Saturday, June 17, 2006

Allstate Insurance Company Ends Earthquake Coverage

Allstate Insurance Company Ends Earthquake Coverage Nationwide.

In yet another sign of the deteriorating financial infrastructure in the U.S.....

Allstate is ending earthquake coverage nationwide. This abandonment of coverage & abandonment of people comes less than a year after Hurricane Katrina, when many policyholders along the Gulf Coast were literally abandoned by their insurance companies.

Because of recent disasters, such as Hurricanes, flooding, and Terrorist attacks, many insurance companies are now seeking to abandon customers and get out of their insurance obligations. This is partly due to the high cost of re-insurance (the system that insures the insurance companies themselves...and keeps them afloat after major disasters). However, the other problem that I see is corporate greed.

This appears to be a trend. It's almost nearly impossible to get flood insurance now in many parts of the country...largely due to Katrina and the recent flooding in California. In places where flood insurance is covered, it is extremely expensive and the deductibles are very high.
Many companies are looking at following the same path as Allstate.

What will this mean for Americans? There is all this talk in Washington D.C. about how we must be prepared for the next big disaster. In addition to that, Americans are being bombarded by fear with this new wave of "Disaster entertainment" coming at them constantly via Hollywood and the T.V. networks.

How can Americans be ready for a big disaster if they can't have the security of knowing that they can rebuild their homes & their lives? That kind of insecurity could have an impact on quality of life, consumer confidence, and could have ramifications for all sorts of other areas of American society.

Will the government pick up the slack? Of course not. The U.S. Treasury is broke. The U.S. debt is at an all-time high....and year to year, the country already spends more money than is covered by revenues. The government is too busy spending 8 billion dollars a month in Iraq....and there will surely be other foreign conquests that the rich men in Washington D.C. will send U.S. troops to die for.

It will be interesting to see how this will play out over the next few years. How will Americans protect their livelyhoods? How will you protect yours if other insurance companies follow the trend (and they surely will)?

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