Allstate drops most earthquake insurance

[UpInArms]

http://www.businessweek.com/ap/financialnews/D8I0EK600.htm?campaign_id=rss_full_topix_bwdailysub=apn_home_down&chan=db

JUN. 2 9:46 P.M. ET Allstate Insurance Co. says it is dropping earthquake insurance to most of its 407,000 quake customers nationwide as a part of a larger move to reduce exposure to catastrophic losses.

Allstate spokesman Mike Siemienas in Chicago said four states require the company to offer earthquake coverage, but the company is in various stages of talks with regulators there.

<snip>

Allstate has earthquake policies for about 22,000 of the 120,000 structures it insures in Oregon.

Aside from quake-prone California, the institute lists Seattle, Portland, Ore., New York City and Salt Lake City as among cities with high loss potential.

Piper said existing policies will be valid until they lapse. "It's not like one day they have it and the next day they don't," he said. "They can't do that, and they're not planning to do that."

...more...

[newscott]

1. It's truly amazing that all this goes on during George Bush's watch

What a tremendous coincidence that the Compassionate Conservatives preside over the dropping of America's safety nets, one by one. First 9/11, then hurricanes, now no Earthquake insurance for you!

[Warpy]

2. Last month, they dropped wind and storm damage coverage

in Florida.

Remind me, just WHAT is the business of Allstate insurance?

I guess all those MBAs in their offices think the company's business is to sleaze the maximum amount of money out of the lowest risk clients, just like the health insurance companies.

Anybody who's likely to need coverage is now out of the pool.

Insurance companies. They're the problem, not the solution.

[pooja]

3. You have to understand insurance to make statements like that

The insurance you carry with your provider Allstate, is taken and divied up among other insurers worldwide. If the risk isn't spread enough and a catastrophic event happens, then the insurer will go bust and not be able to provide any services. The fact is that you pay a certain amount for your property every year. What happened after Katrina left the insurance companies in a tough spot. They not only insure your property, but big properties. Remember seeing the casino boats thrown around like a little toy sailboat.

I agree it sucks... Someone with a better business sense than I needs to come up with a better model. but if you have a mortgage, you are required to cover the home with insurance. Its the cost of being a home owner.

[Warpy]

5. You'd think the risk would be spread adequately

over a whole COUNTRY of suburban houses, most of which will be incident free until they crumble from neglect a couple of centuries from now.

I understand spreading the risk. The problem is the 90s, when they got used to making money hand over fist in the stock market. Once the market went flat, they felt they had to make that kind of money elsewhere. So they hike premiums and reduce potential liability.

Funny how the business actually seemed to work, more or less, until the late 80s and early 90s when deregulation kicked in. Funny how they always seemed to make enough money to pay claims and stay in business until deregulation kicked in.

[Lars39]

10. That's not true:Insurers Saw Record Gains in Year of Catastrophic Loss

http://www.latimes.com/news/nationworld/nation/la-na-insure5apr05,0,3061059.story?coll=la-home-headlines

"The companies that provide Americans with their homeowners and auto insurance made a record $44.8-billion profit last year even after accounting for the claims of policyholders wiped out by Hurricane Katrina and the other big storms of 2005, according to the firms' filings with state regulator"

[RamblingRose]

4. I just got coverage with Allstate. Are there any reputable insurance co

someone would recommend?? Allstate's premiums were by far the cheapest.

[Vinca]

6. We got our annual insurance bill the other day.

No complaints (so far), but I sometimes wonder what kind of loopholes I might be missing that will allow them to skip out if the house burns down. I can't imagine any other administration allowing insurance companies to call the shots like this one does. They're dropping people in hurricane alley faster than diabetics get dropped by health insurers.

[kahleefornia]

7. quake ins. sucks anyway

We don't have it, because the premiums are very high and the coverage is very low. There was something like a $30,000 deductible.

I mean really. I may as well just rebuild the house.

[Sgent]

9. That depends on where you are

NO homeowners include quake insurance.

But quake insurance for my home is $22/yr for a 2% deductible rider to my homeowners.

[Gormy Cuss]

11. Very true. 15% of house value deductible is standard

So if the house (structure, not property) is worth $200,000, the insurance doesn't kick in unless there's more than 30K in covered damages. I have earthquake insurance just in case the Hayward fault releases but we'd be in dire straits if a few of the smaller SF bay area faults shoke off tension too.

The really scary disaster is landslides, because no insurers will cover earth movement on residences.
If your house looks like this one in Oakland, you get nothing:

[bemildred]

8. Yep, don't need insurance for catastrophic losses.

What are these bozos supposed to be good for?

[havocmom]

14. Taking your payments, investing in stock market, playing odds?

As time goes by, odds of you getting hit by a catastrophe increase, so they don't wanna deal with it at some point?

[bemildred]

15. You're better off saving your own money, the way it is.

Or forming your own local mutual insurance pool. These big corporations are just out to take your money and leave you to your own devices when disaster strikes. A giant ponzi scheme with all of us left holding the bag.

[Joanne98]

12. I wonder what they know that we don't.

[sutz12]

13. Insurance is an industry that needs to be destroyed. nt

[hunter]

16. It will be, one way or another.

You can buy off politicians but you can't change the laws of physics. Bad things will happen which will destroy that business model.

[anitar1]

17. My heart just Bleeds for the poor insurance Co.s

Maybe we will not need them anymore if they keep cutting their costs and raising ours.
Here is to the death of all the bozo companies. I have noticed that people are being encouraged"to take care of their own problems" these days, by our sterling leaders. What the hell happened to all the tax monies?? Crooks, one and all. I have not a whit of faith in anything anymore.