by Jo Campbell
"The insurance business doesn't give a rat's ass for your
losses. They are in it for the money," according to an area leader
in the business of manufactured homes. "A couple of big losses and
it's 'Good-bye.' That's a fact of life. Your loss is just an
irritation to them."
The insurance biz has run amuck; we all know that. Its latest outrage, however, hits many shore residents where they live -- literally. Some experts think we can do something about it.
Foremost, an insurance carrier active in the mobile-home insurance market on the shore paid heavy claims after the Florida storms, admits Susan Robinson, president of Beacon Homes of Delaware. But, she added, "I don't know how big their losses are. If they are like most insurance companies, they are still very well-heeled."
Well-heeled, and planning to stay that way.
Foremost, All States, reportedly State Farm, and others are busily dumping area owners of manufactured homes, terminating their homeowners'coverage without ceremony based on a guesstimate that there are going to be storms this year; that the Atlantic shore is a risky place. Industry actions taken based on this prediction could affect as many as 5,000 owners of so-called mobile homes in at least three Maryland counties as well as others up and down the coast, according to Lowell Cochran, Executive Director of the Maryland Manufactured Housing Institute, headquartered in Hagerstown.
Folks left adrift include many of us in the Montego Bay Park of Ocean City. Foremost and their local reps Atlantic/Smith, Cropper and Deeley try to avoid panic by distributing the cut-offs a few at a time, hitting on the policies' anniversary dates.
This is good news and bad news. It keeps the industry from being flooded with desperate people all at once, petrified that their mortgages will be endangered without the requisite coverage. The trickle-out tactic also saves the companies from having to deal with a news media excited because of the outcry. Hit just a few of us and we don't outcry too much.
There are companies who continue modular-home coverage on the shore. Nine, according to Cochran.
Beacon's Robinson believes that carriers large enough to accept the risks are doing well now picking up the fallout from the retreating companies. But, if this area takes a storm hit, she said, "you can bet your sweet bippy you will see them turn around and drop folks. Then someone else will pick up.
"It is a game they play; a money game."
Nationwide is still "on your side" if you have a modular on the shore. Norman H. Cathell,Jr., of Nationwide in Ocean City said that his company's size and scope make the mobile home risks acceptable, even in the flood plains. Foremost, on the other hand, does not have comparable range and robust resources.
That accounts for the spectacle of Foremost, a pioneer in mobile coverage, going -- as Robinson described it -- "belly up" in the field. Cochran chuckled as he said that Foremost has even withdrawn its membership in the Maryland Manufactured Home Institute.
It is part of the "money game," familiar to anyone who has insurance of any kind: automobile, hospitalization, home. Clients all know that insurers hate more than anything else doing what they contract to do. They hate paying claims.
Actually, insurers contract to stand READY to pay claims. They willingly take from you thousands in premiums through the years. Many companies drop clients for having the nerve to file any valid claim. Robinson told of a couple she knows whose home was destroyed by fire. Their insurance company of 42 years, dropped them immediately after paying the claim. Why were they not willing to take money for another 42 years? Who knows?
It is ultimately gross when in the face of the mere possibility of having to pay a claim, they "Take the money and run!" leaving policy-holders without the protection you've been paying for. And as they run into the sunset, they will say they have been ready to do their jobs.
But they are not ready just NOW!
There is another realm of suspicion. Insurance companies which have provided homeowners' policies for manufactured homes near "hurricane-sensitive" areas are canceling in the possible hope that the residents will panic and leave them, not realizing that part of their coverage is sacred.
Flood insurance can't be canceled, according to FEMA spokespersons. It's a Federal Program and is inviolate. Mobile-home owners, therefore, should not allow themselves to be panicked into a stampede away from area insurers which are canceling standard homeowner coverages. Flood insurance is still in place - unless the client abandons it. The insured should tell the carrier, okay, you've canceled my homeowner's policy. Send me my policy as it concerns flood insurance.
"And if they have any problem with that," said FEMA's Sandra Ruffin, "Have them call us."
The Maryland Insurance Administration, acknowledges unhappily that their role is basically one of allowing the insurance companies to set their own rules.
Giving the companies permission to do pretty much what they ask to do, said Insurance Analyst Anne Christ "is not something the commissioners are very happy about, but there is not too much we can do."
Their hands are tied at the Maryland Insurance Administration, said Christ, "We cannot force companies to grant coverage for mobile homes."
The MIA does not keep stats on abandoned home owners, said Christ (pronounced Krisst), but she has had a lot of calls about the companies which are no longer writing mobile home policies.
We, the people, need to get mad and not stand for it anymore, in the opinion of industry and government spokespersons.
"Write to your local council or state representatives," is Christ's first suggestion to the callers. "These are the people you elected to advise you when you're having problems. Let them know that they need to look into this and maybe come up with some ideas to help accommodate you. Let them know you have problems with this."
There is a need for some curbs on the insurance industry, in the opinion of the MIA insurance analyst and also of Lowell Cochran. The latter believes that public outcry could provide the MIA with sharper teeth in governing the out-of-control carriers.
"You have some active, responsive legislators in that area," he said. "This is a high-dollar issue!"
Christ also suggested that citizen groups might form a coalition to press for strong governing legislation to bring the industry under better control.
Where do we go to enlist?
Places to "Raise Hell!"
According to Lowell Cochran:
Maryland Insurance Administration -- 1 410 333 2521
Community and Housing Development (Crownsville) -- 1 410 514 7200
Senator Lowell Stoltzfus in Princess Anne -- 1 410 651 3886
Delegate Bennett Bozman (Assistant: Henrietta) 1 800 492 7122 xt 3431
June 16, 1996 Jo Campbell Ecotopics International News Service