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Homeowners in Coastal Areas Feel the Bite of Higher Premiums

Homeowners in coastal states are increasingly buying property insurance from state-run agencies, like Citizens Property Insurance Corporation in Florida. Nationally, the number of residential...
June 26, 2007

Homeowners in coastal states are increasingly buying property insurance from state-run agencies, like Citizens Property Insurance Corporation in Florida.  Nationally, the number of residential policies issued by state-backed plans nearly doubled from 1996 to 2005, according to a study by the Insurance Information Institute (I.I.I.).  Sam Miller of the Florida Insurance Council says that as other states look at their insurance programs, they should continue encouraging a private market when that market can and wants to write business.  Claire Wilkinson, vice president of global issues for the I.I.I., says insurers should be allowed to charge rates that reflect the coastal areas' actual risk.  She added that constraints on insurers distort the true cost of coverage with low-risk property owners paying more and high-risk owners paying less in premiums.

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