Reinsurers’ Risk Aversion Is A Major Reason For Rise In Homeowners Premiums

This story from the Insurance Journal is amazing: the Massachusetts Fair Plan, the state’s involuntary "insurer of last resort," has become the most popular insurer in parts of the state like Cape Cod, because the premium increases it intends to impose are much lower than the market rate.  As I posted about earlier, the same phenomenon has happened in Florida due to large increases in the cost of homeowners insurance along the coast.   As the Insurance Journal also points out, reinsurers are demanding premiums two or more times higher than before Katrina.  This post by Marc Mayerson isn’t specifically about homeowners insurance, but it does indicate reinsurers are finding ways of squeezing a nickel in ways other than raising premiums, such as denying claims and forcing insurers to compromise their claims.   

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