Insurance report card: E isn’t for ‘excellent’ (concl.)

In our last post, we were talking about the fate of Florida’s homeowners insurance report card. Mandated by a 2007 law, the report card was intended to be a tool for Florida homeowners to compare insurance companies using just a few key measures. After years in development, the first report card was completed in December.

Among the many complaints from insurance companies is the fact that the ratings are based on 2004-2005 data. Some legislators back the insurance companies up, saying that the government has no business judging private companies. Said one Representative, “A, B, C, D — those are grades that you would give a fourth-grader.”

Others have complained that the law itself is vague and, so, cannot be implemented. It provides no definitions, little guidance and plenty of reasons for insurers to oppose it.

There are rumblings, too, that insurance companies and pro-insurer legislators don’t want the report published because they don’t like the findings. The report showed that one-third of Florida’s insurance market, or 2.2 million of the state’s homeowners, are insured by companies that received the lowest grades.

Consumer advocates and legislators who favor the report card say that Florida consumers will lose an important tool if the report card is done away with. “Price and service are the two things people need to look at.” Another added that there is nowhere else for consumers to find an apples-to-apples comparison of insurance companies.

The report card will not be released. Before the final product could be released in December, the Florida Cabinet warned the Insurance Consumer Advocate — the office pulling the project together — it would reject the report.

The House has already voted to kill the report card. The Senate bill hasn’t made it through committee yet.

Source: Herald-Tribune (Sarasota, Florida), “State insurers graded on how they handle claims,” Paige St. John, 03/28/11

Share