Insurers concerned about hurricane season and want government to step in

As hurricane season rolls around, insurers are worried that the same problems which took place during the Hurricane Katrina devastation will happen again because they believe people and businesses are not prepared. According to forecasts, this hurricane season should be just as active as the past several seasons. This leaves insurance companies in a bind, and provoked some to reduce their coverage of natural disasters because of higher demand from credit rating agencies to put up more capital behind policies which place them in risk of these types of natural disasters. Lloyd’s of London is requiring its insurers are able of handling $100 billion worth of damages.

Last year’s season was the most expensive in damages totally more than $80 billion from hurricanes Katrina, Rita, and Wilma. The United States’ largest insurer Allstate recognizes the problems that natural disasters pose to the industry and are calling on the government to create a national catastrophe plan, and burden some of the costs of damages of such events.