Auto Industry is Hurting Folks. How Are You Feeling It?

[InsCommentary]

From a risk management consultant and expert witness:

"Sit in on self-insured health plan, health insurance companies, and property/casualty subrogation sessions. The subrogation folks will follow an individual to the end of the earth, for their entire lifetime, and take whatever they accumulate, inherit, earn, etc.

"Example: A couple passed away and the adult children expected to inherit their parents' home. State Farm had an unsatisfied UM/UIM claim lien going back decades when one of the kids was involved in a serious auto accident and the limits were inadequate. State farm attached a lien on the home and waited. "

 

[insurance1822]

...and we should all buy extended warranties, disability insurance, cancer insurance, long term care insurance, major medical, accidental insurance, maintenance contracts on our HVAC.

I don't commentate on insurance, I live it. What you described is the exception & not the norm. If the parent's insurance paid the claim, it would have included a waiver for any future liens etc. If it was UIM...that means the parent's insurance would have paid something & no lien.

If it was UM...the parents did something really stupid & let their insurance lapse OR their carrier denied the claim for some other reason which would be the insured's failure to disclose something etc.

...No umbrella would help there.

Scare tactic.

 

[mplsmm]

I have a good friend in Florida that works for one of those PI lawyers with a bunch of billboards and commercials. Her only job is to get money for accident victims. She goes to some extreme lengths and some of her wrangling is crazy.

I just recently had an upset guy whose rates had gone up a lot. I am pretty new and he wasn't my customer but I tried to service him. His 18 yo had hit someone that is still in a coma. It was like he didn't even know, he was told there was property damage of 3k but no one mentioned we had paid out 100k on BI already. I asked claims, they said most people don't get that info?? She said he would probably be getting sued for the rest but our part was done, how can it get that far and the insured doesn't know? I broke the news but he didn't seem to care, it was like, yeah so, too bad for him but why is my rate going up?

 

[nyc2phi]

I love these carriers shocked that auto is killing them.. auto has been a loser class for as long as I have been in this industry, which will be 28 years in May. as soon as the slightest sign of profitability they gut rates. ONLY way to make money in auto is A) right statutory limits and NO UM/UIM and B) aggressive claims handling. And have to stay out of the usual suspect areas that are bad and always will be bad: Florida (particularly south FL) , NY, and Michigan because of the PIP laws.

I started in NY, writing auto in NY (and some commercial) was the worst thing I ever did for my book of business. I concur your statement.

 

[insurance1822]

I started in NY, writing auto in NY (and some commercial) was the worst thing I ever did for my book of business. I concur your statement.

How so? Is Erie competitive in NY? Just bad loss ratios?

 

[Matt37]

How so? Is Erie competitive in NY? Just bad loss ratios?

Yup.. NY, FL, MI, CA .. always have been losers for auto and always will be.

I remember sitting in with our actuaries and actuaries are like the opposite extreme.. they will tell you need to get 30% increases even when your book is fairly clean.. they are super conservative.

But I remember when our FL book was struggling on the commercial side the actuary told me from an actuarial data standpoint you need to get between $4500-5000/unit to maintain auto in Broward and Dade County for any commercial auto risk.

NYC is probably worse with their no fault laws, etc.

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I have a good friend in Florida that works for one of those PI lawyers with a bunch of billboards and commercials. Her only job is to get money for accident victims. She goes to some extreme lengths and some of her wrangling is crazy.

I just recently had an upset guy whose rates had gone up a lot. I am pretty new and he wasn't my customer but I tried to service him. His 18 yo had hit someone that is still in a coma. It was like he didn't even know, he was told there was property damage of 3k but no one mentioned we had paid out 100k on BI already. I asked claims, they said most people don't get that info?? She said he would probably be getting sued for the rest but our part was done, how can it get that far and the insured doesn't know? I broke the news but he didn't seem to care, it was like, yeah so, too bad for him but why is my rate going up?

and this is why FL is a nightmare.

 

[nyc2phi]

How so? Is Erie competitive in NY? Just bad loss ratios?

Yes majorly under priced in NYC when I was there. I'm sure things have changed.

Loss ratio has caught up now that I have a decent book with them but that hurt me in the early years

 

[insurance1822]

might be a dumb question...but if carriers aren't making money then why are they in those states?

 

[lukifer]

might be a dumb question...but if carriers aren't making money then why are they in those states?

Our P&C ops people say it's to have a better draw to the homeowners market to allow bundling. Country was -2% in our state, but Home was very profitable.

 

[bobson]

...and we should all buy extended warranties, disability insurance, cancer insurance, long term care insurance, major medical, accidental insurance, maintenance contracts on our HVAC.

Who would waste money on disability insurance? I've never met anybody that was disabled before. I'm not even sure how one suffers a disability anymore? We've cured all the big diseases I think and accidents don't happen.