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News Five Exclusive: State Farm Wanted Bigger Hike
By Jessica Taloney Reporter
Published: Thu, May 15, 2008 - 5:20 pm
Last Updated: Fri, May 16, 2008 - 11:04 am
Last Updated: Fri, May 16, 2008 - 11:04 am
Jessica Taloney
Insurance companies continue to use the storm to justify dropping thousands of customers... even today!
Sharon Hamilton is one of those customers. ALFA dropped the wind insurance from her homeowners policy offering her coverage through what's called the "beach pool." Instead of paying $1,800 a year, Hamilton's new policy would cost more than $7,000.
"I was just scared. I couldn't imagine what we were gonna do," said Hamilton. "Our mortgage company required it, and I was afraid we were not going to find any," she said.
Thankfully, Hamilton found another option. She shopped around and got coverage through a different company. The premium is still much higher than what she was paying, and now she's looking for ways to bring the cost down.
"The 30 year old home is the one you can mitigate on," said Alabama Insurance Commissioner Walter Bell, who is urging Gulf Coast residents to hurricane proof their homes in exchange for credit from their insurer.
"It saves the consumer a tremendous amount of grief when a storm comes along because you aren't in the repairing stages every other year," said Bell. "It also saves the companies because they don't have that initial costs in terms of having to reimburse, having to pay claims on things we can build against."
The question is whether the benefit outweighs the cost, especially for families who don't have extra cash laying around.
We asked Steve Miller of Langan Construction to give us some estimates on a laundry list of upgrades endorsed by Commissioner Bell.
"That's gonna be the first thing that goes from the wind," said Miller, pointing to the roof.
Miller says the shingles on Hamilton's home would probably only withstand 60 mph wind, which is the equivalent of a moderate tropical storm. Miller suggests upgrading to architectural shingles, which can withstand winds up to 130 mph. "But, it's going to cost a lot of money," he says.
The cost of replacing Hamilton's roof with architectural shingles is somewhere between $6,500 and $8,000 depending on the resistance. If Hamilton opts for a metal roof, which Miller says is even sturdier, she's looking at $10,000 to $13,000.
Commissioner Bell also suggests installing permanent shutters. "Working shutters, not just the decorative kind," Bell says.
Miller estimates the price tag for the basic model shutters is about $9,000 for 12 windows.
"I would probably have to take out another mortgage, which I won't be able to afford," said Hamilton, who says the price tag is simply too high for those two improvements alone... But, the commissioner's suggested list of upgrades goes on.
"If I'm in a flood plain, I should raise my home," said Bell. "I should have tie downs on my roof to make sure it doesn't blow off with the first wind that comes along."
Some insurance companies already offer discounts to property owners who make some of the commissioner's suggested improvements, but Bell and several Mobile lawmakers would like to make the discounts mandatory. Senators Ben Brooks, Trip Pittman and Rusty Glover, all of Mobile and Baldwin Counties, proposed legislation, SB-609, to establish mitigating credits. The bill failed to win the approval of lawmakers' during this year's legislative session, but Commissioner Bell expects the issue to be brought up again next year.
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The insurance commissioner isn’t going to be there much longer and i’ve said it before,It wouldn’t surprise me to see him get an insurance related job with these companies. I’ve tried to contact him by phone and email and never got him. My home was built in the early 60s and I have made most of the changes on my own.Most of them were not too expensive,just time consuming, such as the shutters,$400 for the whole house and gable end,Materials and paint.Then there was the home made tie downs for the roof and utility sheds,a sumppit in the utility room,and other things to help increase wind and water resistance,such as spraying the brick with clear sealer.But none of this made a difference in the premium they wanted,so I am without coverage since Katrina. I don’t like it but you gotta take a stand somewhere.If you’ve got the money you don’t need,it would be prudent to buy it.