Agents, Carriers Batten Down For Isabel

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By Mark E. Ruquet

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NU Online News Service, Sept. 17, 11:05 a.m.EDT--As Hurricane Isabel neared landfall, independentagents and carriers were busy turning away some new business andgetting the word out about how clients should prepare for the heavyweather.

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From South Carolina to New York, and inland to Pennsylvania,carriers were reminding agents that under an imminent peril, theycould not bind new property policies, largely in homeowners andautomobile programs.

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Earlier in the week, when Isabel's wind speeds rose above 150mph at one point, North Carolina agent Jenny Evans said companiesinformed her agency on Monday, by fax, that there would be nobinding of new business while the storm approached.

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Ms. Evans, of the Cape Fear Insurance Agency Inc. in Lillington,N.C., said her firm has been busy preparing for Isabel's aftermathand dealing with customer queries about their coverage.

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She said the moratorium on new business generally lasts for 48hours after the hurricane warning or watch has been dropped.

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The moratorium extended to automobile coverage, she said. Theagency would be writing only liability insurance until after thestorm. Any writing for physical damage, after the storm, wouldrequire inspection of the car before issuing the policy shenoted.

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She said the agency had experienced "non-stop calling" frompeople either asking questions about their policies or seeking topurchase insurance for the first time as the storm approached.

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In Virginia, it was time for agents to "batten down thehatches," said Bob Bradshaw, executive vice president for theIndependent Insurance Agents of Virginia Inc., based in Richmond,Va.

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Companies stopped binding policies by Tuesday and agents weredealing with a flurry of questions from current customers and thosetrying to buy insurance at the last minute. The association wasalso advising agents on how to answer press inquiries withinformation and recommendations for the public.

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For a fair number of agents, all of this is new ground, henoted, because younger agents in Virginia have not had to deal withapproaching hurricanes.

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Dan Crobin, director of research for the regional ProfessionalInsurance Agents for New York, New Jersey, Connecticut and NewHampshire, said some agents might be surprised by their carrier'sactions of suspension, but it is a normal business practice in theface of an impending peril.

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"Memories fade a little," he noted.

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He said the binding restrictions he was aware of applied towithin a radius of 100 miles of coastal areas.

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One thing he said agents should be reminded to tell customers isthat there are provisions in their homeowners policies coveringproperty moved off of the premises out of the way of a peril to anew location for a limited time. Other provisions could extend tothe cost of supplies to temporarily repair damages, such as plywoodto cover windows to prevent further damage.

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Scott Stanford, chairman-elect of the Independent InsuranceAgents of New Jersey and owner of Britton-Selg-Stanford in RosellePark, N.J., said customers have expressed understanding wheninformed that they can't get a new policy in the face of theimpending storm. The clients most affected are those who wereplanning to close on a house during the affected period, but had topostpone it.

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"We, at the shore, are accustomed to the carrier suspensions,but for those agents inland it might be new to them,"
said Andrew Anderson, owner of Anderson Insurance Agency inManahawkin and Haven Beach, N.J., located at the New Jerseyshoreline.

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He added that agents who are not aware need to review theirappointment contracts on the suspension of binding authority. Henoted that the contracts often stipulate that when a hurricanereaches a position along a certain latitudinal and longitudinalpoint, the provisions go into effect.

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His agency has a real estate subsidiary, and he noted that manycarriers are honoring binding of homeowners policies where apre-determined closing date was in effect weeks prior toIsabel.

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Carriers said they were watching the storm track carefully andputting out notices to agents advising them of the suspensions.

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Jennifer Wislocki, a spokesperson for Hartford, Conn.-basedTravelers, said the company suspended the writing of new businessin the wake of Hurricane Isabel's progress. Parts of SouthCarolina, New York and Delaware were affected by the suspension. Inaddition, the entire states of Virginia, Maryland, North Carolina,Pennsylvania and Washington, D.C. were all affected. In New Jersey,the company's subsidiary, First Trenton, suspended coverage.

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Yesterday, Travelers said it had mobilized a CatastropheResponse Team to assist insureds in Raleigh, N.C.; Richmond, Va.;and Washington, D.C. In addition, Travelers dispatched four mobileclaim offices to the area.

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State Farm Insurance Co., based in Bloomington, Ill., wassuspending coverage along the track where the National WeatherService placed either hurricane watch or warning, said companyspokesperson Ana Compain-Romero.

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Sue Honeyman, a spokesperson for Hartford, Conn.-based TheHartford Financial Services Group, said initially that the companyhas issued suspensions for five states--Florida, Georgia, North andSouth Carolina, and Virginia--pertaining to new and additionalproperty coverage.

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But as the eye of the storm moved toward North Carolina's OuterBanks this morning, she said that the list had been revised. WhileFlorida and Georgia were removed, the company listed 13 states forwhich new or additional property coverage should not be bound orissued for risks located within 100 miles of the coast, includingNew Jersey and New York.

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The carrier has placed between 50-to-100 catastrophe experts onalert and has secured operational space in North Carolina andBaltimore in advance of the storm.

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"We are ready. All we need is a storm," she said, yesterday.

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