Understanding Wind Pool

andrea · 01-05-2007, 02:20 PM

I know it's more fun to pay attention to national and international happenings, but I found this breakdown of a rather confusing issue here at home and thought I would share it with you all. It's so important that we kkep on top of the redevelopment of the coast...this is our home.

The wind pool

The state insurance wind pool was created in the 1960s in an effort to provide wind coverage in areas in the six southernmost counties where companies didn't want to write policies because of hurricane risk. Home and business owners pay premiums into the pool. When damage exceeds the money collected in premiums, the more than 500 companies that do business in the state have to pay the difference. The companies have had to cough up more than $545 million in wind pool losses from Katrina. Since 1987, the wind pool has taken in $188 million in premiums and paid out $778 million. After Katrina, wind pool premiums were jacked up 268 percent for business owners and 90 percent for homeowners. The hikes would have been worse if Gov. Haley Barbour had not secured $50 million in federal funds to reduce the increase. Even with the drastic increases, more people are flocking to the wind pool, worsening its financial lopsidedness and risk, because private companies are refusing to write policies on the Coast.

The crisis:
Private insurance companies are halting their policy-writing on the Coast, and as people and businesses flock to the wind pool as their only alternative, it becomes more financially unsound, with its total insured value skyrocketing from less than $2 billion pre-Katrina to about $6 billion today, lacking the wherewithal to pay losses if another hurricane hits. A recent, 268 percent wind pool rate increase for commercial policies, Coast leaders say, has all but halted Katrina business redevelopment, and a 90 percent rate increase, and lack of availability of private insurance, are thwarting homeowners' rebuilding efforts.

The proposed solutions:

• Remove George, Pearl River and Stone counties from wind pool eligibility, allowing only Hancock, Harrison and Jackson county people to buy the insurance. This was pitched for the first time by the state insurance commissioner on Thursday.

• Allow "recoupment" for insurance companies. This would allow them to tack a charge onto premiums, statewide, for three to five years to recover losses after a hurricane as long as they stay and write policies in the six South Mississippi counties.

• Allow the wind pool to reinvest any surplus at the end of the year instead of distributing it to member insurers as it does now.

• Provide tax credits and incentives for insurance companies and for customers who hurricane-proof their homes. State Rep. Jessica Upshaw, R-Diamondhead, has also proposed a tax break for people and businesses who are socked with huge increases in insurance premiums.

• Make excess- and surplus-line insurance companies, who aren't required to be in the wind pool, pay a 1 percent fee.

• Allow higher deductible options - voluntary, not mandatory - for policyholders in the wind pool. This would let them pay lower premiums.

• Encourage wind mitigation techniques by offering premium discounts.

• Pump state and/or federal tax dollars into the wind pool, to provide temporary relief from large rate increases. A House bill proposes to provide $30 million, and apparently has sufficient votes to pass, but House leaders declined to call it up for a vote Wednesday and Thursday.

Mikael · 01-06-2007, 03:17 PM

I guess that explains in part why I didn't see any businesses other than casinos rebuilding on highway 90 the last time I was there.

Mikael · 01-07-2007, 08:55 PM

That's ole time Mississippi politics right there! But, that could be a good thing-just wait til Wiggins gets a Toyota plant or something like that due to the cheap labor.

andrea · 01-08-2007, 03:34 PM

Apathy is lethal.

Julie · 01-09-2007, 11:23 AM

And another kick in the pants... insurance companies had a record profit gain of $45 billion last year. http://messageboard.gulfcoastbands.c...phic-loss.html Crazy, is it not? State Farm insured my family's house in Biloxi for $1800 a year before Katrina. After Katrina the premium jumped almost twice that much, at $3300 with less coverage.

alex 101 · 01-09-2007, 11:53 AM

Quote:

Originally Posted by Spert

So are the current insurance rates on the coast.
I didn't recieved any damage from Ivan or Katrina.
Yet my insurance still went up 20%.
Why Mr State Farm do I have to pay more for the same insurance with ZERO claims?
Thats the chance you take when you are in the insurance business.
You suck Mr State Farm, YOU SUCK!!!

you're lucky it's only 20%. homeowners here are looking at a 90% increase. business owners are looking at 260%+ increase. doesn't really do much to put the local economy back on track. it's people from in our own states that complain about having to pay a slight increase thats terrible. especially since we here in southern parts contribute more to the state than any other part of it.

Mikael · 01-09-2007, 06:50 PM

I would like to see only the 3 coastal counties involved in the wind pool. That way, what was paid in wouldn't be wasted on areas that don't face the brunt of the storm, and leave more money for the coastal areas. Andrea is right, this is an important issue concerning the redevelopmnet of the coast.
I know it's been said often, but, Katrina has changed the coast in ways people don't realize yet.

ambergirl · 01-10-2007, 12:47 PM

I haven't even checked to see if mine has gone up. But I think I will.

01-05-2007, 02:20 PM	#1 (permalink)
andrea Fawkin' Newbie Join Date: Oct 2006 Location: Mississippi Gulf Coast Age: 28 Posts: 96 Rep Power: 0	Understanding Wind Pool I know it's more fun to pay attention to national and international happenings, but I found this breakdown of a rather confusing issue here at home and thought I would share it with you all. It's so important that we kkep on top of the redevelopment of the coast...this is our home. The wind pool The state insurance wind pool was created in the 1960s in an effort to provide wind coverage in areas in the six southernmost counties where companies didn't want to write policies because of hurricane risk. Home and business owners pay premiums into the pool. When damage exceeds the money collected in premiums, the more than 500 companies that do business in the state have to pay the difference. The companies have had to cough up more than $545 million in wind pool losses from Katrina. Since 1987, the wind pool has taken in $188 million in premiums and paid out $778 million. After Katrina, wind pool premiums were jacked up 268 percent for business owners and 90 percent for homeowners. The hikes would have been worse if Gov. Haley Barbour had not secured $50 million in federal funds to reduce the increase. Even with the drastic increases, more people are flocking to the wind pool, worsening its financial lopsidedness and risk, because private companies are refusing to write policies on the Coast. The crisis: Private insurance companies are halting their policy-writing on the Coast, and as people and businesses flock to the wind pool as their only alternative, it becomes more financially unsound, with its total insured value skyrocketing from less than $2 billion pre-Katrina to about $6 billion today, lacking the wherewithal to pay losses if another hurricane hits. A recent, 268 percent wind pool rate increase for commercial policies, Coast leaders say, has all but halted Katrina business redevelopment, and a 90 percent rate increase, and lack of availability of private insurance, are thwarting homeowners' rebuilding efforts. The proposed solutions: • Remove George, Pearl River and Stone counties from wind pool eligibility, allowing only Hancock, Harrison and Jackson county people to buy the insurance. This was pitched for the first time by the state insurance commissioner on Thursday. • Allow "recoupment" for insurance companies. This would allow them to tack a charge onto premiums, statewide, for three to five years to recover losses after a hurricane as long as they stay and write policies in the six South Mississippi counties. • Allow the wind pool to reinvest any surplus at the end of the year instead of distributing it to member insurers as it does now. • Provide tax credits and incentives for insurance companies and for customers who hurricane-proof their homes. State Rep. Jessica Upshaw, R-Diamondhead, has also proposed a tax break for people and businesses who are socked with huge increases in insurance premiums. • Make excess- and surplus-line insurance companies, who aren't required to be in the wind pool, pay a 1 percent fee. • Allow higher deductible options - voluntary, not mandatory - for policyholders in the wind pool. This would let them pay lower premiums. • Encourage wind mitigation techniques by offering premium discounts. • Pump state and/or federal tax dollars into the wind pool, to provide temporary relief from large rate increases. A House bill proposes to provide $30 million, and apparently has sufficient votes to pass, but House leaders declined to call it up for a vote Wednesday and Thursday. __________________ yodeladyoohoo! http://www.myspace.com/lovelydayfor

01-06-2007, 03:17 PM	#2 (permalink)
Mikael Band Member Band Whore Join Date: Dec 2004 Location: Down In a Hole Posts: 905 Rep Power: 45	I guess that explains in part why I didn't see any businesses other than casinos rebuilding on highway 90 the last time I was there. __________________ I just saved a ton of money on car insurance by switching to no car insurance!!! www.myspace.com/13468360

01-07-2007, 08:55 PM	#3 (permalink)
Mikael Band Member Band Whore Join Date: Dec 2004 Location: Down In a Hole Posts: 905 Rep Power: 45	That's ole time Mississippi politics right there! But, that could be a good thing-just wait til Wiggins gets a Toyota plant or something like that due to the cheap labor. __________________ I just saved a ton of money on car insurance by switching to no car insurance!!! www.myspace.com/13468360

01-08-2007, 03:34 PM	#4 (permalink)
andrea Fawkin' Newbie Join Date: Oct 2006 Location: Mississippi Gulf Coast Age: 28 Posts: 96 Rep Power: 0	Apathy is lethal. __________________ yodeladyoohoo! http://www.myspace.com/lovelydayfor

01-09-2007, 11:23 AM	#5 (permalink)
Julie (((ThatGirl))) Screamo for Emo Join Date: Dec 2004 Location: Mobile, Alabama Posts: 227 Rep Power: 46	And another kick in the pants... insurance companies had a record profit gain of $45 billion last year. http://messageboard.gulfcoastbands.c...phic-loss.html Crazy, is it not? State Farm insured my family's house in Biloxi for $1800 a year before Katrina. After Katrina the premium jumped almost twice that much, at $3300 with less coverage. __________________ It is who we become that changes the world and our environment, not what we do. John Whitehouse May 4 1960 - January 28 2008

01-09-2007, 06:50 PM	#7 (permalink)
Mikael Band Member Band Whore Join Date: Dec 2004 Location: Down In a Hole Posts: 905 Rep Power: 45	I would like to see only the 3 coastal counties involved in the wind pool. That way, what was paid in wouldn't be wasted on areas that don't face the brunt of the storm, and leave more money for the coastal areas. Andrea is right, this is an important issue concerning the redevelopmnet of the coast. I know it's been said often, but, Katrina has changed the coast in ways people don't realize yet. __________________ I just saved a ton of money on car insurance by switching to no car insurance!!! www.myspace.com/13468360

01-10-2007, 12:47 PM	#8 (permalink)
ambergirl Band Member GCB Senior Citizen Join Date: Dec 2004 Location: Escatawpa, MS Age: 29 Posts: 2,525 Rep Power: 48	I haven't even checked to see if mine has gone up. But I think I will. __________________ You've Got Questions. We've Got Ambergirl. www.myspace.com/pajamasakapj