Storms 411

Day 19 – 9/9/05, Policyholders to Help Foot Insurance Tab

BATON ROUGE -- Homeowners from Shreveport to Slidell will be hit with a 20 percent increase in insurance premiums next year thanks to new state legislation forcing property owners statewide to reimburse insurance companies for supporting the state's catastrophe insurance fund.

After next year, the special charge to policyholders statewide will continue at 10 percent, probably for several years, state insurance officials said. The increases are in addition to rate hikes that insurers are likely to seek from state regulators as a result of new risk assessments after Hurricane Katrina.

State legislation in 2003 created the Louisiana Citizens Property Insurance Corp., basically a state-sanctioned company providing homeowners insurance to people who cannot get it at reasonable prices on the open market. The corporation is especially geared toward storm-prone areas, but it also helps homeowners who can't get anyone else to write a policy for any number of reasons, such as credit problems.

Citizens Property has 135,000 policies statewide, with a total exposure of about $12 billion, Citizens Secretary Terry Lisotta said. About 60,000 of the policies are likely to result in claims as a result of Katrina, he said. The coverage does not include flood damage, which is handled by a federal insurance program. [Read more - NOLA]

How Do You Pay For a House that No Longer Eexists?

Preliminary reports indicate that many New Orleans homeowners don't have financial protection in case of flooding, which isn't covered by most home insurance providers. If insurance can't pick up the slack, do you still have to pay a mortgage on a house that no longer exists? And if so, how?

Most mortgages must be paid back in full—whether you pay out of pocket or an insurance agency covers you. Bankrupt individuals, however, are exempt from payment.

More commonly, aid is sought from the Federal Emergency Management Administration. The first step to receiving FEMA assistance is to register your personal information with the agency via telephone or this Web site. Applicants must provide their Social Security number, insurance status, and family income, and FEMA asks that individuals provide as much contact information as possible, such as mailing address and phone number.

Again, help the Red Cross help others. Give generously. Thanks!

A Message From A New Orleans Mortage Company

A message from a New Orleans mortage company...

TO ALL STANDARD MORTGAGE CORPORATION CUSTOMERS:

OUR THOUGHTS AND PRAYERS GO OUT TO ALL OF YOU WHO HAVE EXPERIENCED A LOSS IN THIS TERRIBLE CATASTROPHE.

AS MANY OF YOU MAY KNOW, MOST OF US AT STANDARD MORTGAGE ARE RESIDENTS OF THE GREATER NEW ORLEANS AREA AND WE PERSONALLY KNOW AND FEEL YOUR PAIN AND LOSS.

WE PRAY THAT ALL OF YOU AND YOUR LOVED ONES ARE SAFE AND SECURE WHEREVER YOU MAY BE.

If the message had ended there it would have been a nice gesture. However the message goes on to say...

WE ASK THAT ALL PAYMENTS BE SENT TO US, AS YOU WOULD NORMALLY DO, TO THE FOLLOWING ADDRESS:

STANDARD MORTGAGE CORPORATION
P.O. BOX 53426
NEW ORLEANS , LA 70153-3426

Do they really think that people who have just lost their homes and everything in them will be worrying about paying their mortage bills? Not only that, don't they realise that there's no postal service in their area.

Day 7 - 8/29/05, Costliest Storm for Insurers?

NEW YORK (CNN/Money) - Hurricane Katrina may cost the insurance industry between $12 billion to $25 billion, according to risk modeling firm Eqecat.

The Oakland, Calif.-based company previously estimated that the hurricane, which slammed into Louisiana early Monday, would have cost the industry between $15 billion and $30 billion.

Even with the revision, Hurricane Katrina could still end up as the costliest storm ever for U.S. insurers. Hurricane Andrew previously held that distinction, causing $15.5 billion in insured damage.

"The reduction was based off the fact that winds were lower than expected and the track of the storm is 25 miles to the east of the expected track last night," said Tom Larsen, senior vice president of Eqecat. "That puts New Orleans onto the lean side of the hurricane."

He said storm surge is still expected to jump as much as 28 feet in areas. About 70 percent of New Orleans is below sea level and is protected from the Mississippi River by a series of levees.

The firm added that its estimates don't include any potential damage to oil rigs in the Gulf of Mexico.

Larsen said in 2004, Hurricane Ivan cost the insurance industry about $2 billion in damages to oil rigs. But Katrina's trajectory places the storm in an area with even more oil platforms with higher winds, increasing insurers' risk of exposure.

As of 9 a.m. ET Monday, the storm was centered about 40 miles southeast of New Orleans, Louisiana, and 65 miles southwest of Biloxi, Mississippi.

Again, help the Red Cross help others. Give generously. Thanks!