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New Research Center for Ala. Homeowners
GULF SHORES, Ala. (WPMI) A new research center in Alabama is aimed at providing homeowners with information on the rising costs of insurance. Governor Robert Bentley formally established the Alabama Center for Insurance Information and Research on the campus of University of Alabama Wednesday.
It all comes on the heels of a new state law that requires all insurance companies to turn over financial records including policy records. The research center will collect all this data, but the question is will it solve the affordability problem?
With every major storm fewer and fewer insurance companies are willing to provide coverage for wind damage that's is the problem.
"I got a house in Magnolia Springs that cost about $70 a square foot to build, but I had to pay $110 a square foot to insure it," said homeowner Howard Gann.
Without competition, rates go higher and higher each year. Homeowners like Gann have little choice.
"There's nothing to shop to you, go to AIUA. It's the only place that has it. There's no competition whatsoever. It's run by the state of Alabama, its underwriters but it's run by the state of Alabama," said Gann.
"We do hope we have more competition that comes into the state not only on homeowners insurance.We hope eventually it will be for all types of insurance," Governor Bentley said.
"Will it accomplish anything? Very likely not. Until some action is taken by the insurance companies the people who write the insurance and put the money on the line for the losses," said Gulf Shores Insurance broker Norris Cole.
Dozens of home and condo owners have come to Cole looking for a better rate.
"I just had a lady call me who has a $200,000 home and she's shopping because her insurance this year is $5,000 and she's on County Road 6," said Cole.
The good news is some insurance companies, known as re-insurance companies, are beginning to loosen up their cash. The fear is that with another major storm insurance companies already spending money will pull right out again.