Long Before Tahoe Fire Flamed Out, Media Warned of Underinsurance Potential - July 10, 2007
Well before the last embers of the Angora Fire that burned approximately 3,100 acres, destroyed 254 homes and 75 other buildings, damaged 14 more residences in and around South Lake Tahoe, and caused as much as $100 million to $150 million in insured losses had flickered out, various media reports mentioned problems encountered by homeowners who were victims of wildfires in Southern California four years before and discovered they lacked adequate coverage to rebuild.
Poizner, who said his staff was trying to determine if underinsurance will be a “widespread” problem for those whose homes burned in the Angora fire, urged homeowners affected by the blaze to meet with their agents to determine if their coverage is adequate.
Best Affirms Rating of Mercury - June 25, 2007
A.M. Best Co. affirmed its “A+” financial-strength ratings of Mercury Casualty Group and its member insurers. The ratings, which have a stable outlook, reflect Mercury’s “strong” risk-adjusted capital position, a conservative investment risk profile and low dependence on reinsurance, according to Best. In addition, Best said Mercury has a “sustainable” competitive advantage within its core personal auto segment because of the company’s “strong independent agency relationships,” pricing and risk classification expertise, and aggressive claims-management practices.
NAIC Survey: Many Homeowners Aren’t Aware of Property Coverage Exclusions
There is widespread misunderstanding among homeowners insureds what their policies do not cover, according to a survey released last week by the National Association of Insurance Commissioners. The study found that 33% of respondents believe flood damages would be covered by a standard homeowners or fire policy. Other false impressions of the extent of coverage in homeowners and fire insurance uncovered in the NAIC survey include the following:
· 68% of respondents think cars, boats and motorcycles stolen from or damaged on their property are covered.
· 51% assume damages from a break in the water line on their property supplying water to their home are covered.
· 37% believe there’s coverage for damages due to a break in the sewer line on their property that connects to their municipal sewer system.
· 35% think damages from earthquakes are covered.
· 34% believe there’s coverage for damages from mold.
· 31% think damages from termites or other infestation are covered.
· 22% believe there’s coverage for pets stolen from or injured on their property.
The NAIC also found that 12% of respondents did not know what kind of insurance they had, whether it was actual cash value or replacement cost. Of those who did know, 24% had ACV and 64% replacement cost. Finally, in a finding that’s sure to please trial lawyers, 28% reported greater concern now than five years ago about being sued.
Best Affirms Financial-Strength Rating of SAFECO
A.M. Best Co. affirmed its “A” financial-strength ratings of Safeco Insurance Cos. and its member carriers. The outlook for the ratings is positive, which is based on Safeco’s operating focus on personal and small commercial lines through restructured operations as well as the financial support of its parent, Safeco Corp.
Best said the ratings reflect Safeco’s “continued solid operating performance, excellent capitalization and strong presence within the property/casualty industry.” Offsetting factors include Safeco’s high expense ratio as well as moderate exposure to earthquakes, which is manageable given the company’s capital and reinsurance, according to Best.
Nationwide Subsidiary Buys Large California Nonstandard Auto Producer
THI Holdings, a subsidiary of Nationwide Mutual Insurance Co. and parent of Titan and Victoria nonstandard auto carriers, acquired Eastwood Insurance Services of Anaheim Hills for $217 million. Eastwood, one of the largest producers of nonstandard auto business in California, also does business in Nevada, Arizona, Texas and Florida, as do Titan and Victoria insurers. Eastwood operates 47 multi-line agencies in the five states and also offers homeowners, motorcycle, recreational vehicle and commercial coverages.