"Insurance companies that cover property damage from catastrophes are increasingly pushing costs onto the backs of consumers and taxpayers, according to a new report from the advocacy group Consumer Federation of America."
"Corporate insurers have 'mastered' making money off hurricane coverage while keeping their own costs low, says the federation. It says that despite record-breaking damage costs from disasters over the last decade, policy providers steadily increased their surplus cash by raising rates, paying for fewer types of damage, increasing the deductibles of disaster victims and placing caps on certain rebuilding costs.
One maneuver the consumer federation called 'Draconian' involves insurers refusing to pay out any claims in which one type of damage is covered but another is not, such as gales of wind turning a home into rubble and stormwater later flooding the same property. Beyond the coverage amount, other unanticipated costs can be dumped on consumers, such as a spike in prices for construction materials or new building codes enacted after disasters."
G.W. Schulz reports for California Watch (CIR) February 28, 2012.
