West Virginia Insurance Premiums Stable After 2012 Derecho
West Virginia property owners in general didn’t see a huge uptick in insurance premiums after making claims from last summer’s massive windstorm, state data shows.
Figures compiled by the state Insurance Commissioner’s office show nearly 36,700 insurance claims were filed in the month after the June 29, 2012 storm. The Charleston Daily Mail reports property owners received $87 million in insurance payments.
Insurers also paid out about 4,000 claims totaling more than $15.4 million following Superstorm Sandy last October.
Former state Insurance Commissioner Jane Cline analyzed the derecho claim data. She said it hasn’t shown any significant increase in companies terminating homeowner coverage following the storm.
She also said insurance rates have remained relatively stable. Most post-storm increases were in the 3 percent range.
“That’s relatively small when you think about the overall dollar amount that was paid out as a result of these claims,” she said.
Cline, currently the director of public policy for the Charleston law firm Spilman Thomas and Battle, said changes made by the Legislature in the past decade helped keep automobile and homeowner insurance rates from skyrocketing after the derecho.
“It’s a much more stabilized marketplace than it was in early 2000s,” Cline said.
West Virginia had been one of six states that permitted third-party bad-faith lawsuits that allege insurers had not addressed a claim reasonably. In 2005, then-Gov. Joe Manchin led an effort to curtail those lawsuits, moving the complaints under the review of the insurance commissioner’s office.
The result replaced windfall jury awards to individuals with more reasonable amounts, Cline said. It also helped regulators to quickly identify and correct any bad insurance market practices.
“All the reforms and changes that have occurred in the marketplace and the regulatory structure have worked,” she said. “And as a result of that, in these disasters you’re not seeing the increased rates and cancellations of policies.”
Across the state, the derecho and subsequent storms left three people dead and more than 680,000 customers without electricity. Sandy was blamed for seven deaths, dumped up to 19 inches of snow, closed dozens of roads, toppled roofs and left about 268,000 customers in the dark.
Cline said property owners should review their policies before disasters occur so they know what’s covered and maintain an inventory of appliances and high-value items in their homes.
“We used to say get smart about insurance – understand what your coverage needs are,” she said. “Don’t wait until the time you need to file a claim to figure out what you have in place.”