The article, "" begins with this paragraph:
"The Louisiana House voted to allow insurance companies more leeway to drop homeowner policies, a move supporters say will help solve Louisiana’s insurance crisis. The companies are currently banned from dropping homeowners who have been customers for at least three years.”
Insurance is a “promise to pay in the future.” With that in mind, solvency (cash must be available when the claim is made) is most important. A company can be solvent when a policy is written and be in financial trouble the next year because of catastrophic losses. Remember Hurricane Katrina?
Underwriting is the process by which an insurance company determines whether and on what basis it will accept an application for insurance. Underwriting is most important to maintain solvency.
In my opinion, it is wrong, or stupid, to force an insurance company to stay on a risk (i.e. renew a policy) when it no longer is financially able to pay claims on that risk.
I’ve been in the insurance business since 1973. When I started most of the industry operated on a local basis. Today our economies are global. The rules must be different than those of the past.
In the name of consumerism, think carefully about the consequences of the choice you make.
MIKE MANES
New Iberia
