insurance companies cancelling homeowners in hurricane zones

[donsu]

http://news.yahoo.com/s/ap/20060622/ap_on_bi_ge/katrina_insurance_backlash;_ylt=Aox2dBB0w_kobazb0yZ1aWGyBhIF;_ylu=X3oDMTA2Z2szazkxBHNlYwN0bQ--

The letter begins: "We're writing to you with what we know is unfortunate news about your Allstate Insurance."

Startled, Marie Collins reached for her glasses, then a magnifying glass and pored over the letter, realizing with a sinking feeling this isn't a standard mailing from the company that insures her home.

It was a cancellation. Her home was being dropped, the letter said, because it's in the path of future hurricanes.

-snip-

"It's outrageous," said Collins, who's lived 81 of her 83 years in the same house in the New York borough of Brooklyn, where a devastating hurricane hasn't hit since 1938.

Yet hers is one of 30,000 homes the nation's No. 2 insurer, Allstate Corp., is canceling in coastal counties of New York, citing the need to protect itself from future storms. Other major players are following suit: Nationwide Mutual Insurance Co. is no longer writing new policies on the eastern half of Long Island, N.Y., while MetLife Inc. is requiring extra inspections and expensive storm shutters for new customers living within 5 miles of salt water.
-snip-
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will tornado country be next?

insurance companies are in business to make money - what money will replace these homeowners monthly payments - what will be their new source?

[BOSSHOG]

1. HMMM!

Would this be considered a failure of the free enterprise system? Will the government now have to provide insurance to all the bush supporters in South Mississippi because the private insurance companies have gone tits up? Will some dittohead entrepeneur step forward with the master plan to make everything pleaseant in Hurricaneville? Don't count on it coasties. Maybe cheney can get halliburton a no bid contract.

[MercutioATC]

2. Insurance companies are businesses. These homes are liabilities.

Actually, a large percentage of insurance companies' profits come from investments made with premium payments. With the market in its current state, profits are already being hurt.

However, many coastal areas have become bad investments for insurance companies. They'll actually be stronger by dumping these bad markets. The savings in claims will more than make up for the loss of premiums.

[bloom]

3. "will tornado country be next?"

It could be if there got to being so many tornadoes that the companies couldn't keep up.


This turn of events would seem to be very damaging for property values - unless the gov't steps in to cover it. I guess they(we) have covered flood plains and such. :shrug:

[madrchsod]

4. the insurance underwriters raised their rates last year.

there was a conference last year that no one paid any attention to in the press or anywhere else. at that conference the underwriters realized that the global warming is a fact and that coastal regions around the world are high risks. if the insurance underwriters realize that global warming is a fact why doesn`t the governments of the world? don`t blame the insurance companies because we are all the problem when it comes to global warming and if given the chance we can be a solution..

[Jacobin]

5. They had record profits in 2005, even considering hurricanes

These fuckers just want to collect premiums and when you have a claim, they don't know you

[Virginia Dare]

6. This is just a greedy bid for more corporate welfare...

Allstate, the largest home insurer in New York, cited its "catastrophic exposure" to losses if a severe hurricane were to hit New York's coastal areas. Sen. Charles Schumer (D-N.Y.) says the claim is "bogus," citing National Oceanic & Atmospheric Administration (NOAA) statistics predicting that a category 4 hurricane or higher will hit New York City only once every 500 years and Montauk, Long Island once every 130 years. He thinks Allstate's move is nothing more than a political ploy to create a "false crisis" that will trigger public outcry for a taxpayer-financed fund indemnifying insurers from catastrophic losses produced by hurricanes and other major disasters.


http://www.consumerreports.org/cro/personal-finance/what-if-your-homeowners-insurer-calls-it-quits-206/overview/index.htm

[donsu]

8. Schumer right about "false crisis" but wrong on his hurricane stats

those stats were pre current global warming conditions

[Virginia Dare]

9. Probably why...

the insurance companies want to get this on the books now, as opposed to later. We'll have alot more problems than Hurricanes in New York before too long.

[murielm99]

10. Schumer could get his state

to investigate the insurance company, and deny them the privilege of writing policies in his state. Play hardball with these piggies.

[Virginia Dare]

15. What these assholes don't take into account...

as the State Farm rep. said, they will gladly take their business. A good many of these folks probably have their automobile insurance with them as well. If I were them, I'd cancel it and go elsewhere.

And another thing, so maybe some of these folks will move to Ohio or Pennsylvania at some later date, do you think they will bring their business back to Allstate? No friggin' way, I wouldn't.

When I was in my early 20's I was treated very shabbily by GEICO. I swore that I would never give them another dime and I haven't. They've called me several times practically begging me to come back. No friggin' way.

[1monster]

7. My insurance coverage has gone from $23 per month in 1990 to

$140 per month today, and it will go up again in the new premium year. In the meantime, the deductible has gone from $250 to 2% of the home's value.

And every year that a disaster hits somewhere, I hear of more and more insurance companies finding reasons NOT to pay off on the policies.

Here's a question for the insurance savvy. I currently pay $700 per year for "Hurricane Insurance." I am not on a flood plain so am not required to have flood insurance (which doesn't have a good record for paying off lately either) and I really can't afford it at this point. If my home becomes flooded as a result of hurricane waters (either the ground becomes so saturated that it can absorb no more rain and the standing rain water rises enough to enter my home or because of storm surge...my home is located two blocks from a tidal creek that empties into a river which is about five or six blocks away) will insurance pay off for hurricane driven water damage done to my home? Or will they isurance company claim that hurricane coverage only applies to wind damage?

[ellenfl]

11. i think that is exactly the conundrum of katrina.

the insurance companies would not pay for flooding even though it resulted from the hurricane. you had better get flood insurance . . . or stilts for your funiture.

ellen fl

[kcass1954]

13. If your house floods because of rising water or the ground is too

saturated, you would only be covered if you had a flood policy.

If your house floods because excessive winds blew the roof off, your "hurricane" policy would pay.

If you can get the hurricane coverage through your regular insurer, consider yourself lucky. For most of south FL east of I-95, hurricane coverage is not available through private insurers; homeowners are covered through the Florida Windstorm Underwriting Association. My ex paid $700 for his homeowner's and $2200 for the hurricane coverage last year - no idea what it's going up to at renewal time.

[madfloridian]

12. They are also cancelling older homes in historic districts.

It is getting scary.

[AndyTiedye]

14. They Already Won't Insure Against Earthquakes Out Here In California

You have to get insurance from a state agency.

[Virginia Dare]

16. That's exactly what they're after...

shift the worst of the liability onto the taxpayers.