In advance of the onslaught of Hurricane Isabel, some consumers along the U.S. East Coast were temporarily out of luck if they were shopping for insurance. According to Reuters, several large insurers, including State Farm, Allstate Corp. and Nationwide Financial Services Inc., ceased writing home and auto insurance policies for those in the storm’s path.
Although once a Category 4 storm, the hurricane was downgraded to a Category 2 before it blasted ashore along the coast of North Carolina Thursday. The insurance industry is nevertheless predicting high losses from the storm. Risk Management Solutions (RMS) has projected that Hurricane Isabel could cause insured losses in the $500 million range. The storm pounded North Carolina’s Outer Banks with 100 mph winds and began its ascent up the Eastern seaboard by flooding roads and knocking out power to over a million people.
It is reportedly a standard practice for insurers to stop writing policies in advance of a known and imminent catastrophe. However, apparently not all insurance companies stopped issuing new policies. Reuters reported that Progressive Corp. did not cease writing new auto coverage in the areas expected to be affected by the storm.
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