Two insurance companies to drop 186,000 home policies (hurricane ally)

[phantom power]

cross-post:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=364&topic_id=985959&mesg_id=985959


By Kathy Bushouse
South Florida Sun-Sentinel
Posted April 21 2006

http://www.sun-sentinel.com/news/local/southflorida/sfl...

One of South Florida's largest home insurers is shedding the policies of some customers who still have unrepaired property damage from last year's hurricanes, despite a state rule ordering insurers not to drop policies for at least 90 days after repairs are made.

Poe Financial Group's Atlantic Preferred Insurance Co. and Southern Family Insurance Co. recently told state insurance officials they won't renew more than 186,000 policies statewide because of $2 billion in losses from the 2004 and 2005 hurricane seasons.

<snip>
Despite the state rule that requires insurance companies to keep the policies of customers who have open hurricane claims, neither Atlantic Preferred nor Southern Family plans to keep those customers and have informed state regulators of their intent.

That means some homeowners could be forced to find new insurance coverage while still making repairs from last year's hurricanes. And private insurers won't touch homes with existing damage, meaning those homeowners are destined for policies with state-backed Citizens Property Insurance Corp. However, Citizens, the insurer of last resort, wouldn't be liable for the existing damage.
<snip>

[zbdent]

1. Gee, I wonder what the checks to the Repuke politicians totalled

to get them to be able to get away with this one . . .

[raccoon]

2. I think we'll be seeing more of this kind of thing. nt

[phantom power]

3. Yes. It's going to get worse, not better.

I think some combination of fewer people living in hurricane alley, combined with more rigorous (and expensive) building codes, is the future of the region.

Until massive drought starts to kill us off, at which point building standards will be the least of our problems.

[Coastie for Truth]

4. This is the insurance industry "Business Model"

PART 1 OF THE MODEL

a. Take the customer's money
b. Deny the claim when the insured event actually happens
c. Make the customer sue on his claim when the insured event happens
c. At which point the insurance industry screams "frivolous law suits" and "tort reform" and "avaricious trial lawyers."

PART 2 OF THE MODEL

a. Privatize profit
b. Socialize Risk (i.e., run to the government for a bail out)

This two part business model has been played out in Flood Insurance, Earthquake Insurance, Price-Anderson Nuclear Reactor Insurance, among others.

[wordpix]

6. ain't it the truth? I am always astounded at how much we taxpayers have

to pay for these disasters when most people have home insurance and thus, their insurance cos. should be paying to rebuild. In my state (CT), you can't get a mortgage without home insurance. Apparently, when the insurers decide they've paid out enough, they run to their buds in BushCo for a corporate welfare bailout.
:mad:

[Coastie for Truth]

8. They deny libility

and run for a bailout.

That is the history of earthquake insurance.

[Boomer]

5. One more year and this will be a moot point

There's no excuse for flouting the law that specifies insurers MUST continue coverage until the grace period after rebuilding. I'm still puzzled that they are dropping coverage anyway, unless enough graft money has been coughed up to make them feel immune to prosecution.

But given the grim predictions for ferocity of the 2006 hurricane season, within the next year or two NO insurance company will pick up homeowners that have been hit by a hurricane. Insurers go by the numbers and the numbers under global warming are staggeringly expensive. There is no more profit to be had from insuring coastal property -- it's going to become a financial black hole.

This, if nothing else, may finally halt the suicidal development of vulnerable coastal land. Withour insurance there is no bank money, no development loans, and thus no development. As homes are destroyed, many people will have to walk away from the rubble, impoverished, to start over again somewhere they have a fighting chance to protect themselves from loss.

[wordpix]

7. "may finally halt the suicidal development of vulnerable coastal land"

It is just complete stupidity to build on such land and the only reason insurers cover buildings on coastal land, probably, is that they in turn are bailed out by you and me, the taxpayers.

[Dogmudgeon]

9. Southern Family Insurance Co. is changing its name

Henceforth, it will be known as "Southern Homeless Family Insurance Co."

--p!