What a disaster!
How can this be possible from a business that has made its name by assuring people that they will be taken care of?
The Merriam-Webster Dictionary defines insurance as: a) the business of insuring persons or property b) coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril.
Did we miss something here?
First Safeco pulled its Alaska coverage, now Allstate is following suit.
Although there still are companies in the state that provide coverage for such disastrous events, the trend is moving away from it.
According to Sarah McNair-Grove, actuary with the Alaska Division of Insurance, Hurricane Katrina has a lot to do with it.
“A lot of insurers are concerned about their catastrophic exposure. Allstate is a big company. Whether others will follow, I don’t know,” McNair-Grove said.
She said the fact that it’s happening, though, has the state concerned.
With the upcoming anniversary of the Good Friday earthquake this week, the timing of the announcement is a little eerie.
The 1964 quake and the tsunamis it triggered caused severe damage in Southcentral Alaska, wiping out some of Seward and leveling parts of Anchorage. Its affects ranged from not being felt to violent shaking on the Kenai Peninsula. At a magnitude of 9.2, it was the most powerful earthquake recorded in North America.
That was in 1964. Imagine what a quake of even lesser magnitude could do to us these days.
Living in an area with the potential for another extreme event at any given moment leaves us with an uneasy feeling about this insurance trend. While most of us don’t carry it because of its cost, just knowing it’s there at least gives us the option to say yes or no.
McNair-Grove estimates about 20 percent or less of Alaska residents purchase earthquake insurance, but we are a state prone to earthquakes and service providers should make sure that service is there.
Luckily, all is not lost. Allstate is looking to partner with other insurance companies to offer the option, and their current policies are good until Sept. 15.
It’s understandable that the majority of insurance catastrophes occur in the Lower 48. Between hurricanes, tornadoes, flooding and winter storms, the affects on areas with high populations naturally eat up hundreds of billions of dollars in claims. But Alaska shouldn’t be left out in the cold. We have our share of life’s misfortunes, and it is unlikely Mother Nature is going to ignore us because we can’t get insurance.
There’s hope, though. According to McNair-Grove, hurricanes Katrina and Rita have reignited talk about a national catastrophe fund, which could level the playing field. That would be a policy worth looking into.
Mother Nature’s wrath in 2005 was a clear signal that Alaska is just an accident waiting to happen. We hope the right people are paying attention and don’t wait until what needs to be fixed gets broken.
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