Earthquake Premiums Rock and Hurricane Premiums Soar.

     Lessons for Florida and the structuring of the Florida Citizens Property Insurance Corporation may be afoot.   Insurance Companies in California may pay $1,000,000,000.00 less toward Earthquake Coverage there, after a vote led by Governor Arnold Schwarzenegger on the board of directors of the California Earthquake Authority.  Consumers would pay more, an average of 8% per year more, it is reported by Marc Lifsher, "Plan Would Raise Earthquake Premiums" (Los Angeles Times Online, August 27, 2007).

     More accurately, it looks like the teaching is flowing from Florida to California, rather than the other way around.  See, for example, Anika Myers Palm, "Insurer to Drop 40,600 [Homeowners] Policies" Page C1, Col. 4 (Orlando Sentinel, Central Florida Business Section, Wednesday, August 29, 2007).  In a Special Session in January, 2007, the Florida Legislature substantially increased the amount Florida taxpayers will have to pay in the event of another Catastrophe in this State, an event reported in previous posts here.

     Whether the lessons are taught first in the East and then move West, or whether they move the opposite way, one thing is certain:  The climate for change in the Insurance industry with respect to Cat Claims is, well, catastrophic for whoever is ultimately responsible to pay, when Catastrophe strikes--and perhaps for whoever is ultimately responsible to pay before Catastrophe strikes, including right now.

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