Enlarge Video 
Download Video
Video RSS
Insurance Crisis Creeps North
By Jessica Taloney Reporter
Published: Tue, May 13, 2008 - 5:55 pm
Last Updated: Tue, May 13, 2008 - 8:23 pm
Last Updated: Tue, May 13, 2008 - 8:23 pm
Jessica Taloney
When Joe bought their 3000 sq. ft. home in Daphne's Lake Forest Subdivision, he didn't have any problem paying the mortgage. They could afford the house and the insurance that came along with it. Then, several financial setbacks had the couple pinching pennies, and the last thing they needed was a big blow from their insurance company.
"You feel almost ashamed that you're in that kind of situation. I'm somewhat ashamed. I'm supposed to be the main provider of my family and I may not be able to provide for us," said Klingensmith.
Five months ago Joe and Mary received a letter from their mortgage company, informing them their insurance premium was increasing from $1800 a year to $3700. Since then, they've scrambled to make ends meet, juggling bills from one credit card to another. Debt is piling, and creditors keep calling.
Cancellations/ Non-Renewals Since Hurricane Ivan:
Mobile and Baldwin County
- Alfa: 4,600 (1/2 commercial, ½ residential)
- State Farm: 2,700 (2400 condo, 300 residential)
- AllState: 10,250 (approx. 7,000 residential)
- Others: 500
Since Hurricane Ivan struck the Gulf Coast in 2004, more than 18-thousand families have found themselves in a similar position. Most of the families live South of Interstate Ten.
But, at the same time that insurance companies claimed high risk forced them to drop coverage here, property insurers enjoyed record high profits.
Alabama insurance commissioner Walter Bell is a Mobile native, and he says he's sympathetic of the problems facing Gulf Coast homeowners... But, finding an answer isn't easy.
"I get it all the time. If they don't write down in Mobile and Baldwin County, they shouldn't write in any part of the state. That's just not a real market solution," said Commissioner Bell, referring to hundreds of phone calls and letters received by his office.
So, what is the solution? And, who's willing to step up and make it happen? For Mary and Joe, time is running out, and the American dream of owning a home is turning into a nightmare.
Rate Filings Since May, 2007
- 34 companies filed to change homeowner rates (27 increases, 7 decreases)
- 1 company filed to increase condo rates
- 13 companies filed to change mobile home rates (12 increases, 1 decrease)
Rate Filings Since May, 2002
- 86 companies filed to change homeowner rates (58 increases, 17 decreases, 7 neutrals)
- 1 company filed to increase condo rates
- 15 companies filed to change mobile home rates (14 increases, 1 decrease)
News Map
Email to a Friend 
Printer Friendly 
I have lived in LA since Feb 2005. My first ins company covered my home in Gulf Shores for about $1900.00 with no hurricane deductible. During the first year I was hear they sold their premium to Cotton States. The next year Cotton States raised my rates by 50%. During that year they informed us that wind and hail would not be covered in subsequent years. Now we don’t have wind and hail and we have not been able to get anyone to write the coverage.Three miles north of the gulf with high ground and many trees for wind breaks and no one will write coverage. The bank that hold sthe mortgage is going to be somewhat disturbed. When if ever will the legislature get a fix going......Dan Daly