The Bay State should create a catastrophe fund as a way to ease skyrocketing coastal insurance costs, a special legislative commission has recommended in a new report.
The fund would be used to lower reinsurance costs for carriers, according to the committee, which was comprised of lawmakers, consumer advocates and industry insiders. Those savings would be passed on to homeowners in the form of lower premiums.
It was not a unanimous recommendation, however. Industry officials who sat on the panel opposed the move, saying it would increase premiums significantly for homeowners across Massachusetts.
It was not the only recommendation the committee has made. Others include:
• The creation of a public agency to review the industry’s computer models for risks posed by coastal property
• Creating homeowners policies which are fully itemized, so that consumers can see how coverage choices affect the price of a policy
• Increasing the number of premium installments for those insured through the state’s residual market, The FAIR Plan, which insures roughly four in 10 coastal properties.
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