By JEFF HARRINGTON, Times Staff Writer
Eight troubled surgeries later, he wears braces over the disfigured digits and winces in pain when he tries to move them. Social Security views Cohen as permanently disabled and is paying him as such -- but his workers' compensation insurance company, CNA, sees things differently. CNA has cut off Cohen from future payments and told him to get another job. The last job he was steered to: typist.
"I'm blaming the insurance company and the doctors for what's wrong with me," says Cohen, 52, who now lives out of his '86 Ford Bronco with the license plate: THUM-LES.
CNA officials didn't respond to interview requests, but Cohen's attorney, Debbie Metzler, thinks she has a case. "He doesn't appear to be able to go back to work, and the insurance company hasn't accepted that," she said. "I told him "You're one of the people in the system that the system is not working for.' "
The insurance system isn't working for a lot of people lately. From workers' comp to homeowner policies, from health insurance to property protection, Floridians are swapping horror stories this year of soaring rates, canceled policies and rejected claims.
The insurance companies say it's all in the name of "reducing risk" and stemming big losses. But the anger of those holding insurance, or seeking it, is growing. Consider a few other recent tales from the insurance front:
-- Roslyn Stein, 78, took out a home health care policy about a year and a half ago, paying a $122 monthly premium in case she someday needs a visiting nurse. In March, the premium jumped to $148; a couple of months later, it rose again, to $192.
"Every time you turn around it's something increasing," the New Port Richey resident said. "Unfortunately, we have no control over our health."
-- Curtiss and Carlie Gibbs searched in vain for a workers' comp insurance policy to cover a maintenance employee at the St. Petersburg apartment complex they manage. The worker had coverage with the building's previous owner but the insurance company refused to renew it.
-- Gerald Befay of Kenneth City figures his homeowners insurance company, Colonial Penn, has made plenty of money off of his premiums. He has never filed a claim in his 17 years with the company.
The reward of his loyalty: a letter from Colonial telling Befay it wanted to reduce its risk to hurricane exposure so his policy was being "nonrenewed" on Aug. 1, at the height of the hurricane season. (Colonial referred calls to its parent company, Conseco, which did not return calls for comment.)
"They said they would send me a list of a few places where I could check for insurance . . . but that's just going to be highway robbery," Befay said.
Befay isn't the only homeowner getting "nonrenewed" these days.
After Hurricane Andrew in 1992, the state limited the number of homeowners policies that insurers could drop every year. But that moratorium expired last year, letting insurers abandon more policies in hurricane-prone areas to reduce their exposure.
Insurers say cases of dropped coverage are relatively few, several thousand out of 4.5-million homeowners policies statewide.
Of course, those getting renewal notices aren't always happy to learn the price tag.
Geraldine and Robert Fischer, a retired couple from Illinois, have never had a claim since they moved into their State Farm-insured house in Spring Hill 15 years ago. But that mattered little when they received their latest homeowners' renewal due in August. The premium due: $1,035, nearly double the $582 they paid last year.
"It's more than my taxes," Geraldine Fischer, 77, protested. "We don't have this kind of money. . . . I haven't had a claim. I've been with them 25 to 30 years. I don't understand it."
Blame it on rising costs and lawsuits, as many insurers do. Blame it on insurance companies trying to make up for lost investment income from the roiling stock market, where they park much of the money they take in from policyholders. Blame it on Sept. 11, which sometimes seems a scapegoat for all economic ills.
Regardless, it's clear the insurance climate in Florida has taken a turn for the worse:
-- The decision last month by State Farm, Florida's largest insurer, to stop writing new homeowners' policies throughout the state only exacerbated a property insurance pinch.
-- After years of a discount war, auto insurers statewide are raising premiums, sometimes dramatically.
-- One new panel in Tallahassee has been charged by the insurance commissioner with helping owners of small businesses grapple with the unavailability of affordable health care insurance. Another committee created by Gov. Bush is tackling workers' comp insurance, where Florida charges the second-highest rates in the country yet pays among the lowest reimbursement schedules to injured workers.
-- Then there's the dismal state of medical malpractice insurance, where doctors and hospitals are scrambling to find any coverage, let alone affordable coverage.
"Normally you have one line in crisis," said Sam Miller of the Florida Insurance Council, a trade group representing insurers. "I cannot recall a year when almost every line appears to be in crisis at the same time."
Miller said the insurers are merely trying to mitigate their losses and that insurers, like their insured, are hurting.
Bob Hunter, director of insurance for the Consumer Federation of America, isn't convinced of that. Soaring premiums, particularly in homeowners and auto insurance, are both "shocking" and questionable, he said.
"There are all kinds of excuses I'm hearing, like mold and natural disasters," said Hunter, a former Texas insurance commissioner, "They can't go so far as terrorism. Osama bin Laden is not in a cave thinking about how to blow up your Toyota."
Hunter thinks the rising premiums in homeowners and auto insurance can be traced directly to the biggest player in the industry: State Farm.
The "good neighbor" folks spent years bulking up their market share through low pricing, Hunter said, and now they're trying to make up too much too fast.
State Farm, which writes about one-third of Florida's homeowners policies and one-fifth of its auto policies, has stopped taking new business in 17 states. That opens the doors for its competitors to either raise rates or become choosier in accepting policies.
"I have to lay it all on State Farm's feet," Hunter said. "It's an admission of mismanagement from my point of view."
State Farm objects to that characterization, saying it is simply caught in a tough market. Blaming rising costs, the agency's Florida operation posted an underwriting loss of $231-million in 2001, it said. Figures for 2002 were not available.
State Farm spokesman Tom Hagerty said the insurer used to rely on investment income to offset higher costs and higher payouts. Not any more.
And where are the regulators in all this turmoil?
Arguably swamped and unquestionably limited in power.
Tami Torres, a spokeswoman for Florida Insurance Commissioner Tom Gallagher, concedes the state is battling crises on several fronts, but she hesitates to concede her department is stretched too thin.
Medical malpractice has quickly moved to the front of the list of crises, but regulators also are under growing pressure to fix workers' comp, a troubled no-fault auto insurance law, and home health care. State Farm's recent moves placed homeowners insurance back in the spotlight, as well, but Torres acknowledges there's no easy fix.
Gallagher has authority to approve or reject rate increases in some lines of insurance. But the state controls average rates. There is no limit to how much an insurer can raise an individual's premium.
So when Gallagher approved an average 14 percent increase in homeowners' rates for State Farm in January, regulators didn't limit the insurer from imposing much higher hikes on some customers, as Andre van Oyen found out. Van Oyen, a Spring Hill retiree, faces a 72 percent increase in his homeowners premium with State Farm even though he has never submitted a claim. The annual bill to insure his single-family home is jumping from $513 to $885.
Torres said that type of abuse is unacceptable and the main reason Gallagher is fighting State Farm's new bid to raise homeowners rates by 22 percent on average, which would be its second hike this year.
The simple fact, though, is that Gallagher, like insurance commissioners before him, doesn't have as much power as he'd like.
He cannot make any insurance company write a policy it doesn't want to. In most cases, he cannot keep companies from not renewing policies. And if he rejects a rate increase, he can be overruled by an arbitration panel or by a state administrative judge.
Miller of the Florida Insurance Council fears the horror stories are only beginning.
Unless the Legislature steps in to fix a shattered no-fault system, he predicts spiraling auto insurance rates within three years. Ditto workers' comp which is "building to a rate crisis," he said.
Joe Belth, editor of the Insurance Forum
, an Indiana publication that tracks the industry, said evidence of turmoil is mostly anecdotal. But he agrees it will get tougher for the average consumer before it gets easier.
"I think it may be a very, very big problem coming down the pike," he said.
-- Jeff Harrington can be reached at firstname.lastname@example.org or (813) 226-3407.
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