25 Years Later, Hurricane Andrew’s Lessons Still Resonate
Hurricane Andrew struck
Among those lessons was an awakening to
Andrew ushered in several key lessons that still resonate today, which have changed the way the insurance market works, not only in
1. Importance of strong building codes
Decades of cutting corners in construction and lax building code enforcement led to great devastation in
2. Keeping insurance available and affordable through hurricane deductibles
Hurricane Andrew was the costliest disaster in
Hurricane deductibles exist in 19 states and the
"You can find the exact dollar amount of the hurricane deductible on the declarations page of a homeowners insurance policy," said
3. Spreading
The severity of the losses from Andrew caused insurers to take unprecedented steps to reduce their future risk exposure. Those steps ranged from nonrenewal or cancellation of policies to requests for significant rate increases. As national insurers retreated, the market transitioned to new entrants forming
Insurance companies buy reinsurance for a number of reasons, and almost all reinsure at least some of their risk. Reinsurance spreads risk in a way insurers cannot do alone. With this backup capital for paying claims, insurers are able to write more direct business. Global reinsurance capital reached a new high in 2017, with more opportunities for trading risk. This adds to the stability of the marketplace and enables insurers to pay claims quickly.
4. Managing and minimizing government roles in insurance
The difference between private insurers and state-run entities is that private companies must have the money needed to pay claims in advance, while state-run companies can run deficits and tax all policyholders in the state to make up for losses. Like the FHCF,
"There hasn't been a major hurricane in
Clarksville produce supplier anything but traditional
As special session deadline looms, lawmakers work late Saturday
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