| Recent world events have instilled a sense of | | | | lawsuits. A well-publicized Texas lawsuit |
| fear in anyone who turns on the television or | | | | resulted in a staggering $32.1 million |
| opens a newspaper. People are more aware of | | | | decision -- extremely profitable for the |
| their vulnerabilities, and more interested in | | | | owner, potentially devastating for the |
| purchasing insurance. The irony is that the | | | | property and casualty insurance industry. |
| same disasters, disease and acts of war have | | | | |
| created a negative trend in the property and | | | | The terrorist attacks of September 11 greatly |
| casualty insurance industry, to the point | | | | contributed to the negative impact on the |
| where these types of insurance are more | | | | property and casualty insurance industry. It |
| expensive and more difficult for consumers to | | | | has been reported that property and casualty |
| obtain. | | | | insurance claims related to the events of |
| | | | September 11 totaled as much as $70 billion. |
| The property and casualty insurance industry | | | | The same event has also caused the decline of |
| posted a $7.9 billion net loss in 2001. | | | | the stock market, adding to the insurance |
| According to the Insurance Services Office | | | | industry's downward trend. |
| (ISO) and the National Association of | | | | |
| Independent Insurers (NAII), this is first | | | | This negative impact has also had a |
| time that the industry has ever reported a | | | | detrimental effect on the real estate |
| net loss. Experts predicted a negative 2.7 | | | | industry, where property and casualty |
| percent return rate for property and casualty | | | | insurance is essential. Property and casualty |
| insurance, almost 6.5 percent lower than the | | | | insurance coverage is essential when applying |
| return rate of the year 2000. | | | | for a conventional, government-assisted and |
| | | | commercial mortgage; without it, lending |
| These losses have caused a number of property | | | | companies will reject the mortgage |
| and casualty insurance companies to cut back | | | | application. Therefore, the real estate |
| in an effort to economize. One step taken to | | | | market cannot function properly if this type |
| reduce losses was to avoid adding any new | | | | of insurance is more expensive or less |
| property and casualty insurance policies. The | | | | accessible. In real estate, mortgages are |
| insurers have also purposefully stopped | | | | paramount in closing the vast majority of |
| updating or renewing existing property and | | | | sales. Without property and casualty |
| casualty insurance policies. As a result, the | | | | insurance, there won't be any mortgages, and |
| premium price of property and casualty | | | | sales in the real estate market will plummet. |
| insurance policies has increased. | | | | Moreover, without property and casualty |
| | | | insurance coverage, homeowners would find it |
| A number of factors are said to have caused | | | | difficult or impossible to maintain their |
| the property and casualty insurance problem, | | | | mortgage obligations. Lenders would be forced |
| including acts of terrorism, natural | | | | to foreclose on the property, or subject the |
| disasters, economic turmoil, and even mold. | | | | homeowners to expensive lender forced-place |
| | | | coverage. |
| The headline of one trial lawyer publication, | | | | |
| "Mold is Gold", indicated that recent court | | | | No one can contest the devastating personal |
| decisions against insurers had jeopardized | | | | consequences of natural disasters, acts of |
| profitability of the property and casualty | | | | terrorism and disease. The insurance and real |
| insurance industry. Invasive mold was | | | | estate industries are two examples of how |
| recognized as the latest household hazard, | | | | these events have had a negative impact on |
| and property and casualty insurance | | | | our economy as well. |
| policyholders were cashing in with lucrative | | | | |