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Record number of policies handed out by state-run insurers in 2010Posted On Wed, July 13, 2011
Last year, a record number of homeowners and businesses took advantage of state-run insurers by signing up for policies, according to the Insurance Information Institute.
The III states 3 million residential and commercial property plans were in-force in 2010, largely as a result of homeowners being unable to obtain a policy in the private market.
"The III's latest analysis adds to what is now a well-documented body of research among industry experts and government agencies that many state-run residual property insurers have morphed from markets of last resort to become major insurance providers in their states," writes Robert Hartwig, president of the III, in a report detailing the findings. Claire Wilkinson, an economist and writer of III's terms and conditions blog, also contributed to the report.
The paper indicates state-run insurers, which traditionally were only meant to serve urban property owners, are increasingly becoming major providers, particularly for homeowners living in coastal areas.
While the cost of insurance rates may prevent some homeowners from being able to sign up for a policy with a private insurer, companies not covering risk-prone areas may also preempt them from obtaining a private policy.
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