Blizzard 2010: A First Encounter

The East Coast blizzard has left thousands of passengers looking for a way to get home from the holidays. I was one of them.

My family’s return flight early Tuesday to Newark from New Orleans was cancelled. The earliest the airline could rebook us was nearly a week later.

Not wanting to wait out the delay, especially with an infant, in either the airport or a local hotel, we chose – at our own  expense – to rent a car and drive home.

Here’s a tally of the costs involved:

One-way rental car: $400

One night hotel: $100

Gas: $200

Meals: $75

Two extra days parking (for our own vehicle) at Newark airport: $40

Two extra nights boarding for our dog: $120

Refund from airline for half fare: -$200

Grand total: $735

As many displaced travelers are being reminded, airlines are not required to compensate you for hotel/transport/food costs in the event your flight is delayed due to bad weather.

Looking at the blizzard-related costs to our family has us reevaluating the need for travel insurance, especially when taking a trip during the winter months. But are such policies worth the extra cost?

A Wall Street Journal article earlier this year discussed this very dilemma, quoting I.I.I. president Dr. Robert Hartwig who was stuck in London for a week due to the eruption of the Iceland volcano.

The bottom line is that travel insurance can provide some useful protection. Check out this I.I.I. video to find out whether it’s right for you.

East Coast Blizzard

With blizzard warnings in effect for coastal New England including New York City and the eastern half of New Jersey  Sunday and Monday  now is a good time to visit our facts and stats on winter storms.

Insurance Information Institute (I.I.I.) research shows that winter storms result in about $1 billion in insured losses annually and are the third largest cause of catastrophe losses, behind hurricanes and tornadoes.

Melting snow can inflict significant damage to property. From 1990-2009 winter storms resulted in about $25 billion in insured losses, according to ISO.

As  residents and businessowners start to dig out from the snowstorm, the good news is that standard homeowners policies cover winter-related disasters such as burst pipes, ice dams, and wind damage caused by weight of ice or snow, as well as fire-related losses.

Check out the I.I.I. website for claims filing information and  further  I.I.I. information on winter weather preparation.

Legal Experts Wrap Up 2010

Legal decisions can have a big impact on insurance coverage and insurers, and as the year comes to a close there are several not-to-be-missed round-ups penned by the legal experts.

Attorney Randy Maniloff of law firm White and Williams LLP offers us the 10th anniversary edition of the year’s most significant insurance decisions with Endurance Coverage 2010: The Year’s 10 Most Significant Insurance Decisions.

Maniloff’s accompanying 3rd annual Coverage for Dummies special report adds to the holiday entertainment with its collection of examples of the shocking behavior that causes injury, followed by the filing of a lawsuit and then an insurance claim.

Meanwhile if you’re seeking an insurance professional’s take on the holiday classic ‘Twas the Night Before Christmas, look no further than Coverage Counsel blog, where editor Roy Mura  gives us  the risky  version of this well-known poem.

Happy holidays to all our readers!

Growth Ahead For P/C Insurers

There is now a good chance the property/casualty insurance  industry will show positive premium growth in 2010 – the first such growth since 2006, according to I.I.I. president Dr. Robert Hartwig.

Dr. Hartwig’s upbeat prognosis came in his commentary on the industry’s 2010 first nine month results:

Premium growth data for the third quarter appear to confirm that the era of mass exposure destruction in the property/casualty insurance industry is finally over, with demand for insurance now beginning to stabilize and recover in the aftermath of the “Great Recession.†

It is now all but certain that the P/C insurance industry will record positive growth in 2010—the first since 2006.†

Net written premiums were up 2.3 percent in the third quarter of 2010  Ã¢â‚¬“ the first back-to-back quarterly growth since the first quarter of 2007.

Combined with a 1.3 percent decline in the first quarter and a 1.3 percent increase in the second, net written premiums were up 0.8 percent for the nine month period. As Dr. Hartwig says:

There now appears to be mounting evidence that the property/casualty insurance industry is benefitting from early-stage growth in the American economy, which is translating into insurable exposure growth.”

The industry results were just released by ISO and the Property Casualty Insurers Association of America (PCI).

The industry reported an annualized statutory rate of return on average surplus of 6.7 percent through the first nine months of 2010, much improved from 4.6 percent in the same period of 2009.

As has been the case since mid-2009, virtually all of the improvement in the industry’s financial performance came from a massive reversal in asset values, Dr. Hartwig notes.

This allowed the industry to realize $4.4 billion in capital gains during the first nine months compared to a $9.6 billion realized capital loss a year earlier.

While insurers remain cautious about the economy and financial market conditions, there is guarded optimism that both will continue to improve as the industry transitions into 2011, he adds.

Terrorism Threat Undiminished

The breaking news that a bomb was found this morning on a subway train in Rome, Italy, is the latest reminder that terrorism risk is a constant and reemerging threat.

It follows a suicide bombing attempt in Stockholm, Sweden a few weeks ago and a car bomb plot at a Christmas tree lighting event in Portland, Oregon, the day after Thanksgiving.

Next year marks the 10th anniversary of 9/11 and the cost of terrorism still looms large in United States history.

It’s worth noting that after more than nine attack-free years, the $32.5 billion in losses paid out by insurers for the terrorist attack of September 11, 2001, places second in an I.I.I. ranking of the most costly U.S. catastrophes – after just Hurricane Katrina (2005).

According to a story today on NPR, human error is a key reason for the failure of a number of high-profile terrorist attacks in the course of the past year.

NPR quotes Phillip Mudd, a former CIA and FBI terrorism specialist saying that the U.S. shouldn’t take any solace in the fact that plots launched in 2010 fell flat:

“I’m not sure why so many of them are failing, but I don’t think we should take that as success. One of these kids is going to succeed.†

Meanwhile, an article in the Wall Street Journal reports on an antiterrorism training exercise conducted by the New York Police Department in December.

The WSJ says the simulation of attacks included a series of bombings and gun attacks and was structured to mirror the November 2008 Mumbai attacks in India, when in the course of a few minutes, 10 gunmen attacked various locations in the city.

Check out an Insurance Information Institute (I.I.I.) report for more information on why terrorism risk is likely to remain a serious threat in the decade ahead.

Also check out the I.I.I. backgrounder on terrorism risk and insurance.

Securities Class Action Filings Accelerate

The number of securities class actions filed in the second half of 2010 has accelerated and  filings are  on track to exceed last year’s total, despite a decline in  cases related to the credit crisis.

The just-released annual report from NERA Economic Consulting shows that filings are projected to reach 239 cases by year’s end compared to 220 class action cases filed in 2009.

Filings related to the credit crisis fell 46 percent with only 31 such cases filed through 30 November 2010, compared to 57 filed in 2009, and 103 in 2008.

Another key takeaway from NERA is that the median settlement value hit an all-time high, jumping by more than 30 percent to $11.1 million in 2010 – the first time it has exceeded $10 million.

The decline in filings related to the credit crisis was offset by a resurgence in other types of cases, such as undisclosed product and operational defects, breach of fiduciary duties, and accounting improprieties.

Companies in the finance sector continue to be a target, NERA says, though more than half of the 2010 filings against finance sector companies appear unrelated to the credit crisis.

Check out Kevin LaCroix’s D&O Diary blog for more analysis of the NERA findings.

Repetitive Risks: Mommy Thumb and Bartender Elbow

Ok, so we’re a little late to this story, but as the proud mom of an infant measuring in the 90th percentile for height and weight, my interest was piqued when a friend asked if I’d heard about a condition known as Mommy thumb.

The Wall Street Journal recently reported of a rising number of women suffering from mommy thumb, formally known as De Quervain’s tendinitis, an inflammation of the tendons below the thumb down to the wrist.

Factors such as heavier children, lower cribs, older new moms and frequent smartphone scrolling apparently are contributing to the increase in cases.

According to the WSJ:

Orthopedic surgeons estimate that between one-quarter and one-half of new mothers experience symptoms of De Quervain’s. When common pain relievers don’t ease the inflammation, patients are getting steroid injections, splints and even surgery.†

Moms are not the only ones suffering from repetitive strains. Over at Workers’ Comp Insider blog, the focus is on repetitive motion and musculoskeletal injuries among bartenders.

It cites a recent New York Times article that highlights the elbow, shoulder and wrist injuries being reported by modern day bartenders. The demand for shaken drinks has increased the stresses and strains they face.

Workers’ Comp Insider asks:

Is bartending the new frontier for injury prevention specialists? Judge for yourself next time you are socializing at a busy cocktail lounge over the holiday season.†

Bartenders are among a long list of professionals who are feeling the effects of repetitive motions.

According to the Bureau of Labor Statistics (BLS), musculoskeletal disorders (MSDs), often referred to as ergonomic injuries, accounted for 28 percent of all workplace injuries and illnesses requiring time away from work in 2009.

Check out the impact of MSDs on different occupations and workers.

Accident Response Fees: Double Dipping

Once again, the issue of accident response fees is rearing its head after the fire department of New York City last week became the latest to propose charging motorists and ultimately their insurers for the cost of responding to accidents.

The move, while new to New York City, is not a new concept. Cash-strapped municipalities across the nation are seeking alternative revenue-generating streams.

A number of them are now billing insurers for police or fire department responses to auto accidents.

Some groups believe that these fees are necessary to maintain vital public services.

However, what municipalities may not realize is that by implementing an accident tax, they may be causing auto insurance premiums to increase.

The response to and investigation of auto accidents has long been handled by police and fire departments, supported by local taxes.

While auto insurance policies typically cover medical expenses, such as ambulance transportation, expenses related to accident response services have never been covered or charged for.

If insurers are to be expected to pay for services historically supported by local taxes, they will be forced to factor this into the cost of their auto insurance policies. In other words, premiums will have to rise to account for the additional cost component.

So, residents who are already paying for these services through local taxes will be forced to pay again via higher insurance premiums. Many view this as double dipping  0r a form of double-taxation.

The good news is that some state legislatures have already moved to ban municipalities from charging accident response fees. At last count, 10 states ban them.

A public hearing in Brooklyn, NY on January 14 is likely to see heated debate on the FDNY proposal.

Check out I.I.I. information on accident response fees.

FEMA Launches Blog

The Federal Emergency Management Agency (FEMA) has launched a blog.

In its first post, FEMA administrator Craig Fugate says the blog is another interactive tool for FEMA to use to communicate.

FEMA is already on Facebook and Twitter.

According to Fugate:

You’ll eventually hear from team members from across our agency, from our regional offices to our field offices, supporting local disaster recovery efforts. We will provide information before, during and after disaster strikes and we will highlight best practices, innovative ideas, and insights that are being used across emergency management and across the country.†

Many government agencies have blogs. The FEMA blog adds to a growing list and is likely to become a must-read when it comes to disasters and related info.

Judicial Hellholes Now Online

The American Tort Reform Association (ATRA) has just released its latest Judicial Hellholes report and an all new Hellholes website.

The ninth annual report names civil courts in Philadelphia, Pennsylvania; California’s Los Angeles and Humboldt counties; West Virginia; South Florida; Cook County, Illinois; and Clark County, Nevada as some of the worst in the nation.

ATRA notes that many of the jurisdictions cited this year have been cited before and remain hostile to reform efforts. Not coincidentally, the local or state economies in many of these jurisdictions also have suffered more than most during the latest recession, according to ATRA.

The report also calls attention to several additional jurisdictions that bear watching for suspicious or negative developments in litigation, or for their histories of abuse.

On this year’s watch list are: Madison County, Illinois; Atlantic County, New Jersey; St. Landry Parish, Louisiana; District of Columbia; New York City and Albany, New York; and St. Clair County, Illinois.

Other areas to watch include the Gulf Coast of Texas and McLean County, Illinois, according to ATRA.

The new Hellholes website will provide year-round updates and analyses of civil justice developments, all of which can be followed on Twitter.

Check out I.I.I. information on the liability system.