Long Islanders Losing Home Ins.

This story in the New York Times is disturbing. It explains that Liberty Mutual Fire Insurance is dropping policies on Long Island for fear of losing profit after a hurricane. This should be disconcerting to anyone on Long Island.

I have no problem with earning a profit; I have money in the stock market and I want it to grow. Still, an insurance company, as with any other company, isn’t protected from loss. I think to some degree, insurers provide a public service and so they have a responsibility to, at the very least, maintain the coverage they’ve already sold. The more corporations are allowed to beg off their responsibilities, the more they make it likely that eventually the government will have to step in.

Florida was dealing with something very similar to this, except the problems faced by the insurance companies was more profound. They’d already been hit several times before some began to withdraw. They didn’t withdraw in anticipation of paying out. That is simply disrespectful, but it seems to be the ethos these days. Anyway, the insurers stopped insuring the barrier islands and so Citizens Insurance was developed by the state. How crooked the funding mechanism is is another story. Yet, the state HAD to insure these people because such a huge portion of its economy was on the islands (e.g., tourism, vacation homes).

Personally, however, I haven’t had much reason to complain. My insurance just barely budged up about 10% of my Florida home insurance. How about you?