[evangmlw]

New Jersey also has a very high rate of insurance fraud. This could be an underlying reason. Corruption is rampant for auto fraud and may be for homeowners as well. I work for an insurance company and write homeowners policies in Florida daily. People fail to understand the massive cost and impact that one major catastrophe can have on the industry.

State Farm nearly went belly-up when Andrew hit Miami. There recovery was stifled by the recent storms of the last couple of bad years. One major storm can wipe out an insurance companies reserves (or catastrophe funds). Many state laws require insurance companies to retain massive funds tucked away to meet claim demands.

When the states in turn refuse to allow companies to raise rates -- the alternative is a refusal to insure. If you owned a private businees insuring homes or automobiles, would you want to do business in places where statistics show you will lose money?

[ZULU]

"New Jersey also has a very high rate of insurance fraud."


I think you could have eliminated "insurance" from that statement and it would be equally true. Frauds should be persecuted, but again, the Jersey legal system is bizarre, arcane and corrupt. The Federal Government should take over operation of the entire state and conduct a thorough investigation of all its officials, its tax system, its educational system, etc.

" People fail to understand the massive cost and impact that one major catastrophe can have on the industry."

Uhh, yeah, but the reason people HAVE insurance is to protect them from catastrophes.

[goldstategop]

Given the new predictive models available to the insurance industry, its getting out of the business of insuring high risk areas like hurricane-threatened coasts. The only way people will be able to live in those areas is to dig into their pockets to cover losses. Of course, better construction can obviate 90% of the damage. Its the 10% that no one can do anything about for no well-built home can stand up to a Category 4 hurricane.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." -Manuel II Paleologus