A leading environmental group is urging states to revise their insurance regulations so that insurance companies — not policyholders — pay for claims when state-created property insurers of last resort run out of money.
The Natural Resources Defense Council report addresses a growing problem as the withdrawal of insurance companies from hazardous areas is forcing tens of thousands of people to buy property coverage from the state insurance programs.
The programs are required to cover anyone who cannot get coverage on the private market and are authorized to impose assessments on insurers across the state if they drain their reserves.
Insurance companies usually pass the cost of the assessments to their policyholders — a practice the NRDC says should stop.
