Includes thoughts and comments about energy needs, resources, conservation and their relationship to politics at home and around the world.

Friday, September 15, 2006

This will be another departure from the general energy theme. The issue in this post is property insurance. The hurricane seasons of 2004 and 2005 caused tremdous property damage in Florida, Alabama, Mississippi, Louisiana and Texas. As a result, insurance rates in those states have risen to astronomical levels. That assumes you can find coverage, which in some areas is impossible unless you are willing and able to get coverage from your state's underwriters' pool. The problem is not limited to individual homeowner policies, but to commercial property insurance as well. The issue boils down to windstorm coverage in both cases.

For many home and business property owners, it's a catch-22 situation that involves mortgages, home equity borrowing, and cost. Most if not all standard mortgage lenders require that the property on which the borrowing is made must be covered by fire, theft and windstorm insurance equal to the replacement value of improvements on the property. Until the hurricane seasons of 2004 and 2oo5, premiums for such insurance were reasonably affordable. throughout Florida and the Gulf Coast. Now, they've gone out of sight and are as much as 4 times the local property taxes typically paid.

Is it time to set up a national underwriters' insurance pool to provide coverage for all national disasters involving windstorm damage whether it be from hurricanes, tornadoes, nor'easters etc.? Just something to think about.


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