Is Tornado Coverage About to Get Expensive or Scarce?
The deadly start to the 2012 tornado season is forcing insurers to reconsider the risks of coverage in the more storm-prone parts of the U.S., and industry insiders say they may have to rethink how they handle the underwriting. Unfortunately, homeowners may find themselves either paying substantially higher rates or not having insurance at all, as insurers try to manage their exposure to what is clearly a growing concern by diversifying geographically and tightening their standards. The U.S. insurance industry lost nearly $26 billion on tornadoes and related storms in 2011, higher than the previous record, and insurers have already lost as much as $2 billion this year.
Read more on tornado coverage: Insurers Forced to Rethink Tornado Coverage (Reuters 3/7/12)