honoluluadvertiser.com

Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser
Posted on: Wednesday, September 3, 2003

No hike in hurricane insurance expected

By Deborah Adamson
Advertiser Staff Writer

Hurricane insurance rates, which already went up this year, won't be raised again as a result of Hurricane Jimena since it did little damage after passing the southern tip of the Big Island last weekend, insurers said.

"My impression is it won't have any effect whatsoever," said Steve Tabussi, vice president of customer solutions at First Insurance.

Big Island residents had been bracing for the hurricane's impact, since the weather system could change direction and inflict more damage than expected. But Jimena weakened into a tropical storm at 5 a.m. Monday morning and later passed 120 miles off South Point.

"In order to raise rates, you have to justify it by losses or reinsurance costs," said Jim Gormley, vice president of underwriting at DTRIC.

Thus far, Jimena hasn't resulted in many claims, insurers said.

As of midday yesterday, Tabussi said he wasn't aware of any Jimena-related claims filed, although First Insurance might get a few later.

State Farm, Hawai'i's largest homeowners insurer, said it hadn't gotten any claims thus far and doesn't plan to increase rates based on Jimena.

The insurer had stopped accepting new customers days before Hurricane Jimena arrived, since it's like "buying auto insurance after you get into a car accident," said spokeswoman Carolyn Fujioka.

Fujioka noted that a single event does not by itself cause a rate hike. Rather, State Farm considers the overall risk profile of an area, which may or may not change in the aftermath of a natural catastrophe.

"Hurricane rates are determined by calculating risk over a period of time," Fujioka said.

This year, State Farm raised hurricane insurance rates by an average of 40 percent although policy holders can pay in installments. Last year, USAA, First Insurance and Liberty Mutual raised rates anywhere from 20 percent to 50 percent.

Reach Deborah Adamson at dadamson@honoluluadvertiser.com or 525-8088.