The Insurance Bomb AwardAfter watching the Oscars, I got to thinking: what if there was an award for insurance company "performances"? What would it be for? Who would get one?
In the wake of our post-Oscar hangover, let me start the trend with the first annual "Insurance Bomb" award, going to the insurer who in our humble opinion most deserves a well-placed kick in the butt. The prestigious IB award will surely the grace the mantles and toilet tanks of insurers continent wide.
This year's winner has to be State Farm. After losing a round of legal battles over denied Katrina claims, State Farm's mood has turned to sour grapes. In an astounding switch, State Farm has decided not to write new homeowners insurance policies in Mississippi!
Keep in mind that State Farm is the third largest insurer in Mississippi. So this isn't just a small pout, folks; this is a big one. Also, homeowners insurance is the bread and butter of many an insurance company, so you can't need business too badly if you are willing to walk away from new homeowners policies.
Just so you don't go feeling bad for State Farm, I should add that they made a substantial profit in 2005, despite Katrina claims.
In the runner up category, we have Hartford insurance who is in the process of actually cancelling 38,000 policies Florida. Not content to simply stop adding new business, Hartford is giving the whole process of getting out of Florida a big push. Of course, there is that little detail for the customer where if a policy is cancelled, it can be hard to get another policy. Other insurers consider a cancelled policy a bad sign. That's no skin off Hartford's nose of course.
I guess it's no fun to be an insurance company if people actually expect you to pay claims.
What next? Will we see NFIP trying to get out of flood coverage? Will FEMA change the qualifications for a disaster to reduce risk?
Well, probably not. These are government organizations after all.
But there must be other Insurance Bomb winners out there. If you have a smooth move that you'd like to nominate for an IB, let me know! I'd hate to miss mentioning anyone.
Monique L. Attinger