CrackInsurance

I spend a lot of time criticizing insurance companies when I think they’re making life overly difficult for their customers.

It’s only fair, then, that I throw these insurers a compliment when they do something good.

So here goes: New York Life Insurance Company employees contributed more than 50,000 volunteer hours in May as part of the insurance giant’s Global Month of Service. You can read all about it in this report on MarketWatch.

New York Life designated May as its first Global Month of Service. According to the company, more than 3,500 employees and agents volunteered in their local communities. These employees and agents worked on more than 200 community projects in eight countries.

In New York City, for example, volunteers worked with Big Brothers Big Sisters, the Bereavement Center of Westchester, Junior Achievement and New York Cares. Volunteers worked on literacy projects, led educational field trips and organized and staffed community fairs for students.

Now, I’m sure many of the company’s insurance agents and employees weren’t happy with committing all this volunteer time. But there’s a thing about volunteering: It might not be fun while you’re doing it, but after you’re done, you sort of feel great. And I’m sure more than a few New York Life employees had this feeling.

It’s inspriing to see an insurance company commit so many resources to volunteering. Now let’s hope that other companies — and I’m sure many already have — follow New York Life’s lead.

We can all agree that every driver should have auto insurance, right? Unfortunately, this isn’t always the case. And with today’s terrible economy, a growing number of drivers are hitting the roads without auto insurance. Many drivers just can’t afford the premiums.

This is bad news, especially if one of these drivers should happen to smash into your car when your stopped at a red light. It’s inspired some states that did not force drivers legally to take out auto insurance to take action. In Wisconsin, for instance, the state’s new budget includes a rule that every Wisconsin driver have auto liability insurance. By July of 2010, every driver in Wisconsin will be required to have this insurance.

This news came as a surprise to me. I just figured that every state already required drivers to have auto insurance. Turns out that wasn’t the case. Of course, after July of 2010, just one state, New Hampshire, won’t make owning auto insurance a legal necessity.

Of course, the Wisconsin state government didn’t do everything right. The legislature also raised the amount of liability insurance. This increase will happen in January. Critics rightly point out that now everyone will have to pay more for their auto insurance.

This wouldn’t seem to be the best time to raise auto insurance rates, what with the unemployment rate in the nation at 9.4 percent and in Wisconsin at 8.7 percent.

The public, in many polls, have expressed support for a government-run alternative to traditional private health-insurance companies. The Democrats in Congress are working on such a plan.

But Republicans aren’t the only ones worried about a government-run option. According to a feature story in the USA Today, small business owners are worried, too.

The USA Today story cites a chilling report from the Congressional Budget Office that says that 15 million workers could lose the health-insurance benefits they receive now under a Democratic proposal now being considered in Congress. The reason? Many small business owners would, though a fairly complicated chain of events that you can read about in the USA Today story, decide it’d be more cost-effective to drop the health-insurance plans that they offer to their workers.

This, much more than the partisian bickering between Republicans and Democrats, is what should give thinking people pause when considering health-insurance reform. Yes, the current system is broken. Yes, insurance companies are hated by the general public for sound reasons.

But is the alternative now being debated in Congress going to hurt others while helping some? Will we just be swapping the system’s current problems for a series of new ones?

These are tough questions. And it’s hard for me — and probably for you — to put my faith in the government to get to the right answers.

Drivers in California may soon have the option of paying for their auto insurance by the mile. Yes, it’s a bit like paying for cell phone use by the minute, as the Los Angeles Times points out.

California’s state insurance commissioner proposed the pay-as-you-drive measure late last week. It’s an effort, he said, to allow state drivers to cut the cost of their auto insurance by driving less. This would be important on some of the state’s more congested highways.

The proposal is open for comments until July 9. If all goes well, the new insurance regulations could take effect by the middle of November, according to the Los Angeles Times story.

Pay-as-you-go plans are gaining in popularity. The Times story says that 34 states have passed some form of them. Many drivers would save money by signing up for one of these programs. Others, though, with long commutes to and from work probably would end up paying more by signing up to a pay-as-you-drive program.

Regardless, these are great programs to offer. As a person who sometimes rides his bike to the train station on his way to work, I’m in favor of anything that encourages people to drive less. If this program does that in California, then I’ll consider it a success.

It looks like State Farm Florida will stop writing property insurance policies in the state of Florida. That became clear shortly after Florida’s governor, Charlie Crist, last week vetoed legislation designed to encourage large property insurers to write policies in Florida, according to a story in the Miami Herald.

House Bill 1171, which Crist vetoed, would have made it less difficult for large insurers to raise their customers’ premiums. This has been a bone of contention on State Farm’s part: Officials with the insurer say that the state is not letting them charge realistic rates that cover storm losses in Florida, losses that can be significant in this hurricane-ravaged state.

State Farm, because of this issue, plans to gradually withdraw from Florida.

Of course, the one group of people who will suffer the most because of this debate are homeowners in Florida. They can still get homeowners insurance, of course. But they won’t have as many options.

It’s a tricky situation in Florida. The state gets so much severe weather, insurers are often called upon to cover big losses. At the same time, because of this severe weather, homeowners need insurance more than ever.

It’s unfortunate that State Farm and the Florida General Assembly haven’t been able to work out a compromise solution. I say “unfortunate,” not “surprising.” It seems that insurance companies and state legislatures rarely work well together. That’s too bad for anyone who owns a home or business in Florida.

The recession has caused consumers to change their spending habits in ways both big and small. This includes how they shop for auto insurance.

According to Bloomberg News, only 28 percent of customers sought a new auto insurance company in the 12 months ending in March. That’s down from 36 percent during the 12-month period immediately one year earlier, according to a study by J.D. Power and Associates.

The study’s authors say there’s a “hunker-down” mentality out there now, where consumers are content to stay with the insurer they already know. The study showed that 90 percent of customers stay with their current auto-insurance provider.

The Bloomberg story also mentioned the fact that auto insurers are reducing their premiums in many locations. This may play a part, too, in encouraging policyholders not to shop around.

However, not all auto-insurance providers are experiencing the same trend. Geico Corp. and Progressive Corp. both saw gains in new customers in the first four months of 2009. Geico added 505,000 customers in the beginning of this year, according to the Bloomberg story, while Progressive added 242,200 new customers.

Again, though, both Geico and Progressive are known for their low rates. Perhaps that explains why, in this recession-wracked economy, both insurers have seen such sizable boosts in new business.

It looks like the cordial discussion between the Obama administration and representatives of the private health-insurance industry are over. As the debate over health-insurance reform intensifies, officials with the private health-insurance industry are spending more time decrying a possible government-run health-insurance plan.

Such a plan would be unfair competition to private insurers, they say. They predict a day when scads of private insurance companies go out of business. Pres. Obama, on the other hand, argues that a government alternative would discipline private insurers, and force them to offer better service to keep their clients.

During the debate, Obama has asked an intriguing question: Why do private insurers so fear a government-run program? Obama mentioned that private insurers have long maintained that government could never run an effective health-care system. If this is the case, Obama has asked, why are these private insurers so fearful that a government that can’t do anything right would put them out of business?

You have to admit, it’s a pretty good question.

Here’s one possible answer: Private health-insurance companies realize that the majority of the public hates them. People hate having to jump through so many hoops every time they see a physician. They hate how often they have to argue with rude insurance workers to receive coverage for their medical treatments. They don’t like rules — like the much-discussed fact that insurance companies usually charge women more than they do men for equal coverage — that seem arbitary, at best.

Simply put, people don’t like health-insurance companies. Recent polls show that a majority of people would prefer to see a government-run health-insurance option. You know your industry isn’t well-liked when people actually think something run by the government is a good option.

What happens now? Who knows? But a government-run plan, despite the fierce opposition of private insurers, seems more and more likely. Then we’ll see just how much the public dislikes insurance companies.

It’s hard for people to pay those medical bills when they’ve lost their job. And COBRA coverage is too expensive for many laid-off workers.

In Illinois, though, fired or laid-off workers have finally caught a break from their state government. According to a story in the St. Louis Business Journal, Illinois Gov. Pat Quinn signed a bill into law last week that will make health insurance more affordable for fired employees who formerly worked for small businesses.

The Illinois legislation is a sort of add-on to the federal government’s American Recovery and Reinvestment Act. That act gave a financial break to laid-off or fired employees of companies with 20 or more employees by providing them with a subsidy. This subsidy cuts the cost of COBRA by 65 percent.

The Illinois bill, though, provides the same COBRA break to employees who were fired from companies that have less than 20 employees.

I don’t often applaud politicians. And it’s rarer still that I applaud those from Illinois, my home state where political corruption — Hello, Rod Blagojevich, George Ryan, Roland Burris and Mayor Daley! — reigns supreme. But this bill is long overdue.

It’s never made sense that COBRA is so expensive. Fired workers need cheaper insurance, not insurance that’s more expensive. And there’s even less reason why employees fired from smaller companies don’t deserve the same financial breaks as those who’ve lost their jobs from bigger companies.

Maybe it’s just Republican legislators who are out of touch: According to a New York Times/CBS News poll, U.S. residents strongly support a government-run health-insurance program that would compete with those offered by private insurers.

A national survey found that 72 percent of respondents favored the idea of a government-run health plan that would take the form of a Medicare plan for those under the age of 65.

Maybe most surprising, half of the poll respondents who said they considered themselves to be Republican also supported the government-run health option.

Meanwhile, Republicans in Congress have steadfastly opposed a government-run health-insurance option, saying that such a plan could eventually lead to a system of nationalized health care and the rationing of health care.

Republicans also say that a government-run program could put some health-insurance companies out of business.

This is one instance when a political party seems to be completely out of touch with the public. Voters overwhelmingly supported Barack Obama last November in the presidential election. It stands to reason that these voters were seeking a change in the way the health-insurance industry operates. OBama, after all, made health-insurance reform one of his central issues.

Will we see some form of government-run health insurance for those under 65 in the near future? It’s beginning to look more likely. The public is already behind this. What’s taking Republicans so long to at least offer a workable compromise?

What do customers want from their homeowners insurance? It’s pretty obvious: They want low rates and top protection.

Homeowners who live in Idaho, Arizona, Utah and Vermont get just this, according to a study by the Heartland Institute and the Competitive Enterprise Institute.

All four of these states earned “A” ratings from the report. Homeowners here pay less in premiums than do those in other states, and they also receive high-quality coverage.

Not all homeowners were as fortunate, of course. The states of Florida, Hawaii, Massachusetts, New York, Louisiana and Maryland each earned “F” marks in the study. This is because homeowners here pay higher rates than do most other homeowners while, at the same time, receiving insurance that is inadequate when compared to that offered in other states.

Many consumers consider homeowners insurance a necessary evil. And I imagine that those homeowners in, say, New York and Florida, will consider it especially evil if they read the results of this report.

Homeowners have the right to expect quality homeowners insurance. If they’re paying higher rates than are homeowners in other parts of the country, they should at least expect to receive insurance that isn’t considered “inferior.”

Hopefully, the study is a wake-up call to those companies providing homeowners insurance in F-rated states. It’s time for them to improve their product.