Insurance Crisis Creeps North

Alabama Mobile Rising rates and skyrocketing premiums are beginning to effect homeowners further north.

by Jessica Taloney

Published: Wed, July 23, 2008 - 8:55 pm CST

Grady Gibson just didn't think it would happen to him. "I thought, well, I've been with them this long. They're probably not going to mess with me," said Gibson.

His West Mobile home near Cottage Hill Road has been insured with the same company for 46 years, but earlier this month he received a letter from AllState saying if they decide to renew his policy next November, his hurricane deductible will jump from 2% to 5%.

"They kept saying three or four times in the letter that's if we decide to renew you, if we decide three or four times. It was just bad," he said.

Grady is not alone. Customers of State Farm Insurance will see a similar deductible increase, as well as a significant premium hike. Tuesday, the insurance giant received approval from the Alabama Insurance Commissioner to raise their rates.

Over the next two years, customers living as far north as the 31st parallel, which includes Creola, Bay Minette, Saraland and Satsuma, will see a 12 to 18% increase in their premium, and their deductible will jump to 5%. The company also plans to cancel wind coverage for 700 customers.

Mobile Senator Ben Brooks says he saw this coming. "I and some others have been warning for some time that if this problem isn't addressed in the southern part of the county, we're going to see it start to creep northward in Mobile and Baldwin Counties," says Brooks, who spent the entire last legislative session fighting for insurance reform for the Gulf Coast.

Brooks says he and Sen. Tripp Pittman of Baldwin County immediately began working on more legislation to address hurricane deductibles and raising rates after State Farm's hike was approved Tuesday.

Meanwhile, a State Farm spokesperson says customers elsewhere in Alabama will see their rates drop by an average of about 1%.

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Opinionwriter Says:

Thu, Aug 07, 2008 at 12:20 pm

I’ll just move to Birmingham eventually if this gets much more out of control for North Mobile. Typically those close to the water would bear the brunt of insurance hikes, but people who live on the water typically can afford it along with a second home in the mountains. However this is now affecting the regular folks in regular neighbor hoods with average income. Big insurance rate hikes reduce property values as the total cost of ownership goes up compared to other typical homes in the state. Our homes are not located in the touristy locations where property values rising exponentially despite insurance costs. Our home values must compete with other regular homes in the state and are beginning to see a cost disadvantage due to insurance. Just my $.02.

southfan1981 Says:

Wed, Jul 23, 2008 at 9:51 pm

They just don’t want to make due with the losses we have all suffered. What a crock! I’d like to see some of their Big Guns getting by on the average family income for our area. See how glad we are we met yah?