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Just spoke to a friend who purchased a house after Katrina that did NOT flood in the Katrina affected area insurance was 00 / year. Now rates are $ 4500 / year same coverage same company. NO CLAIM. WHat?s the deal? How can they do this? Flood Insurance covers if the house floods. SO why are the rates so high?
What is everyone else paying in Louisiana and what part of Louisiana are you in?
I am looking to buy a home but cannot afford $ 375 / month just for insurance.
Chosen Answer:
The deal is, everyone is trying to file wind claims. Because the majority of people on the Gulf coast do not have flood insurance, this is the only way they could hope to get money.
The insurance companies began to dispute these claims. Saying the damage was due to flood, not wind. The courts have now begun to mandate the insurance companies to pay, even on some claims that were blatantly flood damaged.
The insurance companies are terrified that if another disaster like this struck, they would be left to fit the bill regardless of any exclusions (flood) they have in their Homeowner?s policies. So, to defend themselves from potential bankruptcy, they have begun to pull out of the area all together. Your insurance premium is very high, because frankly, they don?t want your business. It?s too much risk for them, thanks to your local court system.
by: Nate W
on: 26th March 07
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