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A PIA Call-to-Arms: Don't Raise Insurance Rates of Our Returning Soldiers!

State officials are responding to a nationwide campaign by PIA National to make it clear that no member of the U.S. Armed Forces should...
June 25, 2004

PIA Calls on All States to Isssue Waivers of Continuous Coverage Underwriting Standards for Service Personnel Returning From Active Duty Overseas

PIA National Senior Vice President of Communications Ted BesesparisBy Ted Besesparis
Vice President, Communications
PIA National

State officials are responding to a nationwide campaign by PIA National to make it clear that no member of the U.S. Armed Forces should face auto insurance rate increases or coverage denials because their coverage lapsed while they were on active duty overseas.

The issue first came to light in May, when insurance agents in North Dakota told Insurance Commissioner Jim Poolman that some auto insurance companies were denying reinstatement, refusing to write policies, or raising premium rates for members of the Armed Forces who discontinued their auto insurance while deployed, because they could not demonstrate continuous insurance coverage.

Shortly after Poolman issued a bulletin saying such underwriting requirements "are inappropriate and should be waived" in the case of returning U.S. soldiers, PIA National issued an action alert on May 19 to all of its state and regional affiliates, urging them to aggressively press their state insurance regulators to issue similar bulletins.

"This is just the right thing to do," said PIA National Vice President Ray Peretti of Renton, Washington. "As professional insurance agents, we are accustomed to advocating for our customers. In this instance, we are proud to advocate for both our clients and our country."

Peretti has a personal stake in seeing to it that United States military personnel are afforded the proper respect and consideration. Two of his stepsons are in the military. His oldest, James Dreier, just returned from a tour of duty in Kuwait. Ray's youngest stepson, Kendrick Dreier, just got out of Navy boot camp and is awaiting his first assignment.

As soon as PIA decided to engage the issue of insurance for returning soldiers, Peretti immediately got on the phone to insurance commissioner Mike Kreidler's office in the state of Washington. In short order, the office issued the bulletin PIA requested.

"We've had several calls from consumers who've been told they'll be charged a higher rate when they return from active duty due to a lapse in their insurance coverage," said Kreidler.

For Peretti, the issue hits home - not just in his own family, but also in the PIA family. "When I went to our state convention, our outgoing state president Jack McCalmant told me he has a son in the infantry in Iraq. All of our servicemen and women are making us so proud, they're doing so much good - and we're not hearing about it in the media. Our PIA campaign on this issue is just one way all of us can say 'thank you'."

In little more than a month since PIA issued its call-to-arms on behalf of our soldiers, states across the nation have responded. So far, in addition to Washington, Missouri, Iowa, Colorado, Connecticut, Florida, New Mexico, Indiana, Michigan and North Dakota have all issued advisory letters, statements or orders stating that all underwriting standards on continuous coverage should be waived for all returning U.S. service personnel.

In Missouri, Gov. Bob Holden (D) personally issued a statement urging that any service members who experience such a problem should file complaints with the state DOI.

"We are urging insurers to follow the spirit of the law - and act as good corporate citizens - by waiving any requirements on continuous coverage for soldiers returning to civilian life. Many of these soldiers simply stored their cars and cancelled their policies when they began full-time tours of duty to Afghanistan, Iraq and other sites in the U.S. or overseas," said Holden.

"If soldiers face these surcharges or refusals of coverage, they or their agents should contact Missouri Department of Insurance immediately for assistance. The department plans to work with these insurers to ease the return of these men and women from military duty," Holden added.

In Florida, state insurance officials have gotten 30 complaints from returning troops in the past month, according to Florida Chief Financial Officer Tom Gallagher (R).

"It is only recently that we began hearing complaints from members of the Armed Forces returning from active duty," Gallagher said in a statement. "But what we heard was very disheartening: service men and women returning to find their auto premiums significantly increased or their applications for new coverage denied." Troops often cancel their policies when they're sent overseas, Gallagher said. The lapses can lead to higher premiums, or canceled or denied coverage.

"PIA of Florida thanks our state insurance officials in Florida for stepping up to the plate on behalf of our troops," said PIA of Florida Executive Vice President Mark O'Connell.

While the letters and statements issued by most states simply advise insurance companies to waive continuous coverage requirements for returning service personnel, Connecticut officials said they "expect" carriers to comply.

"As Insurance Commissioner, I expect that returning members of our Armed Services will have any such underwriting or rating requirements waived," said Connecticut Commissioner of Insurance Susan F. Cogswell. "These men and women, who have risked their lives on behalf of and in defense of our country, should not be penalized for their services. I would consider use of such underwriting and rating requirements in cases of insureds who have not had continuous coverage because of their service in the Armed Forces to be unfair within the meaning of Connecticut General Statute 38a-818."

Cogswell added that officials want to make sure that service personnel returning to their homes in Connecticut never have to face the difficulty of reinstating their auto insurance. "This is a small issue for companies, but a large issue for these service men and women," Cogswell said. "It is the last thing that they should have to worry about."

"PIA applauds all the officials in these states for going to bat for our Armed Services personnel who are serving us so well," said PIA National Executive Vice President and CEO Len Brevik. "We urge all other state officials to follow the lead of their colleagues who are acting quickly in support of our troops."

Brevik said advisories by all state insurance departments should be issued recommending waivers of all underwriting standards on continuous coverage for returning service personnel and reinstatement of policies as if coverage were continuous. Brevik added that PIA's campaign to obtain the waivers for returning U.S. soldiers will continue "until no soldier in any state is faced with this problem."

Ted Besesparis tedbe@pianet.org is Vice President of Communications for PIA National.

This article originally appeared in the June 2004 PIA Connection.

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