Insurance Payouts Are a Big Problem

insurance

insurance (Photo credit: Alan Cleaver)

For an update on the problems disaster victims are having collecting on insurance post disaster, see the article from Reuters  titled  Insurers rethink coverage after weather disaster payouts.  Some excerpts from the article:

As weather disasters strike with more frequency, homeowners first get hit with the destruction or total loss of property. Many are then hit with the unexpected loss of  homeowners insurance policies as insurance companies re-evaluate their financial
liabilities.

“Insurance companies have significantly and methodically decreased their financial responsibility for weather catastrophes like hurricanes, tornados and floods in recent years,” the Consumer Federation of America said in a statement after studying industry data.

The industry concedes that it is trying to avoid getting trounced by those same punishing weather patterns. “Last year (2011) was an extraordinary year for natural disasters,” said Michael Barry of the Insurance Information Institute (III), an industry trade group. “Insurers have  taken a step back to assess whether or not they can absorb severe losses.”

The Diva reported on the report from the Consumer Federation several weeks ago. See the link below.

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