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