Chaney touts insurance improvements

Published 5:00 am Thursday, May 28, 2009

WESSON – Updated insurance regulations will prevent areoccurrence of the mass confusion and lawsuits filed by State Farmpolicyholders after Hurricane Katrina in 2005, said MississippiInsurance Commissioner Mike Chaney.

“We’re ready,” Chaney said following an address to Boys State atCopiah-Lincoln Community College. “We’ve changed our emergencyresponse, the way companies write policies and the enforcement ofthose policies; making them specific. There will be no blindsides.(Companies are) going to write it and put it on your policy.”

Chaney’s discussion with Boys State comes less than one weekbefore the start of the 2009 Atlantic Hurricane Season, which ispredicted to produce nine to 14 names storms over the summer.

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Chaney said the specific regulations would let homeowners knowexactly what is covered on their policies, lessening the chances ofa scenario on the Gulf Coast where thousands of residents wereinitially turned down after Katrina because of disputes overwhether wind or water destroyed their homes.

The commissioner’s examination of State Farm concluded lastsummer, finding no wrongdoing.

“The bottom line was we found nothing wrong with they had done,”Chaney said. “They did a bunch of stupid stuff, but they didn’tbreak the law. Insurance companies were not prepared for Katrina.It became a very complicated issue, and Katrina has probablychanged our lives for a long time to come.”

Financial recovery in Gulf Coast counties is still going on,Chaney said. He said about 75 percent of commercial claims havebeen restored, while 50 percent of residential claims have beenrestored.

The biggest problem, he said, is the current cost of insuranceon the coast.

“Insurance on the Gulf Coast is equal to a year of mortgage,”Chaney said. “People cannot afford to live on the Gulf Coast untilwe find out something to do with insurance costs.”

Depending on how lawmakers shape the fiscal year 2010 budgetthis week, Chaney said his office may be able to ease thosecosts.

“There’s hope it could go down,” he said. “This morning at 10:30I had $20 million extra in the budget for the wind pool, by 1 p.m.I lost it and by 3:30 p.m., I had it back.”

After his address to Boys State, Chaney discussed the necessityof flood insurance. He said soon all the state’s 82 counties wouldbe members of the National Flood Insurance Program, a FederalEmergency Management Agency program that allows for discountedflood insurance and makes member counties eligible for certaingrants.

He said Lincoln County, which is one of only four counties inthe state that are not NFIP members, should join the program. Hesaid county supervisors’ argument that few county residents live inthe flood plains is a valid one, but those who do reside in a floodplain still need insurance.

“And, it will be cheaper because few people are in the floodplains,” Chaney said.

Chaney also fielded political questions from the members of BoysState, which the rising high school seniors have asked of everyguest speaker this week. He announced that he has started his ownre-election bid and has begun holding fundraisers.

Chaney also shared his opinion on potential gubernatorialcandidates in 2011. The obvious candidate is Lt. Gov. PhilBryant.

“It’s too early for him to get out in front… right now heneeds to concentrate on being a good lieutenant governor,” Chaneysaid.