State approved insurance rate increase for hurricanes
How can this be legal or even fair? Following Hurricane Katrina, my insurance company no longer included hurricane coverage for my condo, and I had to find another insurer. Zephyr Insurance was one of only two that would issue the insurance. When I got my bill this year, I was charged $160 for coverage, plus $40 for minimum coverage and $50 "to write the policy." Apparently the insurance commissioner had approved a minimum charge and allows a charge to "write the policy." It is bad enough that I now pay twice what I did before Katrina, but to have to pay $90 more for nothing just doesn't seem right. Isn't the insurance commissioner supposed to protect the public from things like this?
Answer: The state Insurance Division did approve Zephyr Insurance Co.'s request, made last August, for an overall 10.1 percent rate increase to cover increased reinsurance and operating costs.
The rate increase took effect March 1, said Gordon Ito, chief deputy insurance commissioner.
Because of Hawaii's hurricane risk, the "availability of hurricane coverage is constantly changing and is impacted by catastrophic losses in other areas," he said.
That is what happened after Hurricane Katrina devastated New Orleans and other cities along the Gulf Coast in August 2005.
The rate increase was necessary for Zephyr and other hurricane insurers to maintain solvency, Ito said.
He said the Insurance Division does not normally announce rate increases, with the exception of "high-profile filings," such as for health, motor vehicle and workers' compensation.
Zephyr's billing "may appear confusing," he said, adding that the insurer should be contacted directly to explain how it was derived.
But basically, Zephyr's approved minimum premium is now $200. The $40 itself is not the rate increase, Ito said. Also, the service charge is not new and had increased to $50 from $25 before this year, he said.
After Katrina, Zephyr and other hurricane insurers withdrew from covering certain properties.
However, over the past two years, the Insurance Division "has been able to attract six new companies to help ensure that everyone can find hurricane coverage," Ito said.
There now are more than two dozen companies offering hurricane coverage, alone or as part of homeowner's insurance. Policyholders are encouraged to shop around.
The Insurance Division has posted a listing of insurers with their premiums at hawaii.gov/dcca/areas/ins/consumer/consumer_information.
Q: Regarding your column on community gardens ("Kokua Line," May 21): People who use the gardens have to pay a fee and small deposit, but what about water? Do taxpayers subsidize their water use?
A: Gardeners are subjected to user fees, which include the cost of water, according to the coordinator of the community gardens.
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