Featured Story

Mangroves move inland as seas rise

Adapting to the damaging effects of climate change, plants are gradually moving to where temperatures are cooler, rainfall is greater, f...


Insurers Shrink From Coasts

Feb 18, 2007
Insurance companies have been retreating from their coverage of coastal areas along the Eastern Seaboard of the U.S., leaving homeowners with fewer and fewer options. Allstate Corp., State Farm Insurance Cos. and Nationwide Mutual Insurance Co. - three of the largest insurers in Maryland - have moved to limit their liability along the Atlantic Coast and in some cases near the Chesapeake Bay, areas feared to be at heightened risk from hurricanes. Similar changes have been made in other coastal areas; State Farm recently decided to stop selling new policies on homes and small businesses in all of Mississippi. Companies are not only refusing new policies in coastal areas; they are raising rates, imposing higher deductibles and dropping coverage for certain claims, such as mold damage. The changes by insurance companies follow devastating coastal storms in recent years, and an explosion of waterfront development such as expensive homes and condos. Also, some forecasters are making cataclysmic predictions of a hurricane costing $100 billion in insured losses, or twice as much as Hurricane Katrina, which pounded the Gulf Coast two years ago. Risk modelers, who forecast natural disasters for the insurance industry, have changed their methods to take into account the higher sea temperatures that fuel storms. Legislators are displeased and said, "We have to send the message you just can't pick and choose based on some prediction of what may happen in the future. If things were 100 percent guaranteed, you wouldn't need insurance." Insurance companies say they could be on the hook for potentially huge payouts on natural disasters. Homeowner insurance can be an unprofitable business - insurers paid out $10.4 billion more than they earned in Florida over the past 15 years.
Share this article
Copyright © 2018 Great Red Comet-Earth Science Chronicles • All Rights Reserved.
Template Design by BTDesigner • Powered by Blogger
back to top