Recently, the "News Hour With Jim Lehrer" on PBS reported on the difficulties homeowners face in obtaining insurance for new homes in New Orleans. Generally, I think the "News Hour" is a respected news program that provides in-depth coverage and strives for balanced reporting.
When I watched this segment, I learned two things–homeowners affected by last year's catastrophe are having difficulty securing new insurance policies (no real surprise to me), and insurers really look bad.
In the report, Bill Davis, from the Insurance Information Institute, defended the industry. He argued that the industry is being circumspect in the risks it assumes because it needs to protect itself from future calamities that could undermine its financial condition and still have enough cash on hand for the next round of catastrophes. He also noted that Hurricane Katrina cost insurers more than what they had collected in premium in the past 25 years in the area.
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