By Deon Roberts, Social Media Editor
I barely avoided insurance disaster today, and I don’t know whether to be grateful or to have survivor’s guilt.
It turns out my homeowners insurance company, American National Property and Casualty Co., is not renewing policies that are less than three years old. Although I’m not sure, the company began doing this around December as a means to reduce exposure to future hurricane-damage claims.
I’ve been with the company for just about three years. So, thankfully, I still have coverage – for now.
But other people I know are not so lucky.
Some friends of mine recently found out that ANPAC is not renewing their policy, because, my friends said, they have been with the company for less than three years. Now, they must buy insurance through the state’s insurer of last resort, Louisiana Citizens Property Insurance Corp., which I understand costs 30 percent more on average than the commercial insurance market.
My friends’ home did not flood. It was barely damaged. Yet they lost insurance simply due to not being with the company long enough. It pains me to hear their story.
This state is in an insurance crisis. But I really don’t have to say that. Everyone knows it.
How will people afford to live here, if we are forced to pay premiums that keep rising, rising, rising?
I’m not a rich man. I don’t know if I could shoulder 30 percent higher insurance premiums. It would be hard, that’s for sure.
In the past three years, my premiums have already doubled. Funny, but I don’t recall my property value doubling in the past three years. I, too, suffered little damaged during Katrina. I had no water, just tree limbs on the roof.
I left messages with the company today to explain why they were dropping policies, but no one returned my calls yet.
To the credit of ANPAC, I must say they were a good company to work with after the storm. They processed my claim quickly and didn’t give us any trouble.
I’m terrified of the future. I can’t imagine my premiums going any higher, but I fear they will. What if tomorrow ANPAC decides to drop policies that are less than five years old, 10 years old?
Judy Wright, spokeswoman for the Louisiana Department of Insurance, tells me that the state allows an insurance company to drop a customer if they have been with the company for less than three years. If you’ve been with a company longer, you are considered to be vested, she said.
“If you’re with a company for less than three years, they’re able to drop the wind and hail coverage,” she said. ANPAC has 19,000 homeowners policies in Louisiana, she said.
This next part is truly bizarre. Wright said if you make changes to your policy, then the company can also drop your wind and hail coverage. So, if I upgrade my policy and buy more coverage, the insurance company can dump me? Sounds like a cheap excuse for an insurance company to get rid of homeowners and reduce their risk. What a sham. No wonder the insurance industry has such a bad name.
This state needs a plan put into effect yesterday, not tomorrow. Insurers are barely writing policies since Katrina. The only option for people who don’t get renewed is the Citizens plan.
The way to eliminate this crisis and get insurers writing in our state again is to instill confidence in the insurance industry. How do we do that? Well, we start by building stronger homes, which is now required under new building codes.
But more than anything else, we need a stronger hurricane and flood protection system. I’m talking Cat 5 protection – nothing less. I want to hear our leaders talk about this issue all day, every day. The squeaky wheel gets the grease, right?
To be perfectly honest, if I were a decision maker for an insurance company, I wouldn’t want to insure homes in this area either. Think about it. Would you want to have that much risk? Would you want to insure homes in an area that could flood again just as badly as it did during Katrina?
The governor and our elected leaders need to send the message to Washington every day that this area will accept nothing less than the strongest hurricane protection that can be built. Otherwise, more of us will feel the insurance squeeze, which doesn’t feel too good.