Posted On: February 20, 2007, 12:27 pm CST

Posted By: Andy

Politely my friend.

You have to remember that Insurance companies are also subject to stock holders. If a majority stock holder starts to lose money, then that stock holder will either demand that the company change it's operations to correct the loss of income or they will pull out their funds out of the company. If the company starts to lose too much stock holder money then they may go bankrupt. Then where would the policy holders be in the case of a loss?

I agree that yes the insurance companies have made money, but you do have to realize that for most of them the profits are coming from NATIONWIDE operations, not just from Florida, Mississippi or Alabama. I suspect that if you look at the amount of premium collected by state to what has been paid out you'd see that hurricane prone states have probably not been too profitable in the last couple of years for home insurance.

Note also that 2006 was a deviation from what nature has been providing hurricane-wise for the last several years. There were 10 Named storms (5 hurricanes formed well off-shore) and of those only 3 Tropical storms hit the US coast directly. In 2005 there were 28 named storms 15 of them were hurricanes and 6 of those either directly hit or brushed the US coast. The last year (before 2006)that less than 12 storms formed was in 1997. And from 1995 on at least one storm (from tropical depression on up) has hit Florida.