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According to NOLA.com, where Katrina raised prices and handicapped policy holders with higher premiums, the national recession is continuing the trend.

In an article published today on NOLA.com, the specter of rising costs has many people facing the hard decision of paying more or cutting coverage.

Insurers can’t make the investment returns they’ve made in the stock market in recent years and they’re unable to raise new money from investors, so they can’t support as many policies on their books. Meanwhile, reinsurance rates have risen as companies try to buy more coverage and because 2008 was the second-worst year for disasters worldwide, costing the insurance industry more than $50 billion.

With few options for raising capital, insurers need to shed policies from their books and raise rates to make the numbers work.

In the event of a hurricane, this shortened coverage means that damage will no longer be reimbursed and families will face even worse hardships than they do today. With policy holders cutting coverage, though, agents may become more vague with what policies do and don’t cover. This is extremely problematic for individuals who are unfamiliar with insurance law and raises the importance of having a full understanding and conversation with your agent, as well as the assistance of an attorney if the worst happens and your claim is denied unreasonably.

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When going about shopping for the right policy or making sure your policy protects you in the ways you need, it is important to understand insurance terms used. In educating yourself about the legal jargon employed by the insurance companies, you can be better prepared to combat an unfair claim payment or prevent your policy from being hijacked by vague language.

Below, courtesy of the University of Illinois, is a glossary of insurance terms, ranging from the letter D to F:

Deductible. The amount of covered charges an individual must pay before the insurance company begins payments. Insurance company can only require individual to pay 50% of the basic health services.

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In further developments to State Farm’s desired exit from providing insurance to customers in Florida, the state’s insurance regulators have begun investigating and questioning just how reasonable the insurer’s claims are.

Insurance regulators question State Farm’s dire claim

By Paige St. John

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When James and Gladys Kemp Lisanby felt they did not receive the proper amount they deserved from their insurance company after Hurricane Katrina severely damaged their home, they did what many Gulf Coast residents are unfortunately too scared or unsure to do: they got a lawyer. And they won.

After receiving over $900,000 in 2008 for their suit of policy limits for their losses and punitive damages as a result of deliberate underpayment, the Lisanbys received an additional $500,000 in January of 2009, bringing their total awardance to over $1.4 million. The additional $500,000 was awarded to compensate legal costs and case fees. The Mississippi couple successfully sued their insurance company, United States Automobile Association, after USAA paid the Lisanbys approximately $45,000 for damage done to the structure and property located on the second floor.

The important message sent by the Mississippi courts is simple: the law will help defend Gulf Coast residents when they are hit by underpaying insurance companies. Various cases similar to the Lisanbys’ have gone through Louisiana and Texas courts.

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When going about shopping for the right policy or making sure your policy protects you in the ways you need, it is important to understand insurance terms used. In educating yourself about the legal jargon employed by the insurance companies, you can be better prepared to combat an unfair claim payment or prevent your policy from being hijacked by vague language.

Below, courtesy of the University of Illinois, is a glossary of insurance terms from the letter C:

Case management. An approach designed to provide effective treatment to meet the specific needs of people with serious medical problems. Benefits not traditionally covered (for example, medical equipment) may be provided to promote cost-effectiveness.

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Understanding Terms Used in Insurance Claims

When going about shopping for the right policy or making sure your policy protects you in the ways you need, it is important to understand insurance terms used. In educating yourself about the legal jargon employed by the insurance companies, you can be better prepared to combat an unfair claim payment or prevent your policy from being hijacked by vague language.

Below, courtesy of the University of Illinois, is a glossary of insurance terms, ranging from the letter A to B:

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Per the Wall Street Journal, State Farm is dropping all of its homeowner policies in the state of Florida. Citing the difficulty of remaining stable in an area that has seen serious hurricane damage in the past decade, State Farm had as many as 700,000 homeowners policies as of September 30th.

One of the most important things to note is State Farm’s choice to withdraw came after Florida regulators refused to accept State Farm’s request to rase rated by 47%. This rate rise would have significantly helped the company’s profits in the wake of a series of hurricane seasons that have driven more people for coverage.

In the wake of this withdrawal, it is important for policy holders in the Gulf Coast to remain vigilant on their payments and not accept rate increases blindly. State Farm’s actions in Florida could easily occur in states like Texas and Louisiana where hurricanes Gustav and Ike caused millions of dollars of damage to policy holder’s homes and property. Care must be taken to use an insurance provider that is proven and tested by previous disasters or widespread damage in order to guarantee that your policy will be handled properly.

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Insurers seek dismissal of state’s Road Home suit

NEW ORLEANS — Lawyers for some of the nation’s largest insurance companies asked a federal judge on Friday to dismiss a lawsuit filed by a former Louisiana attorney general, calling it “a bald attempt” to force insurers to increase payouts for hurricanes Katrina and Rita.

U.S. District Judge Stanwood Duval Jr. heard arguments from lawyers on both sides of the case, but didn’t immediately rule on the companies’ request for him to dismiss the class action suit filed in 2007 by former Attorney General Charles Foti.

Lawyers for Allstate Insurance Co., State Farm Fire and Casualty Co. and other insurers claim the attorney general’s office is trying to take over the rights to more than 155,000 policyholder claims, to recover money the state paid out through the federally funded Road Home homeowner grant program after the 2005 hurricanes.

But the companies say the state already had deducted insurance payments in calculating grant awards.

More can be read at the KATC website, the article being available here

The insurance companies will fight tooth and claw to keep from paying out on claims and often make the process unbearable for policy holders looking to make a claim, going so far as to fight the state when it tries to step in for citizens. It is important to remain on top of your claim at every step and retain adequate legal council if necessary.

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Gulfport’s mayor, Brent Warr, along with his wife, pled not guilty to a 16-count indictment charging the city head with seeking financial assistance in the form of a grant for a beachfront home they did not live in but merely owned. With the charges, the government is seeking $222,798 and accuses the pair of lying to their insurance company. The storm damages were linked to Hurricane Katrina, a storm in 2005 that devastated the Gulf Coast region and left thousands homeless.

The lesson? Don’t lie to your insurance company. Follow the letter of law with the assistance of an attorney to make sure your claim is on the up and up. Individuals who lie on their insurance claims cost policy owners money as premiums go up and insurance companies seek to justify their hard-nosed process of investigation and claim denial. By working with a legal and building expert, you can present the most comprehensive and honest claim to get you the money you’re owed.

For more information on Mr. Warr’s legal troubles, click here

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