Documents

Additional Views On The Recommendations Of The Special Commission On Homeowners Insurance
Submitted by:
Representative Eric T. Turkington
Senator Robert A. O'Leary  ...more

Dissenting Opinions
The Special Commission On Homeowners Insurance  ...more

Chatham Board of Selectmen Sign On!

October 30th the Chatham Board of Selectmen voted as a board to sign on to our organization and stated their intent to support the Citizens for Homeowners Insurance Reform. They believe in our mission and now join the Towns of Truro, Provincetown, Wellfleet Eastham,Orleans, Brewster and Harwich to support Citizens for Homeowners Insurance Reform with a formal Selectmen Board Vote.

We will be speaking before other Cape Towns this fall and winter to ask for all communities to help make insurance reform happen. Together we have a stronger voice.

We are pleased to have these towns working with their citizens and taking actions, supporting bills and initiatives that will reduce the high cost of homeowners insurance in Cape Cod and the Islands.
Paula

Protest/Demonstration Great Success!

Our protest/demonstration went fantastic Monday! We had 26 Citizens from the Cape board a bus and into Copley Sq. we traveled. A small number of coastal property owners joined us in Boston and we held our picket signs high from 1pm to 3:15pm. The Property Casualty Insurers Association of America were across the street at the Westin Hotel attending their Annual National Meeting. Many walked by us on this beautiful, sunny afternoon, taking note of the sayings on our signs and taking an occasional photo.

Cape Citizens surrounded by towering buildings, the Boston Public Library, in a historic Boston Sq. exercised their Democratic Right to gather and demonstrate their cry of " Outrageous insurance premiums and coastal discrimination." Rep. Turkington joined us and held a sign high as well. Many citizens stopped and asked of our cause, some had families affected by the rising costs of homeowners insurance in coastal Ma.

A Re-Insurance Broker from Bermuda came out and we held a professional discussion on the reasons for the high cost of re-insurance. We told him of our support of Senator O'Leary's Catastrophic Bill so the need to buy the high priced, unregulated re-insurance can be dropped and a savings can be enjoyed by the people!

I give him credit to have joined us and thank him even though we did not always see things the same way.

The Citizens felt empowered with their participation in this protest, for many, myself included our first! But not our last! We accomplished what we had come out to do: Get the attention of the Insurance Industry and to let them know Coastal MA citizens are not going to sit back and take the unfair practices of the insurance industry.

We had great press with interviews from 2 Boston Public Radio Stations, a live radio update to our own Cape Station WQRC en route and Sarah Shemkus from the Cape Cod Times traveled on the bus and covered the event.

The Citizens for Homeowners Insurance Reform supports the Attorney Generals recent recommendation of a Fair Plan Rate Reduction of 29% for the Cape and Islands and will begin writing several Bills and directives for the Commissioner of Insurance for the purpose of reducing the homeowners Insurance Reates for Coastal Ma citizens.

Thanks Paula Aschettino
Chair

The Special Commission studying homeowners insurance rates in the Massachusetts Coastal area convened on September 7th at Cape Cod Community College in Barnstable.

Click here to read the report.

Alan's letter to Rep. Mariano and Sen. Buoniconti
Gentlemen:
I hope that your staffers will see the import of bringing this to your attention. It is an adjunct to the hearing that you held at the CC Community College today. You were gracious to come to the Cape to be subjected to our vitriol, but Gentlemen, we charged you with a responsibility and we're all watching to see what you do in response to our pain ...more

WHAT ISN'T COVERED BY YOUR HOMEOWNERS INSURANCE?

NAIC Survey Shows Lack of Awareness Among Consumers When it Comes to Their Homeowners Policies

Please click here for the full report.

FAIR PLAN CALLS FOR 25% RATE HIKE

Report on the Public Hearing before the Commissioner of Insurance - April 27, 2007

Please click here for the full report.

STATE INSURANCE REGULATORS FAIL TO PROTECT CONSUMERS FROM EXCESSIVE PROPERTY INSURANCE RATES BASED ON DISCREDITED HURRICANE PROJECTIONS

For the second time in a year, national consumer groups called on state insurance regulators and the National Association of Insurance Commissioners (NAIC) to reject severely flawed hurricane projections used by insurers to sharply increase rates on property insurance policies in states along the Atlantic and Gulf coast.

Click here to read the entire article.

Property/Casualty Insurance in 2007:
Overpriced Insurance, Underpaid Claims, Declining Losses and Unjustified Profits

by Robert Hunter Director of Insurance Consumer Federation of America

"In 2004, the Property/Casualty Insurance industry set an industry record by netting an after tax profit of $40.5 billion. In 2005,even considering Hurricane Katrina and other major hurricanes, the industry posted a profit of $ 48.8 billion--a new record. In 2006, with no major hurricane activity coupled with premium increases, the industry set yet another profit record, estimated to be $ 68.1 billion. To put this into perspective the $157.4 billion in profit over the last three years equates to roughly $524 for every American, or $1,574 per household."

Click here to read the entire article.

Ethicist Questions Insurance Rate Data
BY KEVIN BEGOS and MICHAEL FECHTER
The Tampa Tribune
Published: Jan 12, 2007

A new computer model that has contributed to large spikes in property insurance rates in coastal areas should have had full review by outside experts before it was released, the ethics chief of the world's largest general scientific society said.

Research Management Solutions of Newark, Calif., introduced the product to the market long before the scientific peer review process was finished.

"It's ridiculous from a scientific point of view. It just doesn't wash well in the context of the way science is conducted," said Mark S. Frankel, director of the Scientific Freedom, Responsibility & Law Program at the American Association for the Advancement of Science, in Washington.

Click here to read the entire article.

Report On The Current State Of The Homeowners Insurance Market In The Commonwealth
Julianne M. Bowler
Commissioner of Insurance
November 29, 2006

Cape Cod and Hurricanes

Because of the perceived increase in coastal hurricane risk, the Cape Cod and Islands area (composed of Barnstable, Dukes and Nantucket Counties) has needed to face a market with more expensive and reduced options for homeowners coverage. With the wealth of statistical experience that was derived from damage associated with Hurricane Andrew that struck south Florida in the early 1990s, experts have developed better and more sophisticated hurricane models that predict the probable maximum loss that would occur in the event of a catastrophic hurricane striking land. With the availability of more accurate topographic information and experience from recent hurricanes in Florida in 2005, the models are predicting greater potential losses across the eastern seaboard. The Cape Cod and Islands area is situated in a vulnerable position geographically. Although most hurricanes strike in the Caribbean and Southeastern United States, if a hurricane does proceed beyond Cape Hatteras in North Carolina, and strikes land, based on historical records, it is much more likely to strike New England than the Mid-Atlantic States. There is also the likelihood that if it strikes the Cape Cod and Islands area the storm will stall off coast, as do many winter Northeasters, prolonging the incident and causing more catastrophic damage. In addition, the development of expensive homes along the shore in the Cape Cod and Islands area, the presence of many trees in that area rooted in relatively sandy soil, and the difficulty in transporting materials to repair damaged property, has produced a situation in which possible losses in the Cape Cod and Islands area could be tremendous in the instance of a category 4 or 5 hurricane.

Despite the possibility of enormous losses, many residents are unaware of the real risk of such a storm. While forecasters predict that locales such as Florida should prepare for a category 4 or 5 storm at least once per decade, they predict, based on historical patterns, that Massachusetts may see such a storm only once per century. While many seniors recall the fury of the Hurricane of 1938 and the destruction in eastern New England, it is a faded memory for most New Englanders. Many cities and towns have therefore not taken the precautions that could reduce their exposure to the so-called “storm of the century”. It is in this environment, in spite of recent newsworthy losses in New Orleans and Port Arthur, Louisiana from Hurricanes Katrina and Rita, that many residents of the Cape Cod and Islands area are unaware of the potential risk of hurricane damage.

Although policyholders may not fully understand their exposure, homeowners insurance companies have been forced to recognize these risks, because the advent of the new hurricane models have predicted substantially greater potential costs in the Cape Cod and the Island areas than formerly contemplated. In order to reduce their potential exposures, these homeowners insurance companies need to purchase reinsurance from private reinsurers. They have found that they need to buy more and more expensive reinsurance in order to maintain their financial strength ratings. Insurance companies can either pass their increased costs along to their policyholders or decide to reduce the number of covered exposures.

As noted above, the following companies notified the Division of Insurance during 2005 that they would nonrenew Cape Cod homeowners policies citing their concerns about increased hurricane exposure in coastal areas:

2005
Patrons Mutual 1,400
Preferred Mutual 600
Vermont Mutual 5,000
Hingham Mutual 8,000
Quincy Mutual 7,000
National Grange (NGM) 2,000

There are no state laws that require homeowners insurance carriers to offer coverage in any area or to continue to cover properties following a renewal date. Instead companies are only required to provide 45 day advance notification to policyholders so that they may secure other coverage either through the voluntary market or the FAIR Plan. As a short-term solution, most of the nonrenewed policyholders found replacement coverage from the Massachusetts Property Insurance Underwriting Association, also known as the MPIUA or the FAIR Plan.

In Massachusetts, the FAIR Plan is considered the insurer of last resort, since it will cover most properties that are not picked up by other homeowners insurance carriers. Coverage available through the FAIR plan is, generally, identical to what is available in the voluntary market, and the rates charged by the FAIR Plan have been statutorily constrained. The result of this has been that the Plan is competitive with the voluntary market. Within the past year, mostly due to the policy nonrenewals along with its competitive coverage and rates, the FAIR Plan has doubled its Cape Cod and Islands exposures. Although this increase in FAIR Plan writings would seem not to affect policyholders, it does concern homeowners insurance companies that make up the Association. If the FAIR Plan has a fiscal year underwriting loss, all other homeowners carriers will be assessed for the FAIR Plan losses; any such assessments would be ultimately passed along to insureds in the form of rate increases.

Click here to read the entire article.