Allstate Drops Most Earthquake Insurance

[Beowulf]

PORTLAND, Ore. - <?XML:NAMESPACE PREFIX = AT /><AT:CLASS></AT:CLASS>Allstate Insurance Co. says it is dropping earthquake insurance to most of its 407,000 quake customers nationwide as a part of a larger move to reduce exposure to catastrophic losses. <AT:CLASS></AT:CLASS>Allstate spokesman Mike Siemienas in Chicago said four states require the company to offer earthquake coverage, but the company is in various stages of talks with regulators there.
<AT:CLASS></AT:CLASS>He said the states are Kentucky, Connecticut, Rhode Island and Florida. Additionally, the company will continue to renew earthquake coverage in New Hampshire, New York and Pennsylvania.
<AT:CLASS></AT:CLASS>Allstate regional spokeswoman Caitlin Gorand, in Bothell, Wash., said the company has not written new earthquake insurance since March 6 and announced Friday that existing earthquake policies will not be renewed.
<AT:CLASS></AT:CLASS>Siemienas said the company has declined storm renewals in some parts of Florida and New York and has taken a hard look at coastal coverage from Texas to Florida beginning with Hurricane Andrew in 1992.

http://kevxml2adsl.verizon.net/_1_22WOTO104JJGEOO__vzn.dsl/apnws/story.htm?kcfg=apart&sin=D8I0EK480&qcat=finance&ran=24732&passqi=&feed=ap&top=1

Well, if you live where Earthquakes are frequent (San Francisco, L.A, etc) then you choose the risks. Why should we all bail you out for that? I notice that less storm policies are being written for peeps who live where hurricanes visit often. GOOD!!!

[ThomasMore]

Disagree, Beo.

I think this is neither bad nor good. Unlike State action, in which the taxpayers subsidize risks whether or not they want to, this is a purely voluntary arrangement.

The insurance company is a for-profit entity, so it (should) actuarially account for earthquake risks and charge premiums commensurate with those risks. Each policyholder has the choice whether or not to do business with Allstate, so the policyholders have economic power in the situation, too.

I don't see indemnifying earthquake damage risks as being any different from indemnifying hurricane, or tornado, or fire risks, or health and accident risks, for that matter.

If the State compels insurance, or if the taxpayers are forced to indemnify risks irrespective of the economics, I have a problem. This looks like a straightforward economic decision on all counts.

[Incident_command]

I get so sick of hearing this.
There's risks to every area Beo and nobody is asking to be bailed out when they pay for insurance. For thirty plus years Florida went without a major storm while other areas had floods, earthquakes, tornados, wild fires, blizzards and such. We paid for it and insurance companies didn't have to pay out claims, so it helped to keep cost down in other areas.

In Fl you either pay a fortune for windstorm or go without. For the last three years I've gone without. On top of my homeowners, windstorm would be another 3100.00. Seeing that my home is about paid off, my deductable is 7800.00, it doesnt make sense. For me to make a claim I would need over 11,000,00 in damages. Its a CBS house with full shutters and good roof. Instead I put two grand a year into an account in case of damage.

Again for years we paid for it and went 30 years without a hurricane. Now we have a couple bad years and they bail. Hey thats business 101. I don't care.

[Rink]

PORTLAND, Ore. - <?XML:NAMESPACE PREFIX = AT /><AT:CLASS></AT:CLASS>Allstate Insurance Co. says it is dropping earthquake insurance to most of its 407,000 quake customers nationwide as a part of a larger move to reduce exposure to catastrophic losses. <AT:CLASS></AT:CLASS>Allstate spokesman Mike Siemienas in Chicago said four states require the company to offer earthquake coverage, but the company is in various stages of talks with regulators there.
<AT:CLASS></AT:CLASS>He said the states are Kentucky, Connecticut, Rhode Island and Florida. Additionally, the company will continue to renew earthquake coverage in New Hampshire, New York and Pennsylvania.
<AT:CLASS></AT:CLASS>Allstate regional spokeswoman Caitlin Gorand, in Bothell, Wash., said the company has not written new earthquake insurance since March 6 and announced Friday that existing earthquake policies will not be renewed.
<AT:CLASS></AT:CLASS>Siemienas said the company has declined storm renewals in some parts of Florida and New York and has taken a hard look at coastal coverage from Texas to Florida beginning with Hurricane Andrew in 1992.

http://kevxml2adsl.verizon.net/_1_22WOTO104JJGEOO__vzn.dsl/apnws/story.htm?kcfg=apart&sin=D8I0EK480&qcat=finance&ran=24732&passqi=&feed=ap&top=1

Well, if you live where Earthquakes are frequent (San Francisco, L.A, etc) then you choose the risks. Why should we all bail you out for that? I notice that less storm policies are being written for peeps who live where hurricanes visit often. GOOD!!!

If they have dropped their Earthquake insurance, will the insurance company pay back what the people put in for earthquake insurance or will the insurance company just take whats been paid in to date and run with the money?

Had that crap happen to me before from an insurance company.

As for San Francisco and L.A. they arent the ONLY places that are earthquake prone, you'd be quite astonished that Missouri as well as some parts of the Midwest has had some serious earthquake faults just as much, Not to mention the fact that Earthquakes can actually happen ANYWHERE on the globe, just a matter of who has more fault lines and who has less.

Earthquakes run up and down the West coast, my mother was in one in Seattle WA not long after she was married in 1946...

So it isnt always just San Fran and LA

It can happen anywhere.

My worry is the Insurance companies will just up and take the money already paid into earthquake insurance and not give it back after dropping this kind of insurance.

PS: Portland Oregon is also well prone to earthquakes, ever heard of Mt Angel Abbey? it was damaged in Oregons last minor earthquake, they found previously unknown fault lines underneath Mt Angel Abbey.

[DoctorDoom]

He said the states are Kentucky, Connecticut, Rhode Island and Florida. Additionally, the company will continue to renew earthquake coverage in New Hampshire, New York and Pennsylvania.Does anyone know if there was ever a significant earthquake in those seven states? I recall a wee one a few decades ago that was barely perceptible, but this ain't quake country. As such, the insurance is meanigless.

[Rhino]

That's what I was wondering. How does that help them avoid catastrophic claims?