Claims of insurers’ bad faith

Bravo, David Lazarus! Great information about Comprehensive Loss Underwriting Exchange (“Insurance claims could haunt houses,” Oct. 24) and the nasty little secret about how homeowner insurance rates are determined.

About five years ago, my insurer doubled my homeowner policy, claiming that hail damage claims were excessive in my area, Walsh County, North Dakota, even though I had never submitted a claim of any type during my 26-year association with the insurer. A little research revealed that nearly all carriers were using the same rate algorithm with data provided by ChoicePoint (which maintains CLUE).

All across the country, insurance companies of every sort have attempted to reduce their risk by increasing rates, dropping customers who submit claims and, as a final insult, denying legitimate claims. If there ever was a definition of a “criminal enterprise,” the modern American insurance industry fits the bill!

Carl Schellenberg

Adams, N.D.

No, it’s not “patently unfair” that property insurance premiums reflect loss histories of the property. Insurance companies are not charitable institutions. The premium reflects the rate of risk. If a home has had claims, all [insurers] need to know.

Homeowners are notorious for collecting on claims but not making the repairs. So, the property is a higher risk even if the owner is new. Higher risk, higher premiums. Period.

Perhaps we ought not be building in high-risk areas, but that’s for the zoning and planning people to decide. Perhaps every property insurance policy in the entire nation ought to have a small surcharge that would go into a “disaster pool.”

Perhaps people ought to realize that owning a home is a liability, not an asset. Costs of maintenance and insurance go up as a home ages. Homeowner associations are required to project future repair and replacement costs; individuals ought to do the same before buying. But don’t blame the property insurance companies.

Stephany Yablow

North Hollywood