Tuesday, November 25, 2008

Farmers Insurance Increases Homeowner Rates In California

California Insurance Commissioner Steve Poizner has allowed two of California’s largest home insurers –State Farm and Farmers – to increase premiums by a combined $115 million. State Farm customers will soon face an average 6.9% hike and Farmers policyholders’ rates will climb 4.1%, according to recent decisions by the Commissioner. In both cases, the nonprofit Consumer Watchdog had formally challenged the rates and petitioned Poizner to hold hearings pursuant to Proposition 103, but the commissioner rejected those requests.

In an economy like this, Californians are relying on the insurance commissioner to keep premiums as low as possible, but Commissioner Poizner refused to hold a hearing to investigate rate hikes that will affect more than 2.5 million homeowners. We reviewed the proposed rate increases and concluded that they were unjustified. The commissioner should not have allowed these insurers to jack up prices like this.

At least $20 million of the increase for State Farm was allowed as an exception to Proposition 103’s strict limit on excessive insurer expenses in order to let the insurance giant charge customers for “higher quality of [customer] service.” Included in Farmers’ rate hike was a special exception to the expense limit for millions of dollars allegedly spent on the company’s fraud prevention efforts. According to our review, the company did not meet the standard required to pass those costs on to policyholders.

We’ve noted that both State Farm and Farmers are financially well-positioned to pay claims resulting from the recent Southern California wildfires and do not need premium increases to address those losses. We intend to challenge the Commissioner’s decision allowing Farmers’ rate hike and is reviewing the propriety of the State Farm increase.

If the rates take effect, policyholders with State Farm will see an average increase of about $60 per year and Farmers customers will pay about $30 more on average.

With sinking economy, insurers turn to rate hikes

Insurance company profits are tied to their investment income and when the economy weakens companies try to push premiums higher in order to maintain high profits. We are concerned that other insurers will press the Department of Insurance for more rate hikes as their investment portfolios tank. As evidence, consider Allstate, which was forced to lower its California homeowners’ insurance rates by about $250 million last spring. Allstate requested a 6.9% rate hike increase for homeowners in September. That proposal is still under review by the Department of Insurance.

While everyone is feeling the sting of a bad economy, insurance companies want to pass the pain on to homeowners and other policyholders.
The insurance commissioner stands between these companies and our wallets and Californians need him to be there.

California’s insurance reform law, Proposition 103, requires insurance companies to open their books and submit to public hearings to prove their rates are adequate without being excessive. Members of the public can challenge rate hike proposals, and the commissioner must grant a hearing if the requested change exceeds 7%. It is left to the commissioner’s discretion whether or not to initiate a full hearing for changes less than 7%, as was the case in the State Farm and Farmers matters.

In recent years, Consumer Watchdog has successfully challenged several insurance rate proposals, resulting in more than a billion dollars in savings for California policyholders.

Consumer Watchdog is a non-profit, non-partisan public interest group. In addition to being their Executive Director, Doug Heller is Consumer Watchdog’s lead legislative and regulatory advocate on insurance and energy issues. Heller spearheaded the two-year battle for the nation's strongest whistleblower protections, which are now California law.

Source: californiaprogressreport.com

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Wednesday, November 19, 2008

Farmers Insurance Ranks Below Industry Average for Homeowners Insurance Satisfaction

According to J.D. Power and Associates 2008 Homeowners Insurance Study, Farmers Insurance ranked below the Industry Average in Customer Satisfaction.

The 2008 Homeowners Insurance Study is based on responses from more than 12,900 homeowners insurance policyholders. The study was fielded in May and June 2008.

The 2008 Homeowners Insurance Study is based on responses from more than 12,900 homeowners insurance policyholders. The study was fielded in May and June 2008.

For details see: J.D. Power and Associates 2008 Homeowners Insurance Study

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Farmers Insurance Ranks Below Industry Average for Auto Claims Satisfaction

According to J.D. Power and Associates 2008 Auto Claims Satisfaction Study, Farmers Insurance ranked below the Industry Average in Customer Satisfaction.

The 2008 Auto Claims Satisfaction Study is based on 11,671 responses from auto insurance customers who filed a claim within the past 12 months. The study excludes customers who only had glass/windshield, theft/stolen vehicle, roadside assistance or bodily injury claims. The study was fielded from July to August 2008.

The study finds that implementing 10 specific service practices has a considerable impact on overall satisfaction
with the claims process. They are:
• Answering all customer questions
• Managing expectations regarding the settlement
• Expressing genuine concern
• Avoiding negotiated settlements
• Providing flexible appraisal appointments
• Returning phone calls
• Sharing information between representatives
• Providing proactive updates
• Ensuring customer is at ease with claims process
• Giving customers a time line and meeting it

For details see: J.D. Power and Associates 2008 Auto Claims Satisfaction Study

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Farmers Insurance to Raise Rates 9.9%

Thousands of Farmers home insurance policyholders will see their rates climb an average 9.9 percent in February.

Farmers needed the hike to cover rising labor and materials costs, said spokeswoman Michelle Levy.

The new rates don’t account for losses related to Ike, she said.

“This rate action has been in the works for months, long before hurricanes Dolly and Ike, as part of our annual review of rates,” she said.

Levy declined to disclose the number of Ike-related claims the company has received so far or how much Farmers expects to pay out on them.

The company, which sells home insurance through its Texas companies Farmers Insurance Exchange, Fire Insurance Exchange and Texas Farmers Insurance Co., notified state regulators of the bump in rates earlier this week.

“We are reviewing it right now,” said Jerry Hagins, a spokesman for the Texas Department of Insurance. “It doesn’t go into effect until February 16th, so that’s a good amount of time for us to review them.”

Farmers has 760,000 home policyholders in Texas. But only half — those under its “HOA” policies — will see a rate increase, Levy said.

Customers with Texas Farmers Insurance Co., which sells the “Texas Family Home Policy,” will not be affected by this increase.

Those customers saw their rates jump an average 7.9 percent in May.

In a move to compete in the condominium market, Farmers will cut rates an average 10 percent for condo policies, Levy said.

Farmers is the second company to raise rates in Texas following Hurricane Ike.

USAA told state regulators last month that it will raise Texas home insurance rates an average of 7.9 percent because of growing construction costs and the increase in the frequency of catastrophic weather. In Harris County, the average increase was 20.9 percent.

Source: chron.com

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Insurance Industry Exposed - Tricks Of The Trade

In this, its fourth report on the multi-trillion dollar insurance industry, the American Association for Justice (AAJ), an association of trial attorneys, is making no friends with the insurance industry.

Entitled, "Tricks of the Trade: How Insurance Companies Deny, Delay, Confuse and Refuse," the new report describes some of the most egregious ways the insurance industry puts profits over people. This, despite the fact that the industry makes about $30 billion in profits a year and pays its CEO more than any other industry.

How is the consumer hurt?

AAJ researchers studied thousands of claims and news reports spanning a decade across the country.

Last July, “The Ten Worst Insurance Companies in America,” named Allstate Insurance at the top of a list of insurance companies that employ tactics to reduce payments to customers.

In both 2006 and 2007, “A Pattern of Greed” reports also criticize the insurance industry.

In “Tricks of the Trade” AAJ found a similar pattern including:

Denying Claims - While the big insurers such as State Farm, AIG and Allstate deny claims to consumers, they reward employees who deny the claims. Employees who do not agree are dismissed. AAJ says “When all else failed, [the companies] engaged in outright fraud to avoid paying claims.”
Example – 60-year-old Ethel Adams of Seattle had a $2 million policy with a subsidiary of Farmers. The company denied her auto accident claim, saying that the driver of the car who caused the accident was acting deliberately in a moment of “road rage”.

Delay Until Death – As many claimants are in ill health and are elderly, to delay is often to deny. AAJ says that insurance companies have locked paperwork up indefinitely. A claimant will either give up, or die.
Example – Some of the most “shameful” delays of coverage are in the area of long-term care, the report says. The case of 77-year old Mary Rose Derks from Montana is one example. Her family sold their small business after Conseco denied the claim for more than four years.

Employees at Conseco have testified deliberately mailing the wrong forms and then denying claims based on incorrect paperwork.

Discriminate by Credit Score - It’s not commonly known that insurance companies will use a credit score to determine if you should receive insurance at all. People with little credit, such as the poor and senior citizens, or people who pay with cash, are disproportionately discriminated against under this policy.
Example - When Kathryn Perry, a Wimberley, Texas nurse fell behind on her bills after her daughter was murdered, her credit score suffered. The insurance company raised her auto insurance rate nearly 500 percent. Her yearly premium went from $437 to $3,000. “They are victimizing the victims,” Perry told lawmakers before the Texas House of Representatives.”

Canceling on the Sick – Some policies have been canceled retroactively or rescinded when someone is sick and their condition makes treatment expensive. Often employees who meet the “cancellation goals” are offered bonuses.
Example - Patsy Bates, a 51-year old hair dresser from California was suddenly without insurance after Health Net, Inc rescinded it in the middle of breast cancer treatment. Health Net said her application information wasn’t correct. A sales rep had filled out the paperwork while she styled someone’s hair. Bates had to stop chemotherapy until she could find a charity to help pay for it.

Last February, Bates won a $9.4 million judgment against HealthNet after it canceled her policy during chemotherapy treatment.

Following the negative publicity that surrounded her case, California health insurers were told to reinstate the health policies of 26 people who were thrown off the roster for coverage after the insurer claimed they lied.

Canceling for a Call – Need to ask a question of your insurer? You might rethink that. AAJ finds that the insured can have their policies canceled if they even inquire about making a claim.
Some insurers consider inquiries the same as filing a claim and have dropped customers.

Earlier this year, the Consumer Federation of America (CFA) came to the very same conclusions about the insurance industry as AAJ. The group was joined by several state and national consumer organizations in issuing its report and finding that during a three-year period, from 2004 to 2007, the industry recorded profits at more than $253 billion.

The South Carolina State Supreme Court sums it up best. “Insurers generally are attempting to convince the customer when selling the policy that everything is covered and convince the court when a claim is made that nothing is covered.”

So What Can You Do?

Reading your policy carefully is a good start. Know what is covered and what is not.

Know how to appeal a denial from your insurer.

When filling out any insurance form, make sure all of the information is correct. An error might serve as a basis to cancel the policy.

If you get a check back after being canceled, do not cash it. That might send the message that you have accepted their offer.

Everything should be put in writing including the name of the company representative and what they told you. Keep records of all correspondence and bills.

Do not give up, AAJ recommends.

And when you hit a brick wall, contact your state insurance department. While they will not represent you in a private matter (only an attorney can, or you can represent yourself), they may still help you. #

Source: injuryboard.com

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Paul Hopkins Named Chairman of Farmers Group, Inc.; Bob Woudstra Named Farmers Group, Inc. CEO

LOS ANGELES, Nov 18, 2008 /PRNewswire via COMTEX/ -- Paul Hopkins, Chief Executive Officer (CEO) of Farmers Group, Inc., a Los Angeles-based subsidiary of Zurich Financial Services Group (Zurich), has been promoted to Chairman of the Board of Farmers Group, Inc. In addition, Mr. Hopkins will assume responsibilities overseeing Zurich's Latin America operations.
Bob Woudstra, who currently is President and Chief Operating Officer for Farmers Group, Inc., has been named to succeed Mr. Hopkins as Farmers Group, Inc. CEO.
Mr. Hopkins, who joined Farmers in 1978 as a Farmers agent and subsequently became a Farmers employee where he held positions of increasing responsibility in the sales and marketing areas, credited the company's success during his tenure as CEO to its agents, district managers and employees.
"Farmers' success has been a true team effort and I would like to thank members of our leadership team; our entire employee and agency force; and the men and women who have served on our Boards for their passion, enthusiasm and support," Mr. Hopkins added.
Mr. Hopkins was quick to praise Bob Woudstra, his successor as Farmers Group, Inc. CEO, for his leadership role in the company's recent growth and success.
"Bob Woudstra is an experienced and talented leader with 35 years of service to Farmers and to Foremost Insurance Co., making him uniquely qualified to take charge of this great organization. Bob has made crucial and substantial contributions to Farmers' strong performance. I am confident this is the beginning of even greater things for Farmers," Mr. Hopkins said. "Bob will continue the momentum and add his own visionary imprint as he leads Farmers into the future."
Farmers Group, Inc. is a wholly owned subsidiary of Zurich Financial Services, an insurance-based financial services provider with a global network of subsidiaries and offices in North America and Europe as well as in Asia Pacific, Latin America and other markets. Farmers(R) is the nation's third- largest Personal Lines Property & Casualty insurance group. Property and casualty products are underwritten and issued by the Farmers Exchanges and their subsidiaries, which Farmers Group, Inc. manages but does not own. Headquartered in Los Angeles, Farmers provides homeowners, auto, business, specialty products, life insurance and financial services to more than 10 million households. For more information about Farmers, visit our Web site at http://www.farmers.com.
Paul N. Hopkins is a member of the Group Management Board of Zurich Financial Services (Zurich) and President U.S. Personal Business. He joined the Farmers organization in 1978 as an agent and subsequently became a Farmers employee, where he held positions of increasing responsibility in the sales and marketing area.
In 1992 he transferred to the Los Angeles Regional Office as Assistant Vice President, Regional Operations. He became Vice President, Agencies in 1995, and Senior Vice President, Agencies two years later. Hopkins was assigned as Senior Vice President and Chief Marketing Officer in 1998, a position he held until January 1, 2000, when he was appointed Senior Vice President of State Operations. His next assignment, as Senior Vice President of Strategic Alliances, became effective April 2001. In August 2002, he was promoted to Executive Vice President, Market Management, and two years later became President of Farmers Group, Inc.
Hopkins was appointed a member of Zurich's Group Management Board in December 2004. Since April 2005, he has been Chief Executive Officer (C.E.O.) of Farmers Group, Inc. and a member of Zurich's Group Executive Committee (GEC). He also serves on the Board of Farmers Group, Inc. and is Chairman of the Board of Farmers New World Life Insurance Company. In 2006, Hopkins was named Chairman of the Board of ZFUS Services, LLC, Zurich's North American shared services platform.
F. Robert (Bob) Woudstra joined Foremost Corporation of America in 1973 as Controller.
In his tenure with the corporation, Woudstra has held several positions. In February 1999 he was promoted to Chief Operating Officer of Foremost, which position he held at the time Foremost was acquired by Farmers in March 2000.
Effective March 2000, Woudstra was elected a Vice President of Farmers Group, Inc., and Chief Operating Officer of Farmers Specialty. Effective March 1, 2003, he was elevated to Senior Vice President of Farmers Group, Inc., and President of Farmers Specialty. In April 2005, Woudstra was promoted to Executive Vice President of Property and Casualty Operations and relocated to Los Angeles.
Effective May 1, 2007, he was appointed to the position of President and Chief Operating Officer.
SOURCE Farmers Group, Inc.

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Tuesday, November 18, 2008

Victims of Road Rage becomes Victim of Insurance Company

Ethel Adams, a 60-year-old woman from Seattle, suffered a nightmare scenario in 2004. Her car was hit by a truck that managed to cross the centerline from the other direction. She sustained broken bones, collapsed lungs, and had to spend the following months in intensive care. Ethel thought that the $2 million policy that she purchased from a subsidiary of Farmers Insurance would cover her devastating injuries. However, the company denied her claim. The company informed her that she was the victim of road rage and not an accident, and thus She would be responsible for all of the medical costs arising from the horrifying event. Farmers Insurance had a history of denying claims in order to improve its bottom line. Farmers even ran an employee incentive program, "Quest for Gold," that offered various incentives.

This sort of practice is not limited to Farmers Insurance. Some of the other insurance company giants, such as Allstate, are known to aggressively fight claims in order to help their bottom lines. Allstate rewards employees who deny claims with items which include portable refrigerators..

Ethel Adams eventually received help paying her medical bills after Farmers’ denial of her claim sparked an outcry and the state insurance commissioner intervened. However, other victims of insurance companies have no such luck with their valid claims.

Source: injuryboard.com

Also see Farmers Insurance Victim Ethel Adams

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