Posted On: January 12, 2007, 6:29 pm CST

Posted By: boonedoggle

The case appeared to represent a legitimate dispute as to facts; therefore I would question the basis for a punitive damage jury instruction.

The real issue is the greed of insurers aggressively marketing homeowners policies in high hurricane risk areas, then texting the contracts with complex language and a lot of cute exclusions. Argument can certainly be made that the policies failed to meet the reasonable expectation test for the purchasers.

The obvious solution for any insurer still dumb enough to remain in the coastal states is to write an "all risk" policy and include adequate load for hurricane, flood, storm surge or whatever. Approprite deductibles could provide further mechanism to properly price the risk.

Admittedly, the required premium might be say 10% of the maximum probable loss, but in this manner let the market place decide if private insurance is the appropriate mechanism tohandle hurricane coastal risk.

Perhaps the more simplistic answer is for insurers to abandon their market share greed and follow Allstate's lead and not write business within 50 or 100 miles of the coast. Sure, this might create some inconvenience for those who prefer time payments, mortgages and mortgage clause
style of purchasing houses, but again let market forces dictate the solution