Residual Market Property Plans: From Markets of Last Resort to Markets of First Choice - 2010
A myriad of different programs in place across the United States provide insurance to high risk policyholders who may have difficulty obtaining coverage from the standard market. So called residual, shared or involuntary market programs make basic insurance coverage more readily available. An updated report by the Insurance Information Institute (I.I.I.) titled “Residual Market Property Plans: From Markets of Last Resort to Markets of First Choice” examines the property insurance coverage provided by Fair Access to Insurance Requirements (FAIR) Plans, Beach and Windstorm Plans, and two state-run insurance companies in Florida and Louisiana: Florida Citizens Property Insurance Company (CPIC) and Louisiana Citizens Property Insurance Corporation (Louisiana Citizens). Also discussed in detail are the plans in Alabama, Massachusetts, Mississippi, North Carolina, South Carolina and Texas. This year’s I.I.I. report, like the reports of the last two years, records the ongoing growth in the exposure base of the residual market property insurers along with the still precarious financial condition of some plans. The growth comes despite a collapse in the housing sector that has brought development in many catastrophe-prone areas to a near standstill.
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