Insurance
 

I'm a member of a chapter that is a member of FIPG and is insured by GMI. GMI keeps raising rates. It seems to me the market for fraternity insurance is purposely noncompetitive so that the companies can gouge on rates and use "increased risk" as an excuse to raise rates over and over again, even as most chapters are infinitely better than they were in the 80s.

Is it possible to ditch GMI and FIPG as a chapter of a national fraternity and go with our own liability insurance?

Does FIPG offer any options other than GMI? I thought the whole point of FIPG was to avoid things like this.

to my knowledge it doesnt, or if it does it is a decision made by nationals, not the chapters

You're partially right.

The real reason for FIPG, though, is so fraternities can get insurance, period.

Most insurers won't touch us.

The reason for skyrocketing rates is skyrocketing claims.

See the rest of this forum for details.

Unfortunately I don't understand why fraternities allowed themselves to be at the whim of insurance and the legal influence in the first place. I don't understand why GLOs fight so hard to criminalize actions thier chapters commit. It only furthers their dependance on big insurance and creates more opportunities for them to get sued. I hate to say it, but if certain types of hazing that didnt risk life or limb (like a making a pledge get you a soda from the corner store) were understood to be a legally defensible contract iand not a criminal action and strict liability offense, fraternities would not have the issues they have today. Also, fraternities should have fought harder to hold inviduals accountable for their actions rather than organizations. With all the greeks in public service this seems possible. Unfortunately, it seems that lawyers and insurance companies are in cahoots to make every action a criminal offense worthy of multimillion dollar judgments. Insurance companies dont care becuase they can raise rates or drop coverage on bad clients, and lawyers get a payout on the judgment. Insurance margins may be shrinking, but big insurance isnt going out of business anytime soon.

The real victims here are the actives in fraternities, who while they were once treated like responsible adults, are now relegated to being children and told they are behaving as such. To my knowledge, the same shenanigans have been going on for years. The only difference is that times have changed because biglaw got greedy.

The rest of this forum has nothing to do with price gouging, if that's indeed what is happening here. That's illegal and FIPG should not be allowing it to happen - as I'm sure they make a profit from their services as well. And if they're not getting the best deal possible for the groups or steering them to a certain insurer they can get in a hell of a lot of trouble. They say they're only for the purpose of "providing info on risk management issues" (quoted from their website) but if GMI is indeed the only option they offer - they've gone past being info providers and become brokers and they are subject to all the same regulations other insurance brokers have. I don't care if they're insuring fraternities, doctors, actors, whatever. You have to market your groups on a regular basis.

Rates have gone up but there is also an experience factor - i.e. if you don't have any claims (your fraternity nationally that is) your rates should go down. XYZ that had 20 guys sue their national for hazing shoudn't be paying the same as ABC whose chapters have all kept their noses clean and had no problems.

Our national advisor to us: Guess what, we had 0 lawsuits last year guys good job.

Then our rates went up 20 dollars to 150 a man anyway. They're supposed to skyrocket again this year.


Also in theory, why wouldnt a greek system organize so its chapters are stand alone organizations. That way if a chapter is sued, you close the chapter and file chapter 7 bankruptcy. Actives who were responsible are covered under homeowners insurance. I don't see why you need mega redundancy on insurance coverage. I dont understand why you need to insure the chapter as an entity if once it is sued and loses, the chapter loses its charter and liquidates itself.

What would be interesting to see if the insurance purchased by all the chapters of my GLO exceeded the total cost of judgments against it. It did last year when there were zero.

And "should" isnt always the reality. Being in my GLO, it seems like we play the game of "how much will insurance cost this year" and we take whatever nationals tells us to pay. Not to mention that GMI also serves as the arm of my GLO to collect from chapters and has the rights to collect from our bank account on behalf of nationals.

Somehow I feel like someone's getting screwed in this process. Especially when Joe Blow your 21 year old college student can have a 30 kegger at his house, with no worries, because if he screws up and something happens his homeowners policy covers him. You don't see appraisers even checking to see if individuals have "risk management violations." Even better, if Joe Blow is an ABC and ABC is in FIPG, and 4 of his friends go to this party, even at a third party place, Mr. Blow's GLO, at the national level, is liable. That's just freaking retarded. The reason rates are so high is because everyone is liable and GLO's have done nothing to stop the assault of litigation against them, instead reverting to attacking their own members and trying to change the culture of their organizations so their cultures now resemble insurance companies with risk management seminars as opposed to fraternities with real brotherhood, parties, and strong alumni. (you cant find them around, or else they are liable too)

It's just a matter of being in the public eye and having people not doing enough to keep us out of the public eye and to enact favorable policies for fraternities.

I'm gonna look up how FIPG's works. Its funny GMI isnt even online.

But along the lines of more or less, thats something you need to watch out for. It should be less and much less.
When swimming in a lake drunk voluntarily can get your nationals sued if something happens to you; when there is a mentality that a pledge, simply by the fact of being a pledge, is in every action forced by the Actives, his school, his greek system, and his national GLO; that this pledge, an 18 year old voting adult has no freedom of choice because of the "power structure" laid in front of him, there is something terribly wrong with our tort system. The fact that these things are strict liability offenses for all parties is merely a sign that lawyers enjoy taking advantage of GLO's deep pockets. They get so deep because national GLOs buy so much insurance coverage. It's a vicious cycle.

While you are raising some interesting questions, I'd refer you to the thread at the top of "Risk Management" for a list of some 30 recent deaths involving GLOs, members, and guests. I think Sigma Chi alone has had two or three $1 million settlements recently.

Your defense of closing and liquidating a chapter which gets sued fails, because the suer can also sue the natl., the chapter's officers and leaders individually, the chapter's advisors, and always, of course, the college. If there is guilt, they'll extract $$$ from someone.

Good to hear that your GLO had no claims last year. Sorry your rate has gone up. Keep in mind that the GLOs had to form their own insurance pool because no existing business would accept the risk.

If you can find a company that will insure your chapter cheaper, let us know.

DITTO what hoosier said.

LXA had Lloyds of London for years. Why, because they offered Insurnace to High Risk Situations and that through Risk Management has become.

Insurance Rates dont neccessarly mean that a Chapter or a National is being good, but what all Greek Organizations are doing. This is really brought into the mix.

Insuring Greek Organizations has become High Risk, ergo, High Insurance Rates.:(

For 3 years, LXA Insurance Company had Us listed in Pittsburgh, Penn., when we were in Pittsburg, Ks. We finally got a rebate that amounted to a nice sum for the Chapter.

I cannot remember where I saw it, so dont ask, but, there were 3-5 GLOs that had more Risk violations from all GLOs. I was very surprised as to who they were to say the least.:eek:


The solution is simple, if there is No Risk Management Problems, then The Rates will go down with prodding from IHQs.

The point is that because a poster calls something price gouging, that doesn't make it so.

The point is that if you look at the rest of the threads in the forum, it might explain why prices keep increasing.

The point is that fraternities are almost un-insurable.

The point is that, like anything else, insurance companies are a business, not a philanthropy. When payouts go up, income must, too or the business fails.

The point is that whether a chapter has a perfect year or not, if the other chapters in the organization don't all have perfect years, the insurance costs are going up. It's a cumulative formula.

The point is that it isn't little bits of hazing that like pledges getting cokes that make the prices soar, it's liability suits for deaths and injuries -- it's damage to fraternity houses -- it's falls from high places -- it's fires and all of the other things listed in this forum that make prices rise.

The final point is that the cost of everything is going up, but not as quickly as our insurance rates. The reason for that is that many of us don't practice Risk Management to the extent that we should.

Everyone should be a chapter advisor, House Corp. President or National/Regional officer. It's a real eye opener.

Keep in mind the sherman antitrust act applies to all industries EXCEPT the insurance industry. I'm still baffled by why this is the case. So in the case of GMI, or any other company, price gouging is legal, but it takes a lot of spin and excuses to excuse it.

Insurance says that if claims exceed 50% of receipts its unprofitable. Excuse me, that is absurd. They are getting 100% gains annually less administrative costs (like sending the whole company to a conference in Aruba) and are whining? Also, you are paying TWICE what you would pay if you were uninsured and actives merely pooled their money into a fund.

Insurance says one thing, but if you look at the numbers, it is a different reality. Search "insurance price gouging on teh internet and see what I'm talking about."

No one really seems to care about this, they just mindlessly send their check off thinking they are somehow protected against catastrophic losses. But when problems come up, expect your insurance company to look for any way that you didnt follow their insane guidelines so they dont have to pay you.

That's how the world works when you deal with an oligopoly that behaves like a trust since it is legally allowed to.

The fact that you are legally obligated to buy this insurance as the price of your "freedom of association" a completely bogus argument. Fraternities, unfortunately have become the victims of a witch hunt, where the risk is blown up and cases that shouldnt even apply under these laws are being tried. In addition, insurance companies claim the number of lawsuits filed. But most of these lawsuits are settled for much smaller amounts, and many more are thrown out of court.

I think it would make sense if fraternity action wasn't all held as strict liability (pretty much every greek event that has pledges present and something goes wrong, even a plain accident is considered hazing by insurance companies) , and instead the courts had to go out and prove the elements of negligence are present like they do with every non greek.

That is because Insurance Company pay out big $$$ for lobyists to The Federal Govt to keep it that way!

You dont seem to know much about Insurance Companys.

The Hurricains in Fl. last year affected us all. Oh I live in Ks. ToTo!:)

They want to fight pay outs, but want the Premiums coming in, NOW, or you will be cancelled forth with!

Isnt Your State a Required State for Aouto Insurance and it is against the law of You Dont Have it?

Try going to A Hospital without Health Insurance, good luck.:(

Try Getting ACLU in on this crusade and they will just laff at you!

Do you understand that a large number of fraternities are, for all intents and purposes, self insured because no other underwriter would touch us? The number was pushing 20 the last I looked.

So if we're getting gouged, we're doing it to ourselves.

To me, the real point is that we've brought this on ourselves.

Again, read the other threads in this forum.

Stupidity costs money, I guess.

The point that this poster is trying to make is that HIS fraternity has not had any lawsuits and their insurance went up anyway. That's not how it's supposed to work.

Of course there are high risk industries - let's say nuclear plants. Everyone pays to some point for the mistakes they've made in the past and the inherent danger involved. But if Joe's Nukes has 16 spills in a year and Bob's Nukes has zero, they damned sure shouldn't be paying the same insurance rates - nor should they be dealing with an insurance agent or carrier or broker that tells them they have to.

If his fraternity hasn't had any hazing claims or lawsuits or complaints, how have they "brought it on themselves"? Are they supposed to patrol every other fraternity to make sure nothing happens? I mean, that's absurd, and you certainly wouldn't say that McDonald's needs to suck it up if Wendy's keeps hiring idiots who stick their hands in the deep fryer.

As I read it, it's his chapter. But even if that's not so, it doesn't matter.

The reason our car insurance keep going up is that people (as in our whole country) keep doing dumb things and don't drive safely.

The reason fraternity insurance keeps going up is that we (as a system) keep doing dumb things like killing people.

Neither is fair to those of us who never put in a claim -- but that's the way the system works.

The one thing you failed to realize is that insurance companies are still posting record earnings, and that they only insure people if they are sure they will make a profit. This is the point of business. It should be self evident that if a well run non profit insurance company was started on behalf of the GLOs, people would pay less money in premiums.

What is sad is that while financial risk has gone up, the behaviors that are actually risky have plummetted.

Funny you mention this battle, as tort reform was a major republican issue, especially on the libertarian branch of the party, going into the last election. Tort reform, combined with the federal oversight of monopolistic behavior by insurance companies, would help GLOs immensely.

It is sad that some just accept the reality of rising rates as fact without looking into why or figuring out ways to solve the problem.

For states who dont require insurance, how about new hampshire, which does not require you to carry liability insurance for your automobile. You are not required by law to pay to reduce your financial risk. I personally think being legally required to buy a product priced by a company not covered by the sherman antitrust act is the definition of extortion.

Any company can whine about rising costs as an excuse for charging higher prices. The real problem is that people are willing to pay these exorbitant prices, and more importantly, at least in the case of my GLO, are required to pay whatever amount the NHQ tells you to pay, and in most cases if you don't pay, you go to a collection agency. Furthermore, you can only cancel this insurance bill when you graduate, my GLO doesnt recognize INACTIVE members. They still get billed for the insurance unless they have dropped out of school.

It's pretty easy to see whats going on here. Rising costs are never an excuse for rising prices. Prices are determined by supply and demand and what they are willing to pay. Since they are required to buy insurance by law, people are willing to pay almost anything in order to keep 120 or more years older GLO's alive, to keep doctors in hospitals, and to be able to drive their cars. It's just a matter of continually putting on the squeeze slow enough that no one notices til its too late and paying off lobbyists while simultaneously lying to the public about rising costs instead of the fact that they are simply trying to maximize value for their shareholders.

I've never had a car accident and have never visited the doctor for the 6 years that I have been on my own with these types of insurance but my rates go up every year.

The reason is what my fellow Delt brother contends. We are all inter-related. That's the reason an insurance company sells policies. We drive our cars and we read the news about the big wreck on the interstate or whatnot. For crying out loud, my girlfriend was hit twice in one week. It says that we are negligent drivers.

We have people who intentionally smoke. While they are paying somewhat higher rates than I, I am also supplementing for their "addiction."

The same goes for greek organizations, social clubs (masons, Moose, Elk). Some chapters are clean, some are bad. But the point is that we are all inter-related.

Insurance companies, or anyone for that matter, would not provide coverage to a single person by themselves if they were not responsible in everything they do. If an insurance company were to provide coverage to just me, then they would go under, because the time I am sued for malpractice for $200,000 and I have only put $15,000 in the pot, the insurance company goes under.

The more people who are under a policy the cheaper it is for all of us. Yes, I know that sounds socialistic, but it kind of is. But when you take that into account, you let in some low lifes who make poor decisions and we have to pay for it a little.

But there will come a time where something bad happens to your chapter and you will be glad that there is that insurance to protect you. Whether you are a chapter member or an alumnus advisor, you are liable if something bad happens.

LATau, not to be critical, but you had said something earlier about holding chapters as individual entities and that is something happened, the local chapter could file for bankruptcy, the national organization would get off scot-free. How would you feel if your best friend was killed while in the fraternity house and all his family got was a $500,000 check from the bankruptcy of the house or from the home-owners insurance? (What if the chapter didn't have a house? Chapter funds are like $30,000. Would you be happy that your best friend lost his life for $30,000 and now no other men would be able to go through the proper growth of living in a real fraternity).

I think you'll find that the company that brokers the "self insured" piece I've talked of above is simply a managment company -- not someone like Prudential or Lloyds.

The pool of money belongs to the consortium of fraternities. It does not come from profits on policies -- if there are any.

It is not your typical insurance company that is set up for profits. It is set up for self protection.

From the FIPG website...
 

I know that I have posted this before in another thread but...

Q: Does FIPG sell insurance?

A: No! Despite the popular misconception, FIPG does not now nor has it ever sold or provided insurance coverage. FIPG was created in the 1990s to investigate the possibility of providing group insurance coverage for a number of fraternities. However, that effort was short-lived. FIPG has nothing to do with fraternity/sorority insurance or insurance coverage.

Q: What does FIPG do?

A: Provide risk management guidelines and educational resources to help member fraternities and sororities be more effective in their risk management policies and educational efforts.


The fact that an organization is a member of FIPG may help them be more insurable because various insurance companies will like the policies that the organization has adopted because of their membership. Aside from that FIPG has nothing to do with your insurance coverage.

More information about FIPG can be found at:
FIGP.ORG

Car insurance can't be compared. Those rates are based on everyone in the entire country.

As far as your medical insurance, unless you have individual insurance, it depends on the claims of your group overall. If your insurance has gone up above and beyond the market in general and you didn't have any large claims in your group, you're getting screwed - that's what I'm talking about. FIPG shouldn't be including the giant lawsuits of XYZ with ABC.

But that's the point. We, as greeks, are all inter-related under these terms. If we were all on the same page and all of the organizations were clear of liability, then perhaps we would see a stay on increases. We are in the group together.

My Brother Delt is correct. There is a direct corelation. Car insurance rates are set by the number and amount of claims for a group -- notably all drivers. Chapter liability insurance rates are set by a group, also -- notably all chapters.

In fact, there was some talk about giving breaks to chapters with no claims, high GPS's etc. Just like good driver and good student discounts. I don't know if that ever happened.

I work in the insurance industry...
 

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