Latest news with #DepartmentofInsurance
Yahoo
02-06-2025
- Business
- Yahoo
Homeowners scramble as insurers quietly pull out of wildfire-prone areas: 'It is a problem for everybody'
Homeowners in Idaho are scrambling to find affordable insurance after many companies have reduced or stopped coverage in the state. As the Idaho Statesman reported, wildfires in Idaho have increased in size and severity in recent years because of rising global temperatures. While some homeowners have adapted by adding fireproof features to their homes and removing plants that are susceptible to burning, some insurance companies feel it's too risky to continue operating. Insurers told Dean Cameron, the director of the state's Department of Insurance, that Idaho is "just one firestorm away from this taking out, wiping out a whole community." Because of this, several insurance companies have stopped writing new policies, limited coverage to properties that aren't in fire-prone areas, and increased premiums to offset potential losses. This year, 25 of Idaho's 91 property insurance companies discontinued some or all coverage because of wildfire risks. Any remaining coverage has gone up substantially, with insurance premiums rising by 46% from 2021 to 2023 in the state, according to a report by insurance agency Policygenius. "There is a general belief that this is just a rich-people-that-live-in-wildland-interface problem." "That's not the case," Cameron told the Idaho Statesman. "It is a problem for everybody." Higher insurance premiums affect current and future homeowners; if costs go up too much, people may struggle to pay other bills or even be forced to obtain coverage through state-run programs that are meant to be a last resort, since they typically only provide basic protection. For prospective homebuyers, limited availability of insurance can make it difficult to buy a home, since lenders require proof of insurance before approving loans. The insurance industry is experiencing volatility across the United States, with numerous companies having to raise prices to offset damages from increasingly frequent storms. Burning dirty fuels such as oil and gas has put more heat-trapping gases in the atmosphere, leading to higher temperatures, the perfect conditions for extreme weather. Do you think your house could withstand a hurricane? No way Maybe a weak one I'm not sure It definitely could Click your choice to see results and speak your mind. States such as Florida, Texas, Louisiana, and California are among the most vulnerable to natural disasters, and therefore, a chaotic and unstable insurance market. But even in the Upper Midwest, which isn't normally associated with severe weather events, home insurance premiums have risen by nearly 40% over the past seven years. The shifting climate doesn't discriminate, and unfortunately, that means millions of people are dealing with skyrocketing insurance costs. Luckily, the Statesman reported that Idaho is "better positioned" than other Western states to handle the insurance crisis. While the Department of Insurance understands companies still need to make a profit, it's hosted public demonstrations to show homeowners how to make their properties fire-resistant to lower the risks of extensive damage or loss. These "home hardening" initiatives, which include removing flammable vegetation and installing fire-resistant materials, have helped many homeowners keep their insurance, as a YouTube video uploaded by KTVB detailed. Earlier this year, Cameron pushed for a measure to assist homeowners with funds to upgrade their properties and protect them from wildfires, but it did not pass. If you want to make your home fire-resistant without spending too much, you can always use a fire-retardant paint on your home's exterior and fire-retardant fabric spray on upholstery that will at least make fabrics harder to ignite, as Life Hacker recommended. Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet.
Yahoo
28-05-2025
- Business
- Yahoo
About 1,100 South Carolinians reported being victims of illegal health plan swapping last year
Director of Insurance Michael Wise testified in front of a House subcommittee on Tuesday, May 27, 2025, that cases where people's health insurance changed made up 22% of all fraud complaints last year. (Screenshot of SCETV legislative livestream) Insurance middlemen who switched South Carolinians' health care plans without telling them accounted for 22% of fraud cases reported to the state Department of Insurance last year, the agency director told legislators Tuesday. Of the 5,000 complaints of fraud reported throughout 2024, 1,100 came from people who signed up for insurance through the online marketplace — created by the Affordable Health Care Act also known as Obamacare — and said their health care plan was changed without permission. That's illegal, but the scam is relatively easy. All it takes is for a licensed broker to have the insured's name, date of birth and home state, said Michael Wise, director of the state Department of Insurance since 2023. The agent pockets the commission, while patients usually have no idea they've been had until they try to use their insurance card at a doctor's office or pharmacy, Wise told a House oversight panel. 'They might switch these policy orders a good many times. And so that has become a trend that we're looking out for,' he said, adding he's heard of plans being switched up to 16 times. It's a national problem, with agents often scamming people from multiple states. The Center for Medicare Services and Medicaid Services, the federal agency that oversees the online marketplace, received 73,884 complaints of unauthorized policy switching in the first six months of last year. That led to the agency announcing last July that it would no longer authorize changes from agents or brokers unless they were already associated with the person's enrollment. Any unassociated or new broker now has to do a three-way call with the customer and a federal call center. 'That has become a trend that we're looking out for. The federal government is too, and some things have been put in place to try to curb that,' Wise told the House subcommittee. In April 2024, KFF Health News reported that CMS emailed a plan to industry representatives to handle complaints from people who'd had their insurance switched. The scam became common enough to get its own acronym: UPS, for unauthorized plan switch. The slideshow says CMS found a 'large number of 2024 UPS cases' involving plans that were auto-renewed because the person was unaware. In South Carolina, cases are under investigation, but no one has been charged yet with a crime related to the scam, said Jason Spencer, a prosecutor for the Department of Insurance. He did not specify how many cases remain open. Spencer added that Florida seems to be a hotbed for agents doing this and he's in regular contact with that state's Department of Insurance. The scam involving health plans subsidized through the federal marketplace started popping up in 2022 and were initially sparse, Spencer told the SC Daily Gazette. By 2023, it had become a trend. Then in 2024, the complaints skyrocketed, he said, though he didn't have the exact numbers. 'It took a steep jump very quickly,' he said. Brokers typically make $20 to $25 for every person they enroll and can make that commission multiple times from the same person, according to KFF Health News. 'They could sign that same person up for another plan again, and that was how they were just continuing to churn commissions,' Spencer said. He explained that the scammer and victim often never talk to each other. A licensed broker can get information from the federal database. But sometimes the rogue agents will call their victims, claiming they're signing people up for a survey, saying they could win a potential prize, when they are actually gathering potential information to switch their insurance policies. 'They would be in contact with somebody that's advertising discount cards or gift cards — 'Oh, just sign up for this survey' — and they don't really pay attention to what they are signing up for,' Spencer said. 'The person who's actually supposed to be insured doesn't have any idea any of this is going on until they go to their doctor, and their doctor's like, 'Oh, well, where's your copay?'' Spencer said. Spencer's recommendation for avoiding the surprise: Read your mail, especially if it's from an insurance company. 'If you get something in the mail that looks like it's from some insurance company that you're like 'Oh, I don't have any business with them,' don't just assume it's junk mail and throw it away,' he said. 'Read that and make sure that you didn't accidentally get signed up for something.'
American Military News
20-05-2025
- Business
- American Military News
Insurers seek to surcharge California homeowners for LA County fire costs
Insurers are seeking to charge homeowners across California for some of the costs of the catastrophic Los Angeles County fires the companies were burdened with when the state's insurer of last resort needed a bailout. The California FAIR Plan Association, with the approval of state Insurance Commissioner Ricardo Lara, assessed its member carriers $1 billion on Feb. 11 when the plan was swamped with thousands of claims after the Jan. 7 fires in Pacific Palisades, Altadena and Sylmar. The plan, operated and backstopped by the state's licensed home insurers, said it has made $2.75 billion in claims payments as of Friday and expects its costs for the fires will total $4 billion, which it could not cover with its limited surplus and reinsurance funds. Now, under a policy Lara put in place last year that is being challenged in court, insurers are filing applications with the state Department of Insurance seeking to surcharge their policyholders statewide for half the costs of that assessment. That means even if a person lives hundreds of miles away from the fires, they could be forced to help pay their insurers' costs of the assessment — on top of annual premiums that have risen hundreds or even thousands of dollars for some homeowners as many insurers have sharply raised rates. So far at least 10 home insurers and their affiliates have filed applications for surcharges, with the fees ranging from about $6 or less for some rental policyholders, $20 or $30 for condo owners and typically $40 to $60 for a standard homeowners policy, though some are less or somewhat more. The insurers are seeking to apply the charges starting this year, with some spreading the charges over two annual billing cycles. Among the insurers that have filed applications are affiliates of AAA and Mercury, two of the largest home insurers in the state, and carriers with smaller market share such as Amica and Western Mutual. Lara has final say about whether to allow the surcharges to go through. 'This modest, temporary cost recovery — just a few dollars a month for most policyholders — is critical to preventing a catastrophic collapse of California's insurance market,' said Denni Ritter, vice president for state government relations for the American Property Casualty Insurance Association trade group. Hilary McLean, a spokesperson for the FAIR Plan, said it has no role in determining how its member carriers decide to pay for assessments. While many of the state's licensed home insurers have yet to file applications, most future surcharges could be in a similar range because the FAIR Plan assessed its member carriers based on their share of California's home insurance market. 'That was the ballpark estimate,' said Rex Frazier, president of the Personal Insurance Federation of California, which represents major property and casualty insurers. But Carmen Balber, executive director of Consumer Watchdog, a Los Angeles-based group that filed the suit to stop the surcharges, said that because the application figures are only averages, homeowners with larger policies could end up paying surcharges totaling hundreds of dollars. 'The average doesn't fully represent the impact on many homeowners, and $50 is not negligible for Californians who have already seen massive home insurance premium increases,' she said, adding that this could be the 'tip of the iceberg' if the FAIR Plan further assesses its member carriers. Michael Soller, a spokesperson for Lara, said regulators are reviewing the applications to ensure they follow the rules established by the department regarding which policyholders are being charged, for how much and for what duration. Insurers must break down the charges by their different lines of insurance. 'We also want to understand each insurer's process to prevent overcollection. It's about fairness, transparency and holding insurance companies within legal bounds,' he said. The FAIR Plan got into financial trouble as insurers fled the state's home insurance market, which was hit with a series of devastating fires even before this year, including the 2018 blaze that nearly wiped out the town of Paradise in Northern California. A Times analysis found that in the Palisades and Eaton fire zones, the FAIR Plan's rolls shot up last year a combined 47%. From 2020 to 2024, the number of homes in both areas on the plan nearly doubled from 14,272 to 28,440. Lara's surcharge policy was instituted as part of his Sustainable Insurance Strategy to make the troubled homeowners market more attractive to insurers. It allows insurers to recoup from their policyholders up to half of any FAIR Plan assessment that totals up to $1 billion for residential losses and $1 billion for commercial losses. Any assessments that exceed those limits can be completely passed on to policyholders. Residential customers are not responsible for commercial losses. However, an additional assessment may not be necessary, according to a Feb. 11 letter sent by the plan to Lara seeking permission for the current assessment on its member carriers. The plan said it was running out of money to pay claims after using up $510 million in unallocated funds and drawing money from its $5.78-billion reinsurance program, acquired by the insurer to spread its risk from fires and other catastrophic events. However, it estimated it would have $306 million in cash after the assessments of its members as of June 30. Frazier said that he had 'no reason to believe' there would be another FAIR Plan assessment related to the Jan. 7 fires, but that another major blaze this year could change the calculus. 'I think the worry is what happens next November or December,' he said. McLean said the FAIR Plan 'cannot speculate on losses associated with future disasters.' A bill working its way through the Legislature would authorize the California Infrastructure and Economic Development Bank to issue bonds on behalf of the FAIR Plan to help pay its claims and increase its liquidity. Consumer Watchdog, which called Lara's decision last year to provide for insurer surcharges an 'industry bailout,' sued Lara in April in Los Angeles County Superior Court claiming that nothing in the 1968 statute that created the Fair Plan contemplated such an assessment on policyholders. It also alleged Lara violated state law by approving the assessment policy via 'administrative fiat' rather through the proper rulemaking procedure. A spokesman for Lara at the time said the lawsuit 'serves to undermine our efforts to restore competition to all areas of our state, so people can get off the Fair Plan and back to the regular market.' The American Property Casualty Insurance Association called it a 'reckless and self-serving stunt.' The state's 10 largest home insurers also were sued last month by a group of Jan. 7 fire victims who allege the companies colluded to drop policyholders and force them into the FAIR Plan, where they would pay more for less coverage. That had the effect of reducing the insurers' liabilities after the fires due to the plan's losses. The American Property Casualty Insurance Association called the lawsuit 'meritless.' ___ © 2025 Los Angeles Times. Distributed by Tribune Content Agency, LLC.
Yahoo
13-05-2025
- Business
- Yahoo
Insurers seek to surcharge California homeowners for L.A. County fire costs
Insurers are seeking to charge homeowners across California for some of the costs of the catastrophic Los Angeles County fires the companies were burdened with when the state's insurer of last resort needed a bailout. The California FAIR Plan Assn., with the approval of state Insurance Commissioner Ricardo Lara, assessed its member carriers $1 billion on Feb. 11 when the plan was swamped with thousands of claims after the Jan. 7 fires in Pacific Palisades, Altadena and Sylmar. The plan, operated and backstopped by the state's licensed home insurers, said it has made $2.75 billion in claims payments as of Friday and expects its costs for the fires will total $4 billion, which it could not cover with its limited surplus and reinsurance funds. Now, under a policy Lara put in place last year that is being challenged in court, insurers are filing applications with the state Department of Insurance seeking to surcharge their policyholders statewide for half the costs of that assessment. Read more: FAIR Plan to assess insurers $1 billion for L.A. fires; consumers may be on the hook for nearly half That means even if a person lives hundreds of miles away from the fires, they could be forced to help pay their insurers' costs of the assessment — on top of annual premiums that have risen hundreds or even thousands of dollars for some homeowners as many insurers have sharply raised rates. So far at least 10 home insurers and their affiliates have filed applications for surcharges, with the fees ranging from about $6 or less for some rental policyholders, $20 or $30 for condo owners and typically $40 to $60 for a standard homeowners policy, though some are less or somewhat more. The insurers are seeking to apply the charges starting this year, with some spreading the charges over two annual billing cycles. Among the insurers that have filed applications are affiliates of AAA and Mercury, two of the largest home insurers in the state, and carriers with smaller market share such as Amica and Western Mutual. Lara has final say about whether to allow the surcharges to go through. "This modest, temporary cost recovery — just a few dollars a month for most policyholders — is critical to preventing a catastrophic collapse of California's insurance market," said Denni Ritter, vice president for state government relations for the American Property Casualty Insurance Assn. trade group. Hilary McLean, a spokesperson for the FAIR Plan, said it has no role in determining how its member carriers decide to pay for assessments. Read more: Insurer of last resort kept growing. Then L.A. fire victims paid the price While many of the state's licensed home insurers have yet to file applications, most future surcharges could be in a similar range because the FAIR Plan assessed its member carriers based on their share of California's home insurance market. "That was the ballpark estimate," said Rex Frazier, president of the Personal Insurance Federation of California, which represents major property and casualty insurers. But Carmen Balber, executive director of Consumer Watchdog, a Los Angeles-based group that filed the suit to stop the surcharges, said that because the application figures are only averages, homeowners with larger policies could end up paying surcharges totaling hundreds of dollars. "The average doesn't fully represent the impact on many homeowners, and $50 is not negligible for Californians who have already seen massive home insurance premium increases," she said, adding that this could be the "tip of the iceberg" if the FAIR Plan further assesses its member carriers. Michael Soller, a spokesperson for Lara, said regulators are reviewing the applications to ensure they follow the rules established by the department regarding which policyholders are being charged, for how much and for what duration. Insurers must break down the charges by their different lines of insurance. "We also want to understand each insurer's process to prevent overcollection. It's about fairness, transparency and holding insurance companies within legal bounds," he said. The FAIR Plan got into financial trouble as insurers fled the state's home insurance market, which was hit with a series of devastating fires even before this year, including the 2018 blaze that nearly wiped out the town of Paradise in Northern California. A Times analysis found that in the Palisades and Eaton fire zones, the FAIR Plan's rolls shot up last year a combined 47%. From 2020 to 2024, the number of homes in both areas on the plan nearly doubled from 14,272 to 28,440. Read more: Consumer group sues insurance commissioner over Fair Plan assessments on state homeowners Lara's surcharge policy was instituted as part of his Sustainable Insurance Strategy to make the troubled homeowners market more attractive to insurers. It allows insurers to recoup from their policyholders up to half of any FAIR Plan assessment that totals up to $1 billion for residential losses and $1 billion for commercial losses. Any assessments that exceed those limits can be completely passed on to policyholders. Residential customers are not responsible for commercial losses. However, an additional assessment may not be necessary, according to a Feb. 11 letter sent by the plan to Lara seeking permission for the current assessment on its member carriers. The plan said it was running out of money to pay claims after using up $510 million in unallocated funds and drawing money from its $5.78-billion reinsurance program, acquired by the insurer to spread its risk from fires and other catastrophic events. However, it estimated it would have $306 million in cash after the assessments of its members as of June 30. Frazier said that he had "no reason to believe" there would be another FAIR Plan assessment related to the Jan. 7 fires, but that another major blaze this year could change the calculus. "I think the worry is what happens next November or December," he said. McLean said the FAIR Plan "cannot speculate on losses associated with future disasters." A bill working its way through the Legislature would authorize the California Infrastructure and Economic Development Bank to issue bonds on behalf of the FAIR Plan to help pay its claims and increase its liquidity. Consumer Watchdog, which called Lara's decision last year to provide for insurer surcharges an "industry bailout," sued Lara in April in Los Angeles County Superior Court claiming that nothing in the 1968 statute that created the Fair Plan contemplated such an assessment on policyholders. It also alleged Lara violated state law by approving the assessment policy via 'administrative fiat' rather through the proper rulemaking procedure. A spokesman for Lara at the time said the lawsuit "serves to undermine our efforts to restore competition to all areas of our state, so people can get off the Fair Plan and back to the regular market.' The American Property Casualty Insurance Assn. called it a "reckless and self-serving stunt." The state's 10 largest home insurers also were sued last month by a group of Jan. 7 fire victims who allege the companies colluded to drop policyholders and force them into the FAIR Plan, where they would pay more for less coverage. That had the effect of reducing the insurers' liabilities after the fires due to the plan's losses. The American Property Casualty Insurance Assn. called the lawsuit "meritless." Sign up for our Wide Shot newsletter to get the latest entertainment business news, analysis and insights. This story originally appeared in Los Angeles Times.
Los Angeles Times
13-05-2025
- Business
- Los Angeles Times
Insurers seek to surcharge California homeowners for L.A. County fire costs
Insurers are seeking to charge homeowners across California for some of the costs of the catastrophic Los Angeles County fires the companies were burdened with when the state's insurer of last resort needed a bailout. The California FAIR Plan Assn., with the approval of state Insurance Commissioner Ricardo Lara, assessed its member carriers $1 billion on Feb. 11 when the plan was swamped with thousands of claims after the Jan. 7 fires in Pacific Palisades, Altadena and Sylmar. The plan, operated and backstopped by the state's licensed home insurers, said it has made $2.75 billion in claims payments as of Friday and expects its costs for the fires will total $4 billion, which it could not cover with its limited surplus and reinsurance funds. Now, under a policy Lara put in place last year that is being challenged in court, insurers are filing applications with the state Department of Insurance seeking to surcharge their policyholders statewide for half the costs of that assessment. That means even if a person lives hundreds of miles away from the fires, they could be forced to help pay their insurers' costs of the assessment — on top of annual premiums that have risen hundreds or even thousands of dollars for some homeowners as many insurers have sharply raised rates. So far at least 10 home insurers and their affiliates have filed applications for surcharges, with the fees ranging from about $6 or less for some rental policyholders, $20 or $30 for condo owners and typically $40 to $60 for a standard homeowners policy, though some are less or somewhat more. The insurers are seeking to apply the charges starting this year, with some spreading the charges over two annual billing cycles. Among the insurers that have filed applications are affiliates of AAA and Mercury, two of the largest home insurers in the state, and carriers with smaller market share such as Amica and Western Mutual. Lara has final say about whether to allow the surcharges to go through. 'This modest, temporary cost recovery — just a few dollars a month for most policyholders — is critical to preventing a catastrophic collapse of California's insurance market,' said Denni Ritter, vice president for state government relations for the American Property Casualty Insurance Assn. trade group. Hilary McLean, a spokesperson for the FAIR Plan, said it has no role in determining how its member carriers decide to pay for assessments. While many of the state's licensed home insurers have yet to file applications, most future surcharges could be in a similar range because the FAIR Plan assessed its member carriers based on their share of California's home insurance market. 'That was the ballpark estimate,' said Rex Frazier, president of the Personal Insurance Federation of California, which represents major property and casualty insurers. But Carmen Balber, executive director of Consumer Watchdog, a Los Angeles-based group that filed the suit to stop the surcharges, said that because the application figures are only averages, homeowners with larger policies could end up paying surcharges totaling hundreds of dollars. 'The average doesn't fully represent the impact on many homeowners, and $50 is not negligible for Californians who have already seen massive home insurance premium increases,' she said, adding that this could be the 'tip of the iceberg' if the FAIR Plan further assesses its member carriers. Michael Soller, a spokesperson for Lara, said regulators are reviewing the applications to ensure they follow the rules established by the department regarding which policyholders are being charged, for how much and for what duration. Insurers must break down the charges by their different lines of insurance. 'We also want to understand each insurer's process to prevent overcollection. It's about fairness, transparency and holding insurance companies within legal bounds,' he said. The FAIR Plan got into financial trouble as insurers fled the state's home insurance market, which was hit with a series of devastating fires even before this year, including the 2018 blaze that nearly wiped out the town of Paradise in Northern California. A Times analysis found that in the Palisades and Eaton fire zones, the FAIR Plan's rolls shot up last year a combined 47%. From 2020 to 2024, the number of homes in both areas on the plan nearly doubled from 14,272 to 28,440. Lara's surcharge policy was instituted as part of his Sustainable Insurance Strategy to make the troubled homeowners market more attractive to insurers. It allows insurers to recoup from their policyholders up to half of any FAIR Plan assessment that totals up to $1 billion for residential losses and $1 billion for commercial losses. Any assessments that exceed those limits can be completely passed on to policyholders. Residential customers are not responsible for commercial losses. However, an additional assessment may not be necessary, according to a Feb. 11 letter sent by the plan to Lara seeking permission for the current assessment on its member carriers. The plan said it was running out of money to pay claims after using up $510 million in unallocated funds and drawing money from its $5.78-billion reinsurance program, acquired by the insurer to spread its risk from fires and other catastrophic events. However, it estimated it would have $306 million in cash after the assessments of its members as of June 30. Frazier said that he had 'no reason to believe' there would be another FAIR Plan assessment related to the Jan. 7 fires, but that another major blaze this year could change the calculus. 'I think the worry is what happens next November or December,' he said. McLean said the FAIR Plan 'cannot speculate on losses associated with future disasters.' A bill working its way through the Legislature would authorize the California Infrastructure and Economic Development Bank to issue bonds on behalf of the FAIR Plan to help pay its claims and increase its liquidity. Consumer Watchdog, which called Lara's decision last year to provide for insurer surcharges an 'industry bailout,' sued Lara in April in Los Angeles County Superior Court claiming that nothing in the 1968 statute that created the Fair Plan contemplated such an assessment on policyholders. It also alleged Lara violated state law by approving the assessment policy via 'administrative fiat' rather through the proper rulemaking procedure. A spokesman for Lara at the time said the lawsuit 'serves to undermine our efforts to restore competition to all areas of our state, so people can get off the Fair Plan and back to the regular market.' The American Property Casualty Insurance Assn. called it a 'reckless and self-serving stunt.' The state's 10 largest home insurers also were sued last month by a group of Jan. 7 fire victims who allege the companies colluded to drop policyholders and force them into the FAIR Plan, where they would pay more for less coverage. That had the effect of reducing the insurers' liabilities after the fires due to the plan's losses. The American Property Casualty Insurance Assn. called the lawsuit 'meritless.'
