USA Today reports that FEMA has suspended payments of flood insurance claims until the Congress approves more funding. Those "Write Your Own" insurers that are adjusting claims have limited lines of credit and may choose not to front funds on their own credit. USATODAY.com - FEMA halts flood insurance payments
Marc Mayerson, in Insurance Scrawl, has collected a few cases pertinent to the cash crunch, which has serious consequences on those awaiting flood insurance settlements. Insurance Scrawl: Stranded without Recourse: FEMA Halts Payment of Flood-Insurance Claims
Events like this may bring home the reality of federally-subsidized insurance that encourages development in disaster-prone areas. Debate over long term cost/benefit will be healthy, but is not likely to be calm or detached.
This development is also likely to aggravate the controversy over efforts to override flood exclusions in conventional windstorm policies.
Posted by dougsimpson at November 19, 2005 11:03 AM