Property Casualty Insurance - Overview
Property casualty insurance has become increasingly more expensive and more difficult to obtain. in the conventional and government assisted housing and the commercial markets. A number of factors account for this problem. These issues include natural disasters, mold, terrorism, market share competition and the slumping value of insurance investment portfolios. In an effort to retrench, insurers are declining to write new policies, refusing to renew existing policies, and increasing premiums on existing policies.
The availability and affordability of property and casualty insurance is essential to the real estate market’s functioning. Property casualty coverage is an underwriting requirement for conventional, government-assisted and commercial mortgages. Without insurance, lenders will not lend; without mortgages the great majority of sales transactions cannot be consummated. Without continuing insurance coverage, existing homeowners cannot remain current on their mortgage obligations and may find themselves subject to expensive lender forced-place coverage or possibly foreclosure.
Recognizing the major challenge that finding affordable and adequate insurance has become for REALTORS®, the NAR leadership has created an Insurance Task Force. Comprised of REALTORS® representing all specialties, the Task Force is charged with assessing state of affairs, exploring solutions and developing an appropriate role for NAR to help its state associations address what is now a very predictable, cyclical availability/affordability problem. The task force will meet with experts from other real estate, insurance, lending and regulatory industry organizations and firms who share our concerns. Among the topics to be considered: What is the quantifiable scope of the problem? What are the causal factors? What approaches have state insurance regulators or REALTOR® state associations taken to deal with the problem? What role, if any, is there for the federal government?
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