Insurers Support Tax-Free Savings Accounts for Natural Disasters

April 5, 2007

  • April 5, 2007 at 3:49 am
    Amazing says:
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    Do legislators REALLY think people will save for natural disasters in a tax-free account? The savings rates for retirement are depressingly low (see Roth IRA for tax-free retirement savings). We know retirement is coming, less certainty exists for the natural disasters. If people won\’t save for their own retirement, they certainly won\’t for a natural disaster.

    Besides, so many count on a government bailout!!

  • April 5, 2007 at 4:01 am
    DWT says:
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    I agree that most people would probably not use this…

    However for those who might, the dollar amounts that were identified seem inadequate. Someone with a $1,000 deductible would be able to save $2,000 in this account.

    In the event of a cat, I could see me spending that $2,000 in a blink of an eye, finding temporary housing, buying some clothes and other necessities, maybe even a down payment on a replacement vehicle.

    Seems to me that these limits should be significantly higher.

  • April 5, 2007 at 6:01 am
    Chad Balaamaba says:
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    wouldn\’t it be easier to allow people to borrow tax free from their IRA\’s and 401k/403b\’s?

    or better yet, the future social security that won\’t be there when I retire?

  • April 5, 2007 at 6:14 am
    PLJ says:
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    So let me get this correct. You still pay insurance premiums to the insurance company. In addition to this you give them MORE money towards an account similar to a IRA,that they control,in the event you suffer a catastrophic loss.

    If they do away with having to purchase insurance altogether it sounds like a great idea otherwise all the public is doing is pouring more money into an already corrupt institution that robs billions per year from the consumer and doesn\’t like to make good on the contracts already in place for catastrophic losses.
    Where is all the money people pay in for premiums going????

  • April 6, 2007 at 9:10 am
    DWT says:
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    I think what they are saying is that you can put money aside in \”YOUR\” tax free savings account to pay deductibles and other \”emergency expenses\” in the event of a catastrophe.

    Oh and Chad, do you really think that the government would come up with a simple and effective idea?

  • April 6, 2007 at 9:40 am
    Actuary says:
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    The key to this isn\’t the ability of homeowners to save for cats. They should, but they won\’t.

    Allowing insurers to build cat reserves will lower rates for consumers, because insurers won\’t have to pay taxes on artificial profits if there happens to be a low cat year.

  • April 6, 2007 at 9:51 am
    PLJ says:
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    What the heck have they thought in the past?
    There would never be a catastrophy?
    Come on. The money flows like tides. They should have and likely have thought of this happening long before now after all there thought process is supposed to be a minimum of ten years ahead on outlook that why the higher ups with the colleg degrees make the big bucks,right? Or is it?

  • April 6, 2007 at 10:27 am
    PLJ says:
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    You must be one of the lucky people that doesn\’t live paycheck to paycheck.
    The rising costs of fuel,electricity,food,taxes and insurance have not kept pace with the rise in ones paycheck.
    As much as it hurts our government has to stay with the status quo instead of trying to build empire zones.
    SAY NO TO MORE SPENDING! I know it hurts your popularity.

  • April 7, 2007 at 1:14 am
    Actuary says:
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    PLJ, I can\’t tell if your comments are intended for me, so forgive me if they were not.

    The industry has wanted this for years. It\’s only due to the heightened hurricane activity that somebody is finally listening.

  • April 7, 2007 at 9:40 am
    LJ says:
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    No not pointed towards you unless you are directly involved
    See my first comments 4/5.
    If what you say is true I would prefer to handle the money on my own.
    But as I said how do you put money away if you live paycheck to paycheck.
    Insurance companies should have been doing this for their insureds a long time ago but instead there are large payouts to CEO\’s and CFO\’s and some investors in the billions in the form of stock option sales.
    I\’m sorry but nobody is worth that kind of money. It\’s just plain wrong! Yes a performance bonus can be pid but it shouldn\’t exceed 6% of the lowest paid worker within the company.
    If and a BIG IF this were to occur there would be plenty of money to payout in the event of CAT losses. Do the math!
    We all know of course this would never happen without government involvement and major regulation overhaul with the S&E involvement.



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