State Farm's decision not to write new homeowners policies in Mississippi could spur new federal action regarding catastrophe coverage, according to experts.
Karen Pauli, senior analyst with Needham, Mass.-based TowerGroup, said that market actions like State Farm's in Mississippi and Allstate's throughout the country “will drive legislators to consider a national catastrophe fund, despite the fact that there are many in the government who would like to avoid this emotionally charged subject.”
Ms. Pauli also noted that Hurricane Katrina engendered a spirit of collaboration and creative problem-solving between government, consumers and insurance carriers, which faded during the relatively catastrophe-free 2006.
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