NU Online News Service, July 12, 2:58 p.m. EDT
A combination of higher coastal populations, artificially suppressed rates for last-resort insurers, and the inability of insurers to charge rates commensurate with risk along the coast has driven the residual property market in hurricane-exposed states to new peaks in both exposure value and policy levels, says the Insurance Information Institute.
I.I.I. says, in a report titled “Residual Market Property Plans: From Markets of Last Resort to Markets of First Choice,” that from 1990 to 2011, policy counts in FAIR and beach and windstorm plans have grown from 931,550 to 3.3 million. Total exposure to loss during that time has gone from $54.7 billion in 1990 to $884.7 billion in 2011, an increase of 1,517 percent.
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