Storm Surge; Homeowners Face Rising Insurance Costs in Hurricane Areas
Byline: Tom Ramstack, THE WASHINGTON TIMES
The insurance industry is jacking up rates for hurricane damage, and in some cases dropping coverage to stay profitable.
In the wake of Hurricane Isabel and other natural disasters, the insurers say they will be the next victims unless policyholders pay more.
"Let's put it this way," said Loretta L. Worters, spokeswoman for the Insurance Information Institute, an information clearinghouse for the insurance industry. "In 2003, there were three billion-dollar-plus disasters, including the California wildfires, Hurricane Isabel and an assortment of smaller disasters."
The insured losses totaled $13 billion, the third-highest year on record.
"How can an industry sustain itself if it doesn't have rate increases?" she said.
Virginia's Bureau of Insurance is warning residents to make sure they are adequately protected by insurance as hurricane season begins this week.
"Review your existing insurance policy carefully and make sure you understand what it does and does not cover and how the deductibles work," said Virginia Insurance Commissioner Alfred W. Gross in an advisory to residents.
Consumers who wait until a storm system develops in the Atlantic are not likely to find insurers who will sell them policies at reasonable rates, the insurance commission says.
Hurricane season runs from June 1 through Nov. 30.
Mid-Atlantic policyholders face only slight inconveniences from hurricane insurance compared with Gulf states.
In Florida, the average annual wind-storm premium has jumped more than 200 percent during the past decade to reach $1,445 this year. In Texas, wind-storm rates have gone up 30 percent over the past decade to cost an annual average of $574.
Last September, Hurricane Isabel churned through Mid-Atlantic states, causing nearly $2 billion in damage in Virginia, the District and Maryland as well as 36 deaths. Virginia got the brunt of the damage.
The hurricane added to a financial climate for homeowners insurers that already was depressed. …