Life Insurance Quote Overview

Hurricanes Katrina and Rita wrecked much of the Gulf Coast and may have also done permanent damage to the insurance business, a report from Standard & Poor's suggests. Whether homeowners and businesses in the region will be able to buy insurance in the future is in doubt.

Many long-held industry assumptions were sent reeling by the devastation unleashed upon the New Orleans region in the hurricanes' wake. S&P and the Insurance Services Office estimate that private insurers are facing 1.6 million claims, 900,000 of them in Louisiana alone.

"The aftermath has put insurance companies very much between a rock and a hard place," stated S&P credit analyst Thomas Upton. He complained that "insurers have won praise for their management of the crisis but have also been earning brickbats from the consumer press."

As for what the future, S&P notes that both State Farm and Allstate are "being very tight lipped about their future personal lines involvement in Louisiana." It also predicts that "reinsurers exposed to catastrophe-prone regions such as the Gulf are most likely to seek 30 to 100 percent rate increases, and deductibles will jump substantially."

Nor is the worst necessarily behind us. The report notes that forecasters at Tropical Storm Risk in London as well as climatologists at Colorado State University are predicting a 2006 hurricane season that will be 60 percent more active than the norm," raising the possibility of more catastrophic storms next year.

Insurers have been fighting off charges that they are trying to wriggle out of paying for damage that should be covered in homeowners policies, which normally do not cover flood damage. In Mississippi, homeowners are claiming that most of the damage was caused by wind. In Louisiana, the argument is that levee failures caused the waters to rise.

Consumers got an unexpected ally last week when Sen. Trent Lott (R-Miss.) filed suit against State Farm, claiming it had wrongfully refused to pay for damage to his Pascagoula home.

Referred from: (http://www.consumeraffairs.com)