Due to record storm losses in 2004 and 2005, property insurance markets in some states have become stressed – and in some cases, dysfunctional.  Recent property insurance losses, coupled with data predicting that the U.S. is in the midst of a dangerous period of intensified hurricanes along the Atlantic and Gulf Coasts, have further destabilized the system.

Unfortunately, some public policymakers wrongly believe that imposing heavy-handed pricing or other regulatory requirements will solve market problems arising from the increased costs of natural disasters; in truth, these “solutions” actually make market challenges worse.

Among the proposals of some policymakers are federal catastrophe funds (also known as “Cat Funds”).  While those mechanisms may offer short-term rate relief, they also promote unwise and unsafe property development, and leave problematic cost-drivers for insurers and policyholders unresolved. 

AIA is committed to working at the state and federal levels to protect and promote an environment where accurate risk analysis and free-market principles guide our country’s property insurance markets.  It’s important for property owners, policymakers and insurers to work together to responsibly analyze and avoid unneeded risks.

Hurricane Season Links and Resources