Local insurance hikes will be steep

Local insurance hikes will be steepTHIBODAUX – Insurance-rate hikes for Louisiana Citizens policy holders will be much higher in most parts of Lafourche and Terrebonne parishes than the 7 percent statewide average.

Set to go into effect April 1, premium increases for policyholders with Louisiana’s insurer of last resort will be 22 percent for Terrebonne Parish residents north of the Gulf Intracoastal Waterway and 33 percent south of the Intracoastal Waterway.

In Lafourche, Citizens’ customers south of the Intracoastal will see a 32 percent increase. The only local area falling below the state average will be in Lafourche north of the Intracoastal. Policy holders there will see a 6 percent increase.

The 7 percent average increase statewide is the outcome of a settlement between the state Department of Insurance and Citizens, It falls below the hike proposed by Citizens in October.

Projected to produce $15.3 million of additional revenue for Citizens, a state-sponsored insurer, the 7 percent change is part of a plan to ensure its premiums stay above the offerings of private companies.

The intent is to move policyholders away from the state-sponsored program and to a private insurer, according to Insurance Commissioner Jim Donelon.

Citizens primarily provides homeowner coverage for people who can’t find it elsewhere.

The rate hike proposed in October, approved by a 4-3 vote of Citizen0’s board members, meant Lafourche and Terrebonne customers were looking at increases as high as 43 percent in some coastal regions.

But the estimate used to compute the increase wasn’t on par with actuarial standards and was tossed, Donelon said.

The department must choose the higher of two homeowner premium estimates, in accordance with a state’s law intent on encouraging private competitions. One is based on surveying companies about their rates, and the other is based on a formula evaluating risk.

Donelon said he took the market estimate, which was lower, after staff members noted the other estimate included unaudited data.

The April hikes, which will come when policies are renewed, could be just one of two increases this year.

April’s increase is a 2008 rate adjustment, necessary because John Wortman, chief executive of Citizens, wants to avoid risking a delay for the 2009 rate analysis.

Citizens will begin that rate analysis between April and June, so policies renewing in the fall could experience the 2008 and 2009 spike at the same time.

6 Tips to Save on Insurance Costs

More than other age groups, people over the age of 65 are reluctant to consider changes in their insurance needs, according to a national survey of homeowners by Trusted Choice and the Independent Insurance Agents & Brokers of America.

Overall, nearly 24 percent of Americans have made changes to their auto, home, life, or health insurance coverage in the past year in order to reduce costs; 18 percent have considered such changes in the past few months; and 33 percent would consider insurance cutbacks in 2009. The overwhelming reason for the reductions is the sorry state of the economy.

Compared with those overall responses, however, older consumers were less likely across the board to make reductions. Only 9 percent of respondents ages 65 and older had made insurance reductions in the past year; 12 percent had considered them recently; and only 10 percent said they would consider them in 2009.

According to the 2007 survey of consumer household expenditures by the U.S. Labor Department, average after-tax income of households led by people ages 65 and higher was about $39,180. Of this amount, health insurance spending averaged $2,770, car insurance cost $975, and $329 was spent on life insurance and other types of personal insurance.

There was no breakout for home insurance, but even without that expense, average insurance payments were about $4,700, or more than 10 percent of after-tax income. By comparison, annual household spending on food—including food at home and meals away from home—was only $4,515.

So, while older consumers might be reluctant to reduce their spending on insurance, they should think about whether some wise trims can be made without sacrificing their key insurance safeguards. Here are tips for where to look for auto, home, life, and health insurance savings:

1) Many seniors have older vehicles and do not need expensive low-dollar deductibles for collision and comprehensive coverage. Consider selecting higher deductibles. However, do not scrimp on liability protection or uninsured motorist coverage. More people are dropping their car insurance because of the tough economy, so you need to make sure you're covered should you be in an accident with an uninsured driver.

2) Some insurers have responded to last summer's $4 gasoline by expanding their reduced-driving discounts to better serve people who have cut back on their driving. If you do not drive many miles, you may qualify.

3) When you rent a car, odds are you do not need rental-car insurance and can rely on your existing car insurance policy to protect you. You will, however, be on the hook for the deductible payment should you be in an accident that is your fault.

4) Inflation protection is a must-keep feature of home insurance, but like millions of seniors who have downsized, you may have reduced your possessions. Review whether you still need special riders on jewelry, furs, computers, and other items.

5) Life insurance is designed to help loved ones, providing them money to replace the income lost by your death and helping to conserve assets in your estate should you have enough wealth to trigger estate taxes. As we age, the protective objectives of life insurance diminish and you may not need as large a policy.

6) Substitute generics for brand-name drugs. The U.S. Food and Drug Administration has a tool to identify generic equivalents of brand-name prescription drugs. Use it and see if you can save money.

La. homeowners to get cash from incentive fund

Louisiana homeowners could receive cash from the unused portion of an expired pot of government money used to lure insurance companies to the state, Insurance Commissioner Jim Donelon said Monday.

Donelon estimated the checks would total $50 or more, though he's not sure when the Department of Insurance will mail them.

The money comes from the remainder of a $100 million fund set up in 2007 as matching grants for private insurance companies that agree to begin writing policies in coastal areas.

The incentive program was aimed at improving homeowners' access to private insurance after the 2005 hurricanes, and to reduce the number of policies written by the state's "last-resort" insurer, Louisiana Citizens Property Insurance Corp.

The insurance department issued $29 million in grants, and state law says the remaining money should be divvied up and given to holders of homeowners policies.

Donelon, speaking to the Press Club of Baton Rouge, also said he plans to back legislation this spring that would help consumers by eliminating a health-insurance loophole that can produce bills from radiologists, pathologists and anesthesiologists. Donelon said a small percentage of those specialists do not fall under health insurance plans, and their care can trigger bills on top of patients' deductibles.

Donelon said he expects the bill to encounter opposition from the insurance and hospital industries.

Seattle - In the United States there are over 40 million citizens that includes 10 million children who are without health insurance. This is going to

Seattle - In the United States there are over 40 million citizens that includes 10 million children who are without health insurance. This is going to be one of the biggest troubles that soon to be official President Barrack Obama is going to have to handle when he takes office in a few weeks.

Not only do so many people in our country not have health insurance, but those who do currently have it may soon not be able to afford it as insurance premiums are continuing to rise. The fact is that the way things are with health care presently may continue to go downhill and get worse before anyone sees it get better due to the state of our economy.

President elect Obama has reached out to the citizens of our country regarding the health care system and thousands answered that call. Obama asked citizens to come together in groups and discuss what they felt needed to be done to improve the health care system in our country and to come up with some possible solutions. Obama’s transition team set up Sunday as the official date to gather all information discussed and any videos that were made and have them uploaded to their site for review.

In Ohio alone, more than 120 meetings were held and the transition team has received more then 600 reports from groups since the uploading began.

Jen Psaki, a transition team spokesperson has said that they have received an overwhelming outcry from our citizens saying that there is a need for change no matter who the person is. There has been many stories received of very sad situations regarding those who cannot afford health care.

This is not the first time that citizen input has been looked for, however last time there was hardly any medical professionals involved. This time around the medical professionals made sure to give their input. They are concerned with the fact that medical students are choosing to go to the higher paying specialties in their education because nowadays it seems that those who are in general practice are not as valued. Due to this decision rates will continue to rise in health care costs.

There are many reasons that health care is so expensive and why people cannot afford it. There are also many decisions that need to be made by President elect Obama and his transition team along with Tom Daschle, the Secretary of the Department of Health and Human Services. Let us hope and pray that the right decisions are made and the health care system improves quickly for all.

Crash Course: More drivers are going without insurance in down economy

The Wall Street Journal
More drivers are letting their car insurance lapse because of the sour economy, putting themselves and others at risk.

Several hundred thousand drivers dropped their insurance in the past year as the jobless rate climbed, estimates a study to be released soon by the Insurance Research Council, an industry-funded group.

Online agency Insurance.com says it also is seeing evidence recently of more uninsured motorists. It says that as many as 40 percent of callers following up on online applications had let their previous policies lapse, up from less than 10 percent a couple years ago.

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* Story: What to do after an accident
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Without a net

A slumping economy is putting more uninsured drivers on the road. Here’s how to protect yourself:

• Make sure you have extra coverage that compensates you if you’re hit by an uninsured motorist.

• Set your own liability insurance amount commensurate with your assets. This amount also helps determine the limit of your uninsured motorist coverage.

The trend is bad news for everybody on the road. If you’re hit by an uninsured motorist, you may have to sue to recover costs, and many uninsured motorists have few assets. You can protect yourself by carrying uninsured-motorist coverage — almost half of states require the added coverage — but this may boost your premium.

Even in good times, many Americans drive without insurance. The Insurance Research Council’s previous study, released in 2006, found that nearly 15 percent of drivers nationally were uninsured in 2004, up from about 13 percent in 1999. In some states, including Mississippi, California and Arizona, roughly a quarter of drivers weren’t insured.

Preliminary data from the council’s forthcoming study “indicate that a single percentage point increase in the unemployment rate is associated with a half-point increase in the percentage of uninsured drivers,” said David Corum, council vice president. The nation’s jobless rate was up two percentage points to 6.7 percent in November from a year earlier. The group estimates the number of uninsured motorists based on data from insurance claims.

Possibly adding to the problem is the fact that auto-insurance rates are rising again after a couple of years of flat or declining premiums. Premiums nationally rose 3.8 percent in November from a year ago, according to the Labor Department’s consumer price index.

Agents say a growing number of customers are stripping down their auto-insurance policies, taking the absolute minimum level of liability coverage legally required to drive in their state.

“A good proportion of people on the road are either uninsured or underinsured, and so you have to protect yourself,” said Robert Hartwig, president of the Insurance Information Institute, a nonprofit group. “Your odds of being in an accident with an uninsured driver are substantial.”

Motorists driving without insurance also face risks. In a wreck, they could lose whatever assets they own in a court judgment. Also, driving without insurance is illegal in 48 states and the District of Columbia. The only states that don’t require insurance are New Hampshire and Wisconsin; these states require drivers to show proof of the financial ability to pay damages for liability.

Motorists who allow their policies to lapse for any reason also often must pay an initial 25 percent to 50 percent surcharge for a new policy. Insurance companies charge them more because they consider them irresponsible: Unlicensed and uninsured drivers are disproportionately involved in fatal accidents.

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