice to live on the coasts. I don't expect you to subsidize my choice to live in tornadoe alley, and after talking with my insurance agent, I found out that you actually don't. But since damage from hurricanes routinely ranks in the billions of dollars, as opposed to the hundreds of thousands or low millions from tornadoes, if I insure through a national insurance company, who generally can cut a better deal, I'm expected to subsidize the lifestyle choice of coastal residents. Sorry, but I find that to be wrong. Especially since it damn near cost me a house.

That being said, I think the insurance companies are a racket in general. Like I said earlier, their largest revenue stream doesn't come from premiums paid in, but from investments made with those premium payments. And sadly, when the market wipes out those investments, as in '00 and '01, most insurance companies recoup that money through higher premiums. In addition, they narrowly define their coverage, to the point it is criminal, witness the companies dissection of damage acrued from Katrina, flood damage(not covered) as opposed to wind damage(covered). They are poorly regulated and have a completely legal, in fact a mandatory racket. They need to be reigned in on both the federal and state level.

However if you live in a high risk area, recognize the choice you're making and expect that you are going to have to pay extra for that choice. If you don't want to pay that extra premium, move somewhere that the risk, and premiums, aren't so high. It's that simple.