April 5th, 2007 9:49 AM by Ron Mastrodonato
Nationwide given OK to raise rates 54 percent TALLAHASSEE, Fla. – April 2, 2007 – Nationwide Insurance Co. can increase its statewide average homeowners insurance rates by 54 percent, according to an arbitration panel. The ruling, announced by state regulators Friday, comes after Nationwide’s request for a 71.4 percent statewide average hike was deemed unjustified, and turned down by the state last fall. The 54 percent rate increase will result in rates that are “not excessive, inadequate or unfairly discriminatory,” the arbitration panel noted.
“The approval of this rate helps us – to continue to maintain financial stability,” Nationwide spokesman Eric Hardgrove said. “[The rate increase] allows us to build a surplus and be prepared to pay future claims.” Nationwide has more than 232,000 policies statewide, including nearly 16,000 on the First Coast, according to the Florida Office of Insurance Regulation. The 54 percent rate hike is not justified, OIR spokesman Bob Lotane said.
“The data that [Nationwide] provided to us, “ he said, “didn’t justify [a] 71 percent [increase], and it didn’t justify what they ultimately got from the arbitrator.” When asked how much of a rate increase was justified, Lotane responded: “We never gave [Nationwide] a number, and I was never told a number.” Despite the proposed 54 percent hike, Nationwide policyholders will likely end up facing a smaller rate increase.
The company, earlier this month, filed for a 4.5 percent statewide average rate decrease because of legislation signed into law earlier this year. Insurance carriers can now purchase less expensive reinsurance from the state, if they pass on the savings to policyholders through lower premiums.
The majority of Nationwide’s 71.4 percent proposed rate increase would have covered rising reinsurance costs and the rising costs of building materials and labor, the company said last year. Insurers buy reinsurance to help offset the cost of paying claims after a major storm or other catastrophe.
The OIR, in a statement in October, said it didn’t find “sufficient support in the filing to justify the request.” Insurers have the right to take their rate hike requests to an arbitration panel if regulators turn them down.
Copyright © 2007 The Florida Times-Union, Jacksonville, Urvaksh Karkaria. Distributed by McClatchy-Tribune Business News.
Study: U.S. prices return to normalWASHINGTON – April 2, 2007 – “A market returning to normal” is the way Global Insight, a privately held global information company, describes the current housing market, based on the most recent U.S. Housing Valuation Analysis.
The Housing Valuation Analysis – a joint effort by Global Insight and National City Corp. – examines the top 317 U.S. real estate markets using data from the Office of Federal Housing Enterprise Oversight (OFHEO). Taking into consideration differences in population density, household incomes and interest rates, the analysis determines what home prices should be and how much current prices deviate from that norm.
A closer look
“Nearly all markets posted a decline in the level of overvaluation, which signals that the overall housing market is beginning to trend back to more normal price growth,” says Jeannine Cataldi, senior economist and manager of Global Insights Real Estate Service.
The number of markets identified as overvalued decreased to 57 from 60 metro markets in the fourth quarter of 2006. Texas had the highest concentration of undervalued markets with Dallas and College Station-Bryan tying for lowest in the nation.
Although the greatest incidence of overvaluation remains in pockets along the Atlantic and Pacific coasts, corrections are under way in some markets as prices and appreciation rates decline. Approximately 15 percent of the nation’s single-family housing stock experienced price declines in the fourth quarter.
The report finds that New England no longer appears to be “significantly overvalued,” while Orange County, Calif., Tucson, Ariz., Reno and Carson City, N.V., and Kingston, N.Y., fell below the “threshold denoting extreme overvaluation.” Even though these markets are still considered “significantly overvalued,” the report points out that slowing rates of appreciation reflect “a gradual movement toward historical price trends.”
Nationally, according to OFHEO data, prices advanced by 1.8 percent – metrics the report says are more upbeat than those reported by the Commerce Department, which showed an increase of 1.6 percent in median transaction prices. It’s also more than the National Association of Realtors (NAR), which showed a decrease in median prices of 2.8 percent. “Median transaction prices tend to overstate price strength during buoyant markets and understate price strength during soft markets,” according to the OFHEO.
Source: Camilla McLaughlin for REALTOR® Magazine Online© 2007 FLORIDA ASSOCIATION OF REALTORS®
Fed bill would make insurance policies understandableWASHINGTON – April 2, 2007 – Sen. Trent Lott this week renewed his efforts to make homeowners’ insurance more understandable.
Lott, R-Miss., introduced the Homeowners’ Insurance Noncoverage Disclosure Act, which would require insurance companies to list specifically what is not covered by the policy on the front page of the policy in simple language and large type.
The bill is similar to one Lott introduced last year, said Lee Youngblood, Lott’s spokesman. Many attempts to extend federal regulations to the insurance industry, which is largely regulated by the states, have failed in the past.
The goal of the bill is not to eliminate complex language in insurance, Youngblood said. It only seeks to put a clearer explanation of the small print in an easily accessible place for consumers.
“Legalese is part of our daily lives, especially when you’re talking about insurance, which is a contract,” Youngblood said. “But insurance is more than a contract. It’s a product purchased by consumers.”
He added, “This is something Sen. Lott believes is very simple, very easy to do that could save a lot of heartache, legal disputes, time and anguish of trying to understand the policy.”
The bill would require the Federal Trade Commission to enforce the disclosure by expanding the reach of existing regulations to cover the home insurance policies, Youngblood said. The disclosure would include “all conditions, exclusions and other limitations” on the policy’s coverage, he said.
June Holmes, interim chief executive officer of the Property Casualty Insurers Association of America, said in a statement that Lott’s bill was unnecessary.
“PCI has long supported efforts to make policy language clear and understandable. … As a result of our support and that of state regulators, many states – including Senator Lott’s home state of Mississippi – are already doing an excellent job in enacting and enforcing these ‘plain language’ requirements,” Holmes said. “Senator Lott’s proposal will do nothing to enhance the ‘plain language’ requirements already on the books in almost every state.”
Holmes added, “By calling for the FTC to enforce this redundant and unnecessary requirement, Senator Lott’s proposal will add another layer of costly and duplicative federal oversight of a function best left to the states – not to mention the confusion that dueling federal and state regulations would cause for consumers.”
Youngblood disputed Holmes’ assertion that the bill would be costly.
“I think most consumers would appreciate insurance policies that have this component as a simple, straightforward addition to the policy,” Youngblood said.
Lott’s experience with insurance after Hurricane Katrina prompted this and other initiatives to reform the insurance industry, Youngblood said.
“Sen. Lott learned some things about insurance he didn’t know before, and many Mississippians were forced to do the same thing,” Youngblood said. “He found out some things he was not comfortable with and would like to change.”
Lott has sued his insurance company, State Farm Fire and Casualty Co., over the insurer’s refusal to cover Hurricane Katrina damage to his home.
© 2007 The Sun Herald (Biloxi, Miss.), Brendan McKenna. Distributed by McClatchy-Tribune News Service.
Realtors, builders team up to help fix homes of the needyMANATEE COUNTY, Fla. – April 2, 2007 – Ty Pennington and TV’s Extreme Makeover: Home Edition crew might not be there, but local Realtors and builders are teaming up to help several families give their home a fresh, new look. It was actually that show that inspired Manatee Association of Realtors President May Aston to do something.
“I wanted to do something different for the community,” Aston said.
Last year, the Manatee Association of Realtors helped construct three Habitat for Humanity homes. This year, in addition to a continued relationship with Habitat, the organization has teamed up with the Home Builders Association of Manatee County to help at least four homeowners fix up their houses.
“It could be something as simple as needing a new roof or landscaping and painting,” Aston said.
Like Extreme Makeover, applicants will tell their story in hopes of being chosen. Aston expects a variety of people with many different reasons will apply, from homebuyers who bought on a budget and now don’t have the funds to fix up their property to those who may need wheelchair access.
“We just really want to help as many people as we can,” Aston said.
In order to help as many people as possible, the organizations are turning to local businesses for support. So far, they have been very pleased with the result.
Volunteers, sponsors and possible applicants can visit www.mycommunity makeover.com to find out more information. The applications should be available online shortly, Aston said.
As for their work with Habitat for Humanity, several of the affiliates are carrying on work there, too, said Jeannie Flynn, spokeswoman for the Manatee Association of Realtors.
“Whether it’s painting or really needing to get their homes fixed, this is a really neat project for Manatee County,” Flynn said.
Copyright © 2007 The Bradenton Herald, Fla., Melissa Followell. Distributed by McClatchy-Tribune Business News.