Posted On: October 19, 2007, 12:15 pm CDT

Posted By: Kent

I read about your parents and having a difficult time paying the insurance now that the house is paid for. I can understand your attitude.
I had a professor in a risk management class throw a question that you and your parents may want to consider: "Would you be willing put your savings at risk to insure a home within 10 miles of the Florida coast? If you are then, how much a year would you expect in return for taking the risk?" Would you be willing to put $170K at risk in return for an annual payback of $8,000 before taxes and expenses??? That is a return on investment of 4.75% before taxes and expenses! For me, NO - if the risk is on the Florida coast.
Both Texas and Florida have had years of population growth along their coastlines but, used lax building codes for the possible risk they may face. Building codes should have been reinforced years ago.
I will be the first to agreed that insurance company executives make unreasonably high salaries. However, people that are willing to invest in the stock of P&C insurance carriers want to make sure that the risk is well funded.