Dropped Off A Cliff By The Bank
Wednesday - June 14, 2006
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Del.icio.usYep, I’m one of those 30,000-plus policyholders left holding an empty bag when most Hawaii mortgage lenders stopped accepting HIG house-and-hurricane insurance.
HIG’s rating had slipped to a C++, a sort of gong of doom like being decreed junk in the bond market. Not that HIG has any financial problems. It’s owned by an outside-Hawaii parent that does have money problems.
You might expect our local banks to say “oh, what the hell, it’s just the parent” and not drop 30,000 of us off the cliff.
My lender claims the problem is that it lays off its mortgage loans on Fannie Mae, and that private-but-quasi-government agency requires a B rating or better insurer.
Some years I’d say “oh, what the hell.” When State Farm dropped me years ago for having the bad judgment to actually make an insurance claim, I got virtually the same coverage, same price from HIG.
Of course that was before Iniki and Andrew and Katrina.
Now, the $1,852 personal-and-hurricane coverage I had with the just-cancelled-by-the-bank HIG will cost me $3,550 for 2 percent deductibler and $3,000 if I’ll shoulder 5 percent of any loss.
I’m more than a little unhappy with my bank/Fannie Mae. My bank sent out a “no more HIG” notification five days before HIG sent the bank a bill for another year’s premiums. Obviously, the bank could have said “gee, we don’t want to really screw Bob by dumping him at the very moment of renewal of his insurance. Let’s give him a renewal-year of leeway.”
Not my bank.
I came home to the mailed notice on May 22, and my HIG policy expires a week from Friday. I’m sure many of you find yourself in the same squeeze.
You might expect me as a social and financial liberal to urge that the state move in to buttress the insurance crunch. Not in this case. I’d love it, personally, but I know the better solution is to let the market work this out.
Of course by the time it does, I - and some of you - may be on the financial ropes, body-slugged by the one-two of property taxes and new insurance rates.
You can ask your employer for a $100-a-week raise. We can enjoy their laughs together. They are about to get hit with higher property taxes for businesses. We’re lucky if they don’t ask us for $100-a-week in givebacks!
My anger is with the lender who put those words in the mortgage about “changing property insurance requirements as required” without a grace period.
Do I have any recourse? No. But I can shift more bank savings/checking to money market funds at Fidelity and Vanguard, where one earns much more interest and gets a free checking account. You do whatever it’s in your power to do.
I can’t work up any sympathy for 1st Lt. Ehren Watada, who’s refusing to deploy to Iraq with his Army unit because he thinks that war is wrong. It is wrong. But Watada joined after graduation from HPU in 2003, so supposedly after the war started on March 19 of that year. Then he went to Officer Candidate School for his commission. Uh, hello! You join the Army when a war’s on, but you pick and choose if you’ll fight or sit it out? I don’t think so. It’s not as if he were drafted.
Nope, I don’t think Watada has any principle to stand on.
In last week’s Good Eats column, it should have been Pho S. King rather than Pho N. King.
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