Insurance companies underwriting homeowner risks including the risks of catastrophic losses aren t allowed to build up reserves to cover those risks without severe penalties. We cripple the ability of the private sector to build up reserves in the good years to cover unanticipated losses when catastrophes occur. Homeowners are the ones who suffer unpaid claims, canceled policies, and sometimes inability to get insurance except through taxpayer funded and inadequate government plans. As a consumer group, we think that changes are needed to allow private insurers to reserve funds for future catastrophic losses. Consumers need to be assured that coverage will be available and reliable when they really need it.
Insurance is based on the concept that consumers pay in the present to cover risk in the future.
Let s return to that basic premise for major disasters. We need to move to a system that gives American homeowners that peace of mind.