State Farm spokesman Dick Luedke said the insurer pays what it owes, whether the company makes billions of dollars, as it did this year, or losing billions, as it did in 2001.I have been a fool all this time to criticize the insurance industry. Oh, benevolent industry experts, enlighten me:
“Overpricing? Our auto rates declined in 2006 by 2.2 percent,” Luedke said. “That was the third year in a row that our auto rates have gone down.”
Industry experts argue that the property-casualty insurers did amazingly well in handling Katrina — the most costly catastrophic event ever in the United States — and the other hurricanes in 2004 and 2005.The logical conclusion for the insurance industry: Stop insuring homes in states with a coastline.
Robert Hartwig, president and chief economist with the New York-based Insurance Information Institute, points out that the industry has so far “paid $41 billion on 1.74 million claims for Katrina alone — and for the combined 2004-2005 hurricane season, we paid about $81 billion in insured hurricane-related losses.”
The industry’s profits rose in 2006 in part because there were far fewer storms, Hartwig said.
And, he added: “But the good results have more to do with the fact that insurers saw good results in auto insurance, workers comp and a variety of other areas and in states that don’t have a coastline.”
Stop writing policies. Refuse to renew existing policies less than three years old. Try to cancel as many policies as possible for other reasons.
Abandon the coast.
But, hey… I just saved a bunch of money on my car insurance!
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