Mold claim losses drop, number of claims rise, report shows

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http://www.reporternews.com/2002/texas/mold0616.html

Sunday, June 16, 2002

Mold claim losses drop, number of claims rise, report shows

AUSTIN (AP) - Insurance companies' mold claim losses have dropped in Texas

for the first time in two years, a state report shows.

But the Texas Department of Insurance isn't ready to declare that the

state's homeowners insurance crisis has ended. The report shows that the

number of claims rose from 11,318 in the third quarter of 2001 to 14,706 in

the last quarter of 2001.

An insurance industry spokesman said he expects premiums to remain high.

The report, which was released Friday by the insurance department, showed

that the amount insurers paid on claims dropped from $274 million in the

third quarter of 2001 to $188 million during the last quarter of 2001.

" We would like to think that these numbers have peaked, " agency spokesman

Mark Hanna said in Saturday's editions of the Austin American-Statesman.

Consumer advocates say they hope the drop in insurance losses over the last

three months of 2001 will result in lower insurance premiums, but they have

their doubts.

" That's good for insurance companies, but whether it's good for consumers,

that remains to be seen, " said Rob Schneider, a senior staff attorney who

follows insurance issues for the Southwest regional office of Consumers

Union.

Hanna said insurance company losses are expected to drop further because of

changes made in homeowners policies earlier this year.

However, a spokesman for the insurance industry said the state report could

be misleading.

Jerry s, president of the Southwestern Insurance Information Service, an

industry trade group, said the state report failed to include water-related

losses.

" We predict that when all the data is analyzed, 2001 losses caused by

water-related and mold claims will exceed $1 billion in Texas, " s told

The Associated Press on Saturday. " Until consumers are offered a choice in

the type of homeowners policies they purchase, rates are expected to remain

high. "

Texans already pay the highest insurance rates in the nation, industry

officials have said.