Wednesday, May 28, 2008

Oregon Collision Shops Rate Farmers Insurance Among the Worst

"Collision repair shops on a daily basis see how various insurance companies take care of Oregon drivers after an accident, so we felt it was worthwhile to ask how they rate the various insurers," said Barbara Crest, executive director for the Northwest Automotive Trades Association (NATA), which conducted the survey of Oregon shops. "We believe their views will be helpful to insurance companies and consumers."

About 650 collision repair shops throughout the state received the survey, which asked them to grade the top 22 auto insurers in the state in terms of how well each company's "policies, attitude and payment practices ensure quality repairs and customer service for Oregon motorists."

Farmers Insurance received below-average overall grades of D+ or lower.

"Collision repairers say the insurers receiving the highest grades, which includes both larger and smaller insurance companies - do the best job of taking care of Oregon drivers after an accident," Crest said. "We hope consumers will take these ratings into account when choosing an auto insurer, and that insurers that received lower grades will work to improve their performance."


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Tuesday, May 27, 2008

Farmers Insurance Seeks Rate Increase in California

Rate increases sought for homeowners insurance
California's three biggest issuers want hikes as high as 9.3%. Insurance chief Steve Poizner's response could affect his political future.

By Marc Lifsher, Los Angeles Times Staff Writer
May 27, 2008

After dropping in recent years, the cost of insuring your home may be about to climb.

California's three biggest insurers, covering more than half of insured homes, have requests for rate hikes pending with Insurance Commissioner Steve Poizner.

How Poizner handles the proposed increases could affect his political future. As the only Republican statewide officeholder, he is being touted as his party's best candidate for governor in 2010.

The wealthy Silicon Valley entrepreneur turned consumer advocate may not want to run on a record of raising insurance premiums paid by millions of homeowners and renters.

"It's going to be very tough for him," said Amy Bach, director of United Policyholders, a national insurance consumer advocacy group. "It's going to hurt him if he approves new rates, and consumers publicize that and are critical of him."

Poizner doesn't fear repercussions from doing whatever he thinks is right, said California Department of Insurance spokesman Darrel Ng. "He is confident that should he decide to run for future political office, his good policies will be good for him politically," Ng said.

Third-ranked Allstate Corp. is seeking a rate increase of 9.3%. Industry leader State Farm General Insurance Co. and No. 2 Farmers Group Inc. are asking for a 6.9% hike.

All three companies have earned solid profits in recent years. In general, insurers say that they need more revenue from customers to cover a jump in the severity of individual claims and inflationary pressures on the cost of rebuilding homes damaged by fires and high winds -- although they didn't offer more detailed explanations for their rate increase requests.

"There's been an increase in materials for rebuilding and remodeling, and labor costs have gone up," said Jerry Davies, a spokesman for Farmers, a unit of Zurich Financial Services.

State Farm spokesman Bill Sirola acknowledges that his company "made significant profits in California between 2003 and 2007" and stresses that "those good times allow us to rebuild the capital we need for the bad times" that are sure to come.

Allstate, which recently limited its potential losses by refusing to take on new residential customers in California, contends that higher rates would enable it to increase its financial reserves so that the company could be prepared for future disasters, such as wildfires or earthquakes.

Consumer advocates counter that California insurers have little basis for raising rates. According to the Department of Insurance, insurers of residential properties paid 71 cents in claims for every $1 in policyholders' premiums last year. Most financial losses had more to do with weak performance of insurer investment portfolios related to the sub-prime mortgage meltdown, consumer groups say.

"Insurance companies are doing badly in the stock market, and they are trying to recoup their losses from policyholders' pocketbooks," said Harvey Rosenfield, the consumer attorney who wrote Proposition 103, an initiative approved by California voters in 1988 that increased government regulation of insurance rates.

Poizner is reviewing all three filings. Last May, however, he hinted he might reject Allstate's proposal and possibly order it to rebate customers should any charges be deemed excessive.

The Allstate filing, the subject of a hearing before a Department of Insurance administrative law judge, was submitted close to the end of former Insurance Commissioner John Garamendi's tenure in 2006.

Garamendi, a Democrat now serving as lieutenant governor, at the time had ordered Allstate, State Farm, Farmers and Safeco Corp. to cut rates because their customers had been filing fewer and less costly claims.

State Farm and Safeco subsequently lowered their premiums by 20% and Farmers reduced its rate by 18%. Only Allstate fought Garamendi, and later, Poizner, by seeking a substantial rate increase.

Sirola, the State Farm spokesman, welcomed the 2006 price cuts and boasted that lower rates would make the company more competitive, especially with Allstate.

But now State Farm and Farmers have changed their tune.

"We see an increase in the cost of claims," Sirola said. "We've tracked these trends over a number of years."

Allstate, meanwhile, said it felt vindicated by its chief competitors' asking Poizner for rate increases.

"It seems to show that this is an issue affecting the industry across the board," company spokesman Peter DeMarco said.

Some consumer activists, who applauded Poizner's tough stand with Allstate, say they're worried the insurance commissioner may be warming to companies' petitions to raise rates. As evidence, they point to new regulations issued last month by Poizner that critics claim were hastily considered and make it easier for companies to win approval for future rate increase requests.

Companies "see an opportunity to make more money from Commissioner Poizner," Rosenfield said. "I think they see a better chance of soaking the policyholder under Poizner than under Garamendi."

As California's insurance regulator, Poizner does not want to prejudge any company's legal filings, said Ng, the state insurance department spokesman.

He says Poizner is committed to approving rates that are fair to insurers and consumers.

"Just because companies ask for an increase doesn't mean it will be granted," Ng said.


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Sunday, May 25, 2008

Farmers Insurance Asks For Biggest Rate Increase in Kansas

Auto, home insurance premiums on the rise


Auto and homeowners insurance premiums are rising in Kansas, with several of the biggest companies asking for -- and getting -- rate increases since the first of the year.

The Eagle on Friday obtained rate revisions granted by the Kansas Insurance Department since Jan. 1. The filings show that among insurance companies that filed for rate changes, most increased premiums.

The average rate increase granted to auto insurance companies was 6.1 percent. The average increase granted for homeowner insurers was 7.5 percent.

On the homeowner side, Farmers Insurance Co. asked for the biggest increase, an average 14.1 percent, which took effect May 16.

The reason for the rate increase is simple, said Farmers spokesman Jerry Davies.

"Overall, we've seen a rise in claims and a rise in claim costs," he said. "With the economy today, the cost to rebuild" and make repairs is higher.

Farmers is the third-largest homeowners insurance company in the state.

Farmers received a 3 percent average rate increase for auto insurance Jan. 1, and a 4.7 percent average increase will take effect July 1. On the auto side, the biggest increase was for Allstate Fire and Casualty, whose 14 percent average increase will take effect June 2. Allstate Property and Casualty was granted an 11.2 percent average increase effective the same day.

Allstate is the ninth largest company for auto insurance in Kansas.

Allstate Indemnity Co. and Allstate Property and Casualty Insurance each raised homeowner premiums an average 12.7 percent on May 19.

"Homeowners and auto insurance rates in Kansas appear to be trending up, but companies believe their increases are necessary to maintain their financial stability so they can continue to offer products in our state," said Bob Hanson, a spokesman for the Kansas Insurance Department.

To be considered for a rate increase, companies must submit five years' worth of premium and loss data that justify raising premiums. Companies can ask for a rate adjustment at any time, but increases are not automatic.

"We want to make sure we have the ability to take care of our customers," said Christina Loznicka of Allstate.

Reach Deb Gruver at 316-268-6400 or


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Thursday, May 22, 2008

Farmers Insurance Policy Didn't Cover Groundwater and Mudslide Damage

Are You Covered?: Insurance for Storms

A warning to all homeowners: with the start of hurricane season and summer storms it's time to think about your insurance and what it may or may not cover if something happens to your home.

We all think it will never happen to us. But when it does, we realize it's too late to do anything about it. For one local woman, the damage in done. But as she works to pick up the pieces she hopes her story will encourage others to think "what if that were me."

"I felt my bedroom shake and tremble," remembered Mary Gordon Hall. The storm that hit Charlottesville earlier this month caused major damage to her Batesville home.

She continued, "There were cinder blocks mud deep, and there was no wall. The wall had been blown out."

Water pressure that had built up behind a wall in the basement became too much. Gordon said, "Everybody's faces were always 'whoa.' I could tell by the walk around and the things they said and the way they reacted to my house that this was pretty serious"

Structural engineers have determined house is unsafe to live in. Gordon has been staying with a friend for the past two weeks and it's unclear if she'll ever be able to move back home.

Gordon filed a claim with Farmers Insurance. Turns out, she isn't alone. Farmers Insurances' Rico Metzroth shared, "Just in those few days, May 8th, 9th and 10th, we had slightly over a 100 needs. So we were here meeting with our customers."

Investigators determined she's dealing with groundwater and mudslide damage. Nothing is covered. An earthquake policy would have been the only thing that could have helped.

"The typical consumer would not think of buying that type of policy. They would not even think of earth movement as being part of that policy," stated Metzroth.

For things to get back to normal, land must be moved, the basement will be demolished and a wall re-constructed. That work is estimated to cost $30,000 to $40,000.

"You know it's one step at a time," said Gordon. "I just have to wait and see. Hopefully, I'd feel safe when it's all fixed."

Gordon says the one positive thing that's come out of this ordeal is the community support. She told us everyone from the school where she works and her friends have been unbelievable. She also said they're all checking their policies as well.

We know there is a lot to this issue and the details can get tricky. We have additional information here in a Word document that can help answer any further questions.

Reported by Jenn McDaniel

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Accidental Fire, Farmers Insurance bills fire victims $420,000

By Tracy Vedder

UNIVERSITY PLACE, Wash. -- First a devastating fire robbed a local family of nearly everything. Then a big insurance company tried to take the rest and more, hitting the family with a bill of $420,000.

Last October Chris Christoffersen and her daughter Melissa awoke to devastation. The apartment complex they lived in was engulfed in flames.

"I watched everything from throughout my life - gone. Gone in just a few seconds," she said.

Now their furniture, TV, computer and even their clothes consist of second-hand donations.

Things were looking up until the family got a phone call from Farmers Insurance, which insures the apartment complex.

Farmers wanted $350,000 to repair the four units damaged in the fire.

"(I thought) I just lost everything in a fire five months ago and you want $350,000 from me?" Christoffersen said.

The University Place Fire Department ruled the fire accidental. The fire had it started in the area where Christoffersen's couch was pushed against the baseboard heater.

"These things happen, they're accidental. It's just the way it is and there was no malicious intent discovered at all," said Asst. Fire Chief Dave Dupille.

Then Christoffersen got her first and only bill from a collections agency demanding that she pay $420,000.

She was obviously shocked, but neither the apartment management company nor the fire department has ever heard of an insurance company going after a tenant to pay for an accidental fire.

"It's not a reasonable thing that I've ever heard of, no," said Dupille.

The Problem Solvers contacted Farmers for an explanation. Two days later Farmers decided that "after consulting with our claims department... (we've) chosen not to pursue the matter."

"Relief! I'm just absolutely relieved that that's just done," said Christoffersen.

Now the family can concentrate on getting their lives back to normal.

The state insurance commissioner told the Problem Solvers that Washington courts have ruled that insurance companies cannot hold tenants responsible for fire damages unless it's expressly written in the lease.

Watch the Video at KOMOTV

Friday, May 09, 2008

Oregon Farmers Insurance Lawsuit Overturned

In another ruling involving health care providers, the Supreme Court overturned the dismissal of a lawsuit against Farmers Insurance Co. for denying medical payments.

In a dispute over medical payments for traffic accident claims, the Supreme Court overturned the Oregon Court of Appeals and sent a lawsuit against Farmers Insurance Co. back to Multnomah County Circuit Judge Jean Kerr Maurer.

Five customers with automobile insurance policies sued Farmers, claiming it wrongly denied their medical costs resulting from traffic accidents because Farmers used a computerized review system instead of conducting an individual medical examination.

The court ruled that when a health care provider submits a claim for medical expenses it is presumed to be reasonable and necessary, and it is up to the insurance company to prove otherwise.

The court said the Legislature prohibited insurers from denying payment of claims without conducting a "reasonable investigation" of those claims, and the computerized review did not meet that requirement.

Justice Thomas Balmer noted in a separate opinion that the claim was part of a class-action effort to challenge similar practices by large insurance companies across the country.

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