Vt. Mold Bill Not
Growing into Problem
MONTPELIER, VT. — The Vermont Legislature’s Senate Committee on Finance last week considered a bill that would require insurers to provide insurance coverage for mold contamination in residential property.
Price of Health and Legal
Services Hit P/C Costs in 2009
Consumer Product Prices Dropped
But Not for Items Insurers Pay For
However, industry representatives say that though the bill’s provisions would have been problematic for insurers, the threat seems to have been defused. Introduced by Sen. Harold Giard, the bill was prompted by the situation of a single constituent who had to deal with an unresponsive landlord and mold issues. By the end of last week’s hearing, the Committee appeared convinced that there are non-insurance remedies available to the constituent, according to at-tendees. In this instance, the mold was the result of poor maintenance, not a sudden event that caused mold damage.
NEW YORK CITY — The costs of the nation’s healthcare and legal services rose anywhere from 3% to 6% in 2009, even as the annual consumer price index (CPI) dropped 0.4%, thereby driving up the cost of doing business for the nation’s property/casualty (P/C) insurers, an Insurance Information Institute (III) analysis recently found.
“Auto and workers compensation insurers are sensitive to hospital, physician and legal service fee increases, and every single one of those items cost more in 2009 than they did in 2008,” said Dr. Steven Weisbart, the III’s chief economist. “This is particularly notable in a year when the overall CPI actually decreased, something which hadn’t happened in the United States since 1955.”
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Hospital service prices increased 6.4% in 2009, according to the federal government’s year-end CPI report, while the fees for physicians’ services and legal services also moved upward, by 3% and 2.7% respectively. Drilling it down even further, the cost of a new car increased only 0.9% in 2009 over 2008, but over this same time frame auto body repair shop prices grew by 3.2%.
“It’s not really an insurance issue they want to bite off right now,” Michael Bertand of the Vermont Banking, Insurance, Securities, Health Care Administration (BISHCA) told The Standard. He noted that BISHCA and the insurance industry were concerned about the implications of the bill, but it is not likely to be approved.
NEW YORK CITY — The Risk and Insurance Management Society (RIMS) expressed concern with two proposals that the group says could be detrimental to commercial insurance consumers the Obama Administration’s budget proposal.
The bill would have required insurers to offer coverage for the costs of remediation for mold contamination. It also included a provision that coverage provided to landlords should include coverage for mold damage to tenants’ personal property.
For the second consecutive year, RIMS noted, the Obama Administration has recommended reducing or eliminating the federal underpinnings of terrorism insurance. “The Administration’s proposal to eliminate $250 million is regrettable and disappointing, from the consumer perspective,” said Scott Clark, RIMS secretary and director of RIMS External Affairs Committee and risk and benefits officer for Miami-Dade County School Board.
Bertrand said that Vermont already has requirements for mold coverage. Insurers must offer coverage for mold arising out of a covered loss, up to $10,000 for personal lines and $15,000 for commercial property.
“In 2007, Congress reauthorized the Terrorism Risk Insurance Act (TRIA) for a seven year period. TRIA and the federal government’s commitment to act as the ultimate backstop for terrorism insurance served to stabilize the market for policy holders,” Clark added. “This legislation was the product of much negotiation and compromise from all political parties, chambers and branches of government. To attempt to withdraw the government’s support will adversely impact the availability and affordability of terrorism insurance. We hope that Congress will once again see the wisdom in not adopting this as part of its budget going forward.”
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John Hollar, an attorney with Downs
Rachlin Martin, spoke at the hearing
on behalf of the American Insurance
Association. He said that by the time
Clark also noted that a proposal contained in the Administration blueprint
would impair the insurance market for individual and commercial insurance
policy holders. The2011 budget appears to adopt, in concept, legislation intro-
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