A northeastern Slabber sent me this Cape May County Herald story this morning and I didn’t get far before I almost fell off my chair laughing:
The problem is proximity to the ocean and the amount of losses suffered from Hurricane Katrina and other storms in the southern half of the nation. He said Hurricane Katrina put a number of insurance companies out of business.
Please name us slabbers one such company of any consequence. You simply shake your head seeing the myth of insurer insolvency repeated verbatim. The Herald has been punked.
The reality of the great coastal wind insurance shaft is not lost on the politicos that represent our coastal brothers and sisters in the northeastern US. And I use the term brothers and sisters because this thread I did in April is like Cecil Turtle, never burning up page views but getting us slow and consistent traffic from the Jersey shore. Just last month their politicians confirmed it in Bay St Louis. Northeastern seaboard US Reps Hoyer, Larson, and Israel publicly proclaimed they knew our pain. Our fate had become their fate. Nearly one month later NFIP re-authorization still hangs in the balance and coastal America’s wind problem remains.
In fairness to the Travelers, our new readers should know they were proactive in letting us know about their proposed 4 pillars plan and their interest in finding a solution to coastal wind/multi peril insurance availability.
Here is another excerpt from the Herald story on the loss of insurance markets in the Cape May area:
Travelers looked at the possibility of a hurricane of that magnitude hitting the northeastern U.S. that would do damage that exceeded Katrina and “greatly jeopardize their strength as a company.” He said there is coverage available for those who are dropped but it is not from most major insurance companies.
“The majority of business that is being non-renewed is having to go to what we call the excess market,” said Hicks. “The excess market is your Lloyds of London, your Scottsdale, these are companies that come in to play to write the risk that the regular companies don’t want.”
He said the premium for those companies is generally double what the previous coverage cost.
Hicks said non-renewal of polices could also take place in Cape May, the Wildwoods and other barrier island cities and possibly in Villas for bay side properties.
If you live in a town such as Court House, one that is one to two miles from the water, you have less risk of not being renewed by your insurance company, he said.
Homeowners insurance does not cover flood damage. Property owners must purchase federal flood insurance each year. A West Cape May homeowner told the Herald her federal flood insurance premium for this year was $1,500.
State Farm Agent Rob Gleason, of Rio Grande, said policyholders received 60 days notice of non-renewals. He referred the Herald to State Farm’s Public Relations Department.
Gleason said he could find other homeowners coverage for those who are not renewed through New Jersey Insurance Underwriters Association (NJIUA) which is an association created by the Legislature of New Jersey in 1968 to provide essential property insurance to any person unable to obtain insurance from a voluntary company.
Makes our buddy Steve look like a prophet, Sop.
Wonder how many more of our states will get slabbed by the “burn em and make em beg” strategy to transfer risk to the taxpayers and money to the industry?