Insurers Shifting Catastrophe Costs to Consumers

Insurers Shifting Catastrophe Costs to Consumers

Consumers in 11 states hardest hit by weather catastrophes in 2011 should brace themselves for homeowners insurance rate increases amounting to nearly $100 on every $500 in coverage.

Not that the hikes are necessary.

In a recent study, the Consumer Federation of America (CFA) says insurers are more and more often shifting the cost of weather catastrophes onto homeowners as they “significantly and methodically” decrease their financial responsibility for weather catastrophes like hurricanes, tornadoes and floods.

The scathing study says “the insurance industry has moved from its historic role as a calculated risk-taker to one of a risk-avoider, exposing consumers and taxpayers to much higher costs.”

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Insurance companies raising rates for homeowners insurance

Insurance companies raising rates for homeowners insurance

Allstate, Travelers and State Farm are among insurers raising homeowners’ rates after damage from natural disasters defied industry projections…

…Near-record-low interest rates cut insurers’ investment income, and tornadoes, wildfires and Hurricane Irene increased claims costs in the United States last year. The industry averaged annual underwriting losses on homeowners policies in the decade ended in 2010, according to data compiled by the National Association of Insurance Commissioners (NAIC).

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Mortgage-financing benefit vanishes

Mortgage-financing benefit vanishes

Though its demise drew little attention because of the partisan year-end brawl over the payroll tax-cut extension in Congress, a key mortgage-financing benefit disappeared at the end of December: The ability of large numbers of homebuyers and owners to write off the premiums they pay for mortgage insurance.

The loss of that tax deduction — plus mandatory new fees imposed by Congress on all new conventional and FHA loans — could effectively ratchet up the costs of homeownership this year.

The expiration of mortgage-insurance deductibility will hit many low down payment conventional loans originated since 2007, plus virtually all new mortgages closed this year where the down payment is less than 20 percent.

Read More on The Seattle Times…

Living in a slide zone

Living in a slide zone

Heavy rain in the hilly Puget Sound region often means landslides.

Sometimes they are merely inconvenient, such as the April 12 slide that blocked Highway 4 near Longview or March slides that blocked the railroad tracks between Seattle and Everett. Sometimes they are a tragedy, such as the Perkins Lane slide in the Magnolia neighborhood about 14 years ago that sent several houses tumbling toward the beach.

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