Sen. Bunning Cuts Deal Allowing National Flood Insurance Program Extension
March 3, 2010 – Millions of American families at risk of losing their mandatory flood insurance protection no longer need worry – for another month.
President Barack Obama yesterday signed into law yet another temporary extension of the National Flood Insurance Program, this time extending the federal program through March 28. The National Flood Insurance Program initially expired a year ago, but instead of enacting permanent changes, Congressional leaders several times have chosen to simply temporarily extend the program in its current form while debating national health care reform that would not take effect for several years. The National Flood Insurance Program provides flood insurance protection for homes located in designated flood plains across the country.
The National Flood Insurance Program actually expired Feb. 28 after U.S. Senator Jim Bunning (R-Kentucky) last week used Senate Republicans’ renewed filibuster power to block a $10 billion spending measure providing funding for extensions of the National Flood Insurance Program, a federal health insurance subsidy for unemployed Americans, federal unemployment benefits and federal highway projects funding, among others. Bunning objected to Democrats’ plans to add to the already record-level federal deficit, instead favoring using unallocated federal stimulus funding to fund the programs.
But Senate Democrats yesterday agreed to allow a floor vote on an amendment sponsored by Bunning requiring the $10 billion come from the unallocated portion of the $787 billion federal stimulus bill approved last year. The amendment was defeated, after which the Senate voted to approve the funding measure and sent it to President Barack Obama, who signed it into law last night.
Extending the National Flood Insurance Program until May 31 originally was part of the latest “stimulus” effort but was nixed as part of Senate Democrats’ cost-cutting efforts. Federal officials have extended the debt-riddled program’s deadline several times in lieu of enacting permanent changes. Lawmakers are divided on how to sufficiently fund the program and don’t agree on proposals to add coverage for wind damages to the National Flood Insurance Program.
The National Flood Insurance Program’s expiration would leave more than 5.5 million U.S. homes in flood-prone areas without flood insurance protection. The National Flood Insurance Program covers homes located in high-risk flood areas across the United States and is the insurer-of-last-resort in areas where private insurance companies deem it too risky to provide typical flood insurance protection.
The flood insurance program’s expiration date already was extended several times last year to give members of the U.S. House of Representatives and Senate time to work out differences in the program’s direction. House members are demanding the program be expanded to provide insurance protection against wind damage, according to Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee. The National Flood Insurance Program originally would have expired at 11:59 p.m. on March 6 of last year.
Federal lawmakers have delayed enacting permanent changes to the National flood Insurance Program while debating highly controversial national health care reform measures that would not take effect for several years. Republican Scott Brown’s recent upset win over heavily favored Martha Coakley to fill Massachusetts’ U.S. Senate seat vacated by the late Ted Kennedy’s death gave Senate Republicans enough votes to proceed with filibusters on legislation they oppose.
Senate Inaction Forces Expiration of National Flood Insurance Program
March 1, 2010 – Millions of U.S. households will begin losing their flood insurance coverage today unless federal lawmakers agree on at least another extension of the financially troubled National Flood Insurance Program, which expired today after the Senate failed to extend the program before today’s expiration.
The National Flood Insurance Program was to be extended once again as part of a $10 billion federal spending measure that included extending a federal health insurance benefits subsidy for unemployed Americans as well as funding for federal transportation programs. Citing funding concerns, U.S. Senator Jim Bunning (R-Kentucky) successfully blocked the spending measure, saying he prefers funding come from unallocated federal stimulus funds. But Senate Majority Leader Harry Reid (D-Nevada) nixed the idea of using a portion of funds remaining from the $787 billion federal “stimulus” package approved last year.
Extending the National Flood Insurance Program until May 31 originally was part of the latest “stimulus” effort but was nixed as part of Senate Democrats’ cost-cutting efforts. Federal officials have extended the debt-riddled program’s deadline several times in lieu of enacting permanent changes. Lawmakers are divided on how to sufficiently fund the program and don’t agree on proposals to add coverage for wind damages to the National Flood Insurance Program.
The National Flood Insurance Program’s expiration potentially leaves more than 5.5 million U.S. homes in flood-prone areas without flood insurance protection. The National Flood Insurance Program covers homes located in high-risk flood areas across the United States and is the insurer-of-last-resort in areas where private insurance companies deem it too risky to provide typical flood insurance protection.
The flood insurance program’s expiration date already was extended three times last year to give members of the U.S. House of Representatives and Senate time to work out differences in the program’s direction. House members are demanding the program be expanded to provide insurance protection against wind damage, according to Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee. The National Flood Insurance Program originally would have expired at 11:59 p.m. on March 6 of last year.
Federal lawmakers previously delayed enacting permanent changes to the National flood Insurance Program while debating highly controversial national health care reform measures that would not have taken effect for several years. Republican Scott Brown’s recent upset win over heavily favored Martha Coakley to fill the U.S. Senate seat vacated by the late Ted Kennedy’s death put the brakes on Democrats’ efforts to initiate national health care reform.
National Flood Insurance Program Imperiled Yet Again
Feb. 16, 2010 – Once again, federal lawmakers have failed to come up with long-term changes to the National Flood Insurance Program, which is slated to expire on Feb. 28.
Senate Democrats nixed a provision temporarily extending the National Flood Insurance Program once again from the Senate’s latest legislative effort to “stimulate” the U.S. economy. Senate Majority Leader Harry Reid (D-Nevada) trimmed the measure to help reduce the cost of a proposed $85 billion economic stimulus legislation being called the “Hiring Incentives to Restore Employment Act.” Reid wants to trim the measure down to $15 billion to make it more politically acceptable during a time when the national deficit stands at $12.37 trillion, which the non-partisan Congressional Budget Office estimates will grow by another $1.35 trillion in 2010.
Extending the National Flood Insurance Program until May 31 originally was part of the latest “stimulus” effort but was nixed as part of Senate Democrats’ cost-cutting efforts. Federal officials have extended the debt-riddled program’s deadline several times in lieu of enacting permanent changes. Lawmakers are divided on how to sufficiently fund the program and don’t agree on proposals to add coverage for wind damages to the National Flood Insurance Program.
The National Flood Insurance Program’s expiration potentially would leave more than 5.5 million U.S. homes in flood-prone areas without flood insurance protection. The National Flood Insurance Program covers homes located in high-risk flood areas across the United States and is the insurer-of-last-resort in areas where private insurance companies deem it too risky to provide typical flood insurance protection.
The flood insurance program’s expiration date already was extended three times last year to give members of the U.S. House of Representatives and Senate time to work out differences in the program’s direction. House members are demanding the program be expanded to provide insurance protection against wind damage, according to Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee. The National Flood Insurance Program originally would have expired at 11:59 p.m. on March 6 of last year.
Federal lawmakers previously delayed enacting permanent changes to the National flood Insurance Program while debating highly controversial national health care reform measures that would not have taken effect for several years. Republican Scott Brown’s recent upset win over heavily favored Martha Coakley to fill the U.S. Senate seat vacated by the late Ted Kennedy’s death put the brakes on Democrats’ efforts to initiate national health care reform.
But instead of reconciling various differences and moving forward with long-lasting changes to the National Flood Insurance Program that would impact millions of families in the United States, Capitol Hill lawmakers are prepared to yet again delay real action and now have chosen to delay their latest delaying action.
Chicago Rattled by Early Morning Earthquake
Feb. 10, 2010 – Residents of the greater Chicagoland area were rudely awakened by a magnitude 3.8 earthquake that struck around 4 a.m. this morning and causing generally light damages.
The earthquake shook homes and inflicted only minor damages with no reported injuries but could be felt by residents in neighboring Indiana and Wisconsin, according to the U.S. Geological Survey. The tremor was centered in a farm field adjacent to Plank Road near the town of Hampshire, Illinois and initially was reported to be a magnitude 4.3 earthquake centered in Geneva, Illinois, until U.S. Geological Survey officials later revised their report.
The tremor is the first to hit the Chicago area since a magnitude 5.2 earthquake centered 270 miles south of Chicago struck in April 2008, damaging several walls and foundations but otherwise doing no harm.
Although California and other western states are most noted for earthquake activity, about a third of major U.S. cities considered to be at risk for significant earthquake activity are located east of the Rocky Mountains, according to the U.S. Geological Survey. And about 75 million U.S. citizens in 39 states are considered at risk for earthquake activity. A magnitude 7.3 earthquake struck Charleston, South Carolina, in 1886, and a magnitude 5.3 earthquake was recorded in northern New York State in 1944.
One of the nations most active earthquake areas, the New Madrid Seismic Zone, is situated roughly along the Mississippi River near the Arkansas, Illinois, Kentucky, Missouri and Tennessee borders is one of the nation’s most active and has spawned highly destructive earthquakes ranging up to magnitude 8.0.
A particularly strong series of earthquakes estimated at up to magnitude 8.1 occurred in the New Madrid Seismic Zone in 1811 and 1812 that heavily damaged the few structures existing in the area at the time and was strong enough to be felt as far away as Boston, New York City and Washington D.C., temporarily changed the flow of the Mississippi River and created Reelfoot Lake in Tennessee.
Scientists anticipate a major earthquake in the range of a magnitude 8.0, such as the 1811-1812 series, to strike the New Madrid area every 200 to 300 years. Smaller but equally devastating earthquakes of about magnitude 6.0 are expected to strike about every 80 years along the New Madrid Seismic Zone, but one of that strength has not been reported since 1895, according to the U.S. Geological Survey.
Although earthquakes east of the Continental Divide are less common than west of it, the larger urban centers in the eastern United States means even a modest earthquake would affect much larger areas and cause a great deal of damage.
Heavy Snowfall, Extreme Cold Conspiring Against Homes
Feb. 9, 2010 – Much of the United States has experienced record low temperatures and unusually high precipitation amounts, including record-setting snowstorms in the Mid-Atlantic region that have knocked out power to nearly a million homes in several states, collapsed scores of rooftops and killed at least two people.
More than two feet of snow covered the Washington D.C. area over the weekend with more storms predicted for the region. Local officials reported several buildings whose roofs collapsed due to the excessive weight of snow and ice buildup, and downed trees have cut power to about 300,000 Washington D.C.-area residents. Another 300,000 homes in Maryland and Virginia were without power due to the storm, and some 250,000 residents in New Jersey and Pennsylvania also had their power disrupted by the winter weather.
The storm was blamed for at least two deaths in addition to inflicting a great deal of property damage. But the two deaths are not the first claimed by harsh winter weather this year. Officials in Oklahoma last month reported three people killed after winter storms pummeled the Sooner State and its neighbors.
Winters storms are the third most common cause of property damage and inflict about $1 billion in costs each year, according to the Insurance Information Institute. Nearly a fourth of all homeowners insurance losses in the United States in 2007 were caused by freezing and water damages.
Most homeowners insurance plans protect against damages commonly caused by winter weather, such as wind damage to homes, burst water pipes, power outages and damages caused by fallen trees. But with record cold temperatures being recorded across the nation, officials at the Insurance Information Institute say homeowners need more than a good insurance plan.
“Everyone should also know how to shut off their home’s water system,” said Michael Barry of the Insurance Information Institute. “If water freezes and pipes burst, time is of the essence to keep damage to a minimum.”
When homes lose their power, the air inside the walls where pipes typically are located is much colder than inside a home’s living areas, making pipes vulnerable to extremely cold weather. To help homeowners prevent costly repairs and potentially serious disruptions to their daily lives, officials at the Insurance Information Institute advise cracking open hot and cold water faucets just enough to allow them to drip slowly. The slight movement of the water helps prevent pipes from freezing and bursting in the event of a power outage.
Homeowners also should clean their gutters and remove any leaves or other debris that might prevent melting snow and ice from flowing away from the home, according to the Insurance Information Institute. When gutters are clogged, melting snow and ice back up and freeze, creating an “ice dam” that eventually grows larger and forces water to seep between shingles and force its way into homes.
Homeowners also should keep all walkways free of ice and snow and keep a sharp eye out for tree limbs that might fall under the weight of ice and snow or from the force of the wind and damage homes, vehicles or other property.
State Farm Florida Refusing to Renew Home Insurance Policies
Feb. 1, 2010 – Officials for State Farm Florida recently announced thousands of existing customers in mostly coastal areas would receive non-renewal notices for their homeowners insurance policies starting this week.
The non-renewal notices will be sent to select State Farm Florida policyholders whose current insurance plans are scheduled to expire on Aug. 1. The notices are being sent as part of State Farm Florida’s efforts to reduce the insurer’s exposure to properties more likely to suffer extensive damages in the hurricane-prone state. Company officials said they are whittling away 125,000 of the about 714,000 properties currently insured through State Farm Florida, which is a subsidiary of State Farm Mutual Insurance and the largest private-property insurer in the Sunshine State.
The reduction in the number of properties insured is part of an agreement State Farm Florida officials reached with Florida insurance regulators after the insurer earlier declared its intent to cease insuring homes altogether in Florida.
Florida insurance officials in 2008 denied a request by State Farm Florida to increase its homeowners insurance rates by more than 47 percent after posting significant losses. The insurer has suffered severe losses since the state was pummeled by four hurricanes in one month during the 2004 Atlantic hurricane season. The insurer paid out billions of dollars in claims after the 2004 hurricane season, and its net worth decreased by nearly 25 percent since 2006. State Farm Florida officials say the homeowners insurance company has paid out $1.21 in claims for every dollar in premiums it has collected since 2000.
State Farm Florida borrowed $750 million from its parent company in 2005 and has not repaid the amount. State Farm Florida officials said without a rate increase, the company likely couldn’t continue insuring homes in the hurricane-prone state. The firm already stopped writing new homeowners insurance policies in Florida two years ago.
State Farm Florida officials last year announced a two-year plan to end its insurance coverages in Florida for homeowners, renters, condominium owners, personal liability, boats, personal articles and business property and liability. Although it is a private insurer, the move required state regulatory approval.
But instead of ending all homeowners insurance business in Florida, company officials reached an agreement with Florida insurance regulators allowing the insurer to reduce the number of homes insured in mostly coastal areas and increase its property insurance rates by almost 15 percent for homes and condominiums.
Hurricane Ike Damages Cost Texas Insurers $12 Billion
Feb. 1, 2010 – It took nearly a year and a half to fully tally the damages from 2008’s Hurricane Ike, but insurance industry officials said the storm inflicted nearly $12 billion in insured damages in Texas and other states, making it the costliest hurricane in Texas’ history.
The Insurance Council of Texas recently pegged total insured damages in Texas from Hurricane Ike at just shy of $12 billion, including $9.8 billion in wind insurance claims and another $2.18 billion in flood insurance claims. Actual storm damage costs were higher than $12 billion, but many homes and other property destroyed had no flood insurance protection.
“Thankfully, coastal residents had been adequately warned for Hurricane Ike, but few were prepared for Ike’s destructive storm surge,” Insurance Council of Texas spokesman, Mark Hanna said. “Many residents who lost everything did not have flood insurance.”
Hurricane Ike made landfall at Galveston, Texas, shortly after 3 a.m. on Sept. 13, 2008. A large, category 2 storm, Hurricane Ike brought with it 110 mph winds and a tidal surge up to 13.5 feet in height that destroyed several buildings lining Galveston’s seawall and caused major damage to high rise buildings in nearby Houston.
In addition to damages in Texas, Ike also inflicted some $318 million in flood-related losses in nearby Louisiana. Officials in 10 other states reported some $137 million in flood losses as Ike’s weakened storm system slowly moved inland and across the Midwest, dumping heavy rains as it moved along. The strong winds from Ike’s storm system inflicted a reported $1 billion in storm damages in Ohio, making it the costliest storm in the Buckeye State’s history.
Hurricane Ike surpassed 2001’s Tropical Storm Allison as the costliest storm in Texas’ history. Tropical Storm Allison struck Houston in June 2001, soaking the city in a deluge and inflicting a reported $3.5 billion in insured losses. Hurricane Rita inflicted some $2.8 billion in insured losses across Southeast Texas in 2005.
“Hurricane Ike, which was an extremely large storm at landfall, maintained a wide swath of damaging winds. Wind damage [was] widespread, not only along the coast, but also extending well over 200 miles inland from Galveston,” said Dr. Peter Dailey, director of atmospheric science at AIR Worldwide.
Boston-based AIR Worldwide is an international catastrophe-risk consulting company that combines computer modeling with risk management to advise homeowners insurance companies and other organizations on catastrophic-level risks.
National Flood Insurance Program Extended Through February
Dec. 22, 2009 – An estimated 5.5 million homes in the United States will continue to be covered through the National Flood Insurance Program after federal officials once again delayed enacting permanent changes while occupying their time debating controversial national health care reform measures that won’t take effect for several years.
President Barack Obama yesterday signed into law a measure extending the National Flood Insurance Program through February 2010. The U.S. Senate last week approved the temporary extension as part of a defense appropriations bill.
Although failing to make permanent changes to the federal insurance program facing financial difficulties, the Senate continues debating a highly controversial health care reform that won’t take effect until 2014. In the meantime, insurance industry proponents say federal officials will have more time to address National Flood Insurance Program shortcomings.
“We applaud the Senate for keeping the National Flood Insurance Program in place,” Ben McKay of the Property Casualty Insurers Association of America said in a statement. “We look forward to working with the House and Senate in 2010 to advocate a long-term extension that ensures the program’s fiscal soundness and protects homeowners.”
The National Flood Insurance Program was scheduled to expire on Dec. 18, potentially leaving more than 5.5 million U.S. homes in flood-prone areas without flood insurance protection. The National Flood Insurance Program is the insurer of last resort in areas where private insurance companies deem it too risky to provide typical flood insurance protection. The federal program covers homes located across America in high-risk flood areas.
The flood insurance program’s expiration date already had been extended twice this year to give members of the U.S. House of Representatives and Senate time to work out differences in the program’s direction. House members are demanding the program be expanded to provide insurance protection against wind damage, according to Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee.
The National Flood Insurance Program initially would have expired at 11:59 p.m. on March 6, but Congress passed continuing resolutions temporarily extending funding for federal programs under an omnibus bill while legislators hammer out a final compromise. The recent passage of the omnibus funding measure ensured a temporary extension of the National Flood Insurance Program while additional program reform is debated, but federal lawmakers have been sidetracked while debating proposed national health care reform measures that are highly controversial and won’t take effect for several years.
National Flood Insurance Program to Expire; Millions of Homes Affected
Dec. 16, 2009 – As federal lawmakers continue grappling over proposed health care reform measures that have been watered down and wouldn’t take effect for years, a matter with immediate impact on more than 5 million U.S. families continues being pushed aside.
The National Flood Insurance Program is scheduled to expire on Dec. 18, potentially leaving more than 5.5 million U.S. homes in flood-prone areas without flood insurance protection. Federal lawmakers have balked several times this year at enacting long-term changes to the program, instead twice opting to extend it for months at a time.
And federal lawmakers are expected to extend the program without changes once again.
The National Flood Insurance Program is the insurer of last resort in areas where private insurance companies deem it too risky to provide typical flood insurance protection. The federal program covers homes located across America in high-risk flood areas.
The flood insurance program’s expiration date already had been extended twice this year to give members of the U.S. House of Representatives and Senate time to work out differences in the program’s direction. House members are demanding the program be expanded to provide insurance protection against wind damage, according to Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee.
The National Flood Insurance Program initially would have expired at 11:59 p.m. on March 6, but Congress passed continuing resolutions temporarily extending funding for federal programs under an omnibus bill while legislators hammer out a final compromise. The recent passage of the omnibus funding measure ensured a temporary extension of the National Flood Insurance Program while additional program reform is debated, but federal lawmakers have been sidetracked while debating proposed national health care reform measures that won’t take effect for several years.
President Barack Obama made health care reform a top domestic priority, but disagreement among Democratic lawmakers and unified opposition among Republicans have slowed reform efforts. In the U.S. Senate, Majority Leader Harry Reid (D-Nevada) cannot secure the 60 votes necessary to advance a legislative package and now has a watered-down package that Democrats in the House of Representatives say doesn’t do enough to reform the nation’s $2.5 trillion-a-year health care industry.
But while federal lawmakers continue battling over health care measures not scheduled to take effect for years, millions of U.S. families could lose important flood insurance protections for their homes and other properties. If the flood insurance program expires, insurance agents and brokers cannot write, renew or endorse National Flood Insurance Program policies.
Louisiana Officials Tallying Chinese Drywall Problems
Dec. 9, 2009 – In light of a recent federal investigation, officials in Louisiana are encouraging homeowners who suspect they might have bad drywall manufactured in China and recently installed in their homes to report any suspected problems.
The Louisiana Recovery Authority is collecting information as part of a larger federal effort to assess the extent of problems in the United States. Some 415 Louisiana homeowners last week reported having contaminated drywall. Information is being collected online at www.lra.louisiana.gov/drywallform or by calling toll-free at (866) 684-1713 through Dec. 16
A recent federal study of 51 U.S. homes equipped with drywall manufactured in China indicated a “strong” link between in-home corrosion and drywall material.
Investigators from the U.S. Consumer Product Safety Commission with the help of Chinese officials recently conducted an indoor air study of dozens of homes recently equipped with drywall manufactured in China. Without declaring results conclusive, researchers say there is merit to the more than 2,000 complaints the federal agency has received from U.S. homeowners.
“We now can show a strong association between homes with the problem drywall and the levels of hydrogen sulfide in those homes and corrosion of metals in those homes,” investigators for the Consumer Product Safety Commission said in their announcement of results.
Research results indicated hydrogen sulfide gas emitted by contaminated drywall is the primary culprit in corroding copper and silver in homes equipped with Chinese drywall. Researchers also discovered elevated levels of formaldehyde in newer homes – whether or not they had Chinese drywall. Modern cabinetry and carpeting emit low levels of formaldehyde, according to researchers. Although formaldehyde and hydrogen sulfide gas amounts detected were too low to pose safety risks, federal investigators suspect a combination of them and other compounds commonly found in homes potentially might be harmful to structures and public health.
Officials for the Consumer Product and Safety Commission intend to work with federal lawmakers to implement corrective measures and look into potential health problems tied to the substandard drywall.
As the U.S. housing boom hit its peak near the turn of the century, a shortage of construction materials forced many builders to utilize drywall manufactured in China. Unfortunately, some Chinese drywall contains gypsum and trace elements of strontium sulfide, which can emit corrosive sulfuric compounds and an odor similar to rotten eggs.
A recent report by the Associated Press indicates some 500 million pounds of Chinese gypsum board was imported to meet domestic construction demands – particularly between 2004 and 2008 when thousands of homes along the Gulf of Mexico were being rebuilt in the wake of four hurricanes slamming into Florida during a month-long stretch in 2004 and Hurricane Katrina and Hurricane Rita destroying large areas of New Orleans and other Gulf Coast communities in 2005.
Federal officials estimate about 100,000 homes in the United States contain Chinese drywall. The total cost of replacing the faulty drywall could reach $25 billion, according to the Towers Perrin consulting firm. Some Chinese drywall manufacturers have said their products are safe and suggested bad gypsum tainted only some of the materials shipped to the United States in recent years.
Many homeowners have blamed the Chinese drywall for corroding their homes’ copper pipes, causing other property damage and making family members ill. Among potential resolutions sought are having the Chinese government pay at least a portion of the cost to replace the faulty drywall and implementing regulatory standards to ensure similar products aren’t sold in the United States. But federal officials caution Chinese officials simply can refuse to cooperate.
State Farm Florida Exit Hearing Postponed
Dec. 3, 2009 – An administrative hearing regarding a proposed exit from Florida’s homeowners insurance market by its largest player has been postponed until Jan. 25, although some speculate the hearing may never occur.
Florida insurance officials and officials for State Farm Florida – the Sunshine State’s largest private home insurer – are negotiating terms of the firm’s planned exit from the Florida homeowners insurance market. But the hearing might never happen if both parties agree to a plan allowing State Farm Florida to continue providing homeowners insurance coverage in addition to its other property and casualty insurance offerings.
Florida Insurance Commissioner Kevin McCarty previously said he wants to work out an arrangement enabling State Farm Florida to continue offering homeowners insurance and other property insurance coverages in the hurricane-prone state. McCarty in 2008 denied a request by State Farm Florida officials to increase homeowners insurance rates by an average 47.1 percent. The state’s Division of Administrative Hearings upheld the decision a year ago, which was appealed to and affirmed by the state’s First District Court of Appeals.
McCarty accused State Farm Florida officials of using the rate denial as a pretext to pull out of the state’s homeowners insurance market, but company officials claim financial realities are forcing the insurer to exit the market unless it can charge higher premiums.
“This is not an action we wanted to take but one we must take given the realities of the Florida property insurance market,” State Farm Florida President Jim Thompson said. “Faced with steeply declining resources to cover future claims and expenses, State Farm Florida has little choice.”
When initially denied the requested insurance rate increase, State Farm Florida announced a two-year plan to withdraw from the state’s property insurance market while continuing its life, health and auto insurance businesses. But Florida officials have denied the withdrawal request unless the insurer can find other private insurers to assume the more than 200,000 property insurance policies underwritten by State Farm Florida.
McCarty cited concerns that too many people would opt for the state-backed Citizens Property Insurance Corporation.
State Farm Florida officials requested the 47 percent rate hike after posting significant losses in recent years. The Florida subsidiary of State Farm Mutual Insurance has suffered severe losses since the state was pummeled by four hurricanes in a month during the 2004 Atlantic hurricane season.
State Farm Florida officials say the insurer has paid out $1.21 in claims for every dollar in premiums it has collected since 2000. The insurer paid out billions of dollars in claims after the 2004 hurricane season, and its net worth has decreased by nearly 25 percent since 2006. The insurer borrowed $750 million from its parent company in 2005 and has not repaid the amount.
Hurricane Season Ends with Light Damages and Two Lives Lost in U.S.
Dec. 2, 2009 – The 2009 Atlantic hurricane season officially ended yesterday with no major storms landing in the United States and only two lives claimed as Hurricane Bill brushed past the East Coast some 150 miles offshore in August.
A total of nine storms – five of them hurricanes – formed this year, making 2009 the quietest Atlantic Storm season since 2006, when an identical number of storms and hurricanes were counted. The storm totals were the lowest since 1997, when only seven storms and three hurricanes formed. Early forecasts predicted up to 14 storms and seven hurricanes this year.
Storm forecasters cited a strong El Nino event as the primary reason the 2009 Atlantic hurricane season passed without a single major storm or hurricane making landfall in the United States and only moderately affecting other areas where weakened tropical storms landed. An El Nino event is an unusual warming of waters in the Pacific Ocean that creates varying upper-level winds capable of decapitating large tropical storms and preventing hurricanes from forming.
The 2009 storm season was the least active in more than a decade, according to the National Hurricane Center in Miami. Storm forecasters for AccuWeather earlier predicted the 2009 Atlantic storm season would see three storms, at least one of which would be a hurricane, making landfall along the United States coastline – one fewer than the four that made landfall last year. The forecast also predicted a decrease in the number of named storms.
The Atlantic storm season runs from June 1 through Nov. 30 each year, but this year produced only nine named storms. Three developed into hurricanes but either stayed offshore or weakened significantly before making landfall as tropical storms. Just two tropical storms made landfall in the United States, causing only minor, localized flooding.
Tropical Storm Ida landed in Alabama in early November and slowly crept up the East Coast, soaking several Mid-Atlantic states. Tropical Storm Claudette in August landed in the Florida panhandle region but caused little damage. Hurricane Bill in August claimed two lives as it bypassed the United States en route to Canada. Despite not landing in the United States, the hurricane created strong seas that drowned a 7-year-old girl in Maine and a 54-year-old man in Florida who attempted to bodysurf as the storm passed by the Sunshine State.
Federal Report: Chinese Drywall Likely Harmed Homes
Nov. 24, 2009 – A recent federal study of 51 U.S. homes equipped with drywall manufactured in China indicates a “strong” link between in-home corrosion and drywall material.
Investigators from the U.S. Consumer Product Safety Commission with the help of Chinese officials recently conducted an indoor air study of dozens of homes recently equipped with drywall manufactured in China. Without declaring results conclusive, researchers say there is merit to the more than 2,000 complaints the federal agency has received from U.S. homeowners.
“We now can show a strong association between homes with the problem drywall and the levels of hydrogen sulfide in those homes and corrosion of metals in those homes,” investigators for the Consumer Product Safety Commission said in their announcement of results.
Research results indicated hydrogen sulfide gas emitted by contaminated drywall is the primary culprit in corroding copper and silver in homes equipped with Chinese drywall. Researchers also discovered elevated levels of formaldehyde in newer homes – whether or not they had Chinese drywall. Modern cabinetry and carpeting emit low levels of formaldehyde, according to researchers. Although formaldehyde and hydrogen sulfide gas amounts detected were too low to pose safety risks, federal investigators suspect a combination of them and other compounds commonly found in homes potentially might be harmful to structures and public health.
Officials for the Consumer Product and Safety Commission intend to work with federal lawmakers to implement corrective measures and look into potential health problems tied to the substandard drywall.
As the U.S. housing boom hit its peak near the turn of the century, a shortage of construction materials forced many builders to utilize drywall manufactured in China. Unfortunately, some Chinese drywall contains gypsum and trace elements of strontium sulfide, which can emit corrosive sulfuric compounds and an odor similar to rotten eggs.
A recent report by the Associated Press indicates some 500 million pounds of Chinese gypsum board was imported to meet domestic construction demands – particularly between 2004 and 2008 when thousands of homes along the Gulf of Mexico were being rebuilt in the wake of four hurricanes slamming into Florida during a month-long stretch in 2004 and Hurricane Katrina and Hurricane Rita destroying large areas of New Orleans and other Gulf Coast communities in 2005.
Federal officials estimate about 100,000 homes in the United States contain Chinese drywall. The total cost of replacing the faulty drywall could reach $25 billion, according to the Towers Perrin consulting firm. Some Chinese drywall manufacturers have said their products are safe and suggested bad gypsum tainted only some of the materials shipped to the United States in recent years.
Many homeowners have blamed the Chinese drywall for corroding their homes’ copper pipes, causing other property damage and making family members ill. Among potential resolutions sought are having the Chinese government pay at least a portion of the cost to replace the faulty drywall and implementing regulatory standards to ensure similar products aren’t sold in the United States. But federal officials caution Chinese officials simply can refuse to cooperate.
Weakened but Deadly Ida Drenching Florida, Alabama
Nov. 10, 2009 – Hurricane Ida killed an estimated 144 people last week in El Salvador, but the deadly storm weakened into a tropical storm as it landed in Alabama today, becoming likely the last Atlantic storm to make landfall in the United States during what has been one of the calmest storm seasons in recent history.
Hurricane Ida peaked at Category 2 status on the Saffir-Simpson scale with sustained winds of up to 110 mph as it brushed past Central America over the weekend, drenching the mountainous region with torrential rains and causing mudslides, flooding and other natural disasters that claimed a reported 144 lives in El Salvador.
As the storm continued into the Gulf of Mexico, oil companies evacuated endangered off-shore oil-production facilities, shutting down nearly 30 percent of Gulf oil rigs as the storm passed and inflicted only minimal damage. Despite the storm weakening, the U.S. Coast Guard had to rescue two workers from an oil rig south of New Orleans yesterday.
The storm also is blamed for at least one potential death in the United States. A 70-year-old man was reported missing after his boat flipped in the Mississippi River while trying to help two stranded boaters yesterday.
Coastal communities in Alabama, Florida, Louisiana and Mississippi sounded emergency warnings, and nearly 3 million residents could be impacted by torrential rains and localized flooding, according to the U.S. Census Bureau.
Ida is the second tropical storm to make landfall in the United States this year. Tropical Storm Claudette in August landed in the Florida panhandle region but caused little damage. Hurricane Bill in August claimed two lives as it bypassed the United States en route to Canada. Despite not landing in the United States, the hurricane created strong seas that drowned a 7-year-old girl in Maine and a 54-year-old man in Florida who attempted to bodysurf as the storm passed by the Sunshine State.
Mostly due to a strong El Nino event, the peak of the 2009 Atlantic hurricane season passed without a single major storm or hurricane making landfall in the United States and only moderately affecting other areas where weakened tropical storms have made landfall. An El Nino is an unusual warming of waters in the Pacific Ocean that creates varying upper-level winds capable of decapitating large tropical storms and preventing hurricane formation.
Thus far, the 2009 storm season has been the least active in more than a decade, according to the National Hurricane Center in Miami. The Atlantic storm season generally runs from June through November and has been much calmer than predicted.
Storm forecasters for AccuWeather earlier predicted the 2009 Atlantic storm season would see three storms, at least one of which would be a hurricane, making landfall along the United States coastline – one fewer than the four that made landfall last year. The forecast also predicted a decrease in the number of named storms.
Report: Dog Bites Tally $387 Million in 2008 Insurance Claims
Nov. 4, 2009 – Dogs biting humans accounted for about a third of all homeowners insurance claims and cost more than $387 million in 2008 – nearly 9 percent more than in 2007, according to a recent study by the non-profit Insurance Information Institute.
“Most dogs are friendly, loving members of the family. But even normally docile dogs may bite when they are frightened or when protecting their puppies, owners or food,” said Loretta Worters, vice president of the Insurance Information Institute. “Ultimately, the responsibility for properly training and controlling a dog rests with the owner.”
On average, dogs bite more than 4.5 million people each year in the United States, with about 900,000 requiring medical attention and 31,000 reconstructive surgery, according to the U.S. Centers for Disease Control and Prevention. Children account for about half of all dog bite victims.
The number of dog bites reported in the United States has increased the past five years. Because studies show more than half of all dog bites occur on property owned by the dog’s owner, liability becomes an issue for homeowners and insurers. The cost of treating dog bites and defending potential liability lawsuits has increased along with the number of bites each year.
Dog bite claims on average cost $24,461 in 2008 – a nearly 28 percent increase during the prior five years. The 15,823 insurance claims filed in 2008 were up by nearly 9 percent over the 14,531 filed in 2007. Although trespassers are not protected against dog bites in most states, when dog owners are liable for injuries to others, they could be held responsible for paying medical bills, lost wages, pain and suffering and property damages.
Some suggest a combination of increased medical costs and liability awards to victims are at least partly responsible for the rise in claims filed each year.
“The rise in dog bite claims over the course of the past five years can be attributable to the increased medical costs as well as the size of settlements, judgments and jury awards which have risen well above inflation in recent years,” said Worters.
While property owners generally are liable when their pets injure others, some states have “first bite” laws forgiving a dog for its first bite. But once it has exhibited “vicious behavior” by biting or otherwise acting aggressively, the owner is liable, according to the Insurance Information Institute. Many states have stricken their ”first bite” laws and hold owners liable for any injuries.