(image from nolevee.com… like the Onion for NOLA)
This was predictable…
New Jersey’s No. 2 home insurance provider, Allstate Insurance Co., plans to stop selling new policies in the state because of worries it could be hit with big payouts if a hurricane lashes the Garden State.
Allstate, which insures roughly 230,000 homeowners and is behind only State Farm Insurance in New Jersey, will halt all new policies for homes, condominiums and mobile homes in the state as of Feb. 5.
Sheila Breeding, a spokeswoman for the Northbrook, Ill.-based insurer, said Thursday that Allstate was not totally withdrawing from the market and would continue to renew policies held by current customers.
“Given the trends of more powerful and frequent hurricanes in recent years, we decided to take this action,” Breeding said of the company’s decision not to write new business. “The scientific data we’ve reviewed over time shows there is a real potential for major damage to occur.”
Since paying nearly $6 billion in claims over damage from Hurricane Katrina and other storms in 2005, Allstate has dropped tens of thousands of policies in Florida and lower New York state and has halted new policies in coastal areas of Louisiana and Mississippi.
As a University of Pennsylvania economist said in this LA Times article…”it is an open question whether the private insurance industry will continue to insure the coastline at all.”