Declarations

Mine Worries

“We estimate that more than a million Pennsylvania homes sit atop abandoned mines, yet many homeowners are not insured against catastrophic property losses if these mines should collapse. That’s why Pennsylvania has made mine subsidence insurance more affordable.”

—Secretary John Hanger of the department of environmental protection in Pa., where premiums for mine subsidence insurance were reduced by 20 percent in 2009. It’s estimated that 1 million homes sit above abandoned coal mines, but the state-subsidized insurance program for mine subsidence has issued only 58,000 policies. It costs about $97 a year for $150,000 of residential coverage. Homeowners insurance typically does not cover damage caused by mine subsidence.

Accident Taxes

“A significant problem with this program is that it is a form of double taxation. Public safety is the primary duty of local government and firefighting services are already paid for through property and other local taxes. By billing for these services, the city imposes a hidden, double tax on consumers that could ultimately increase the cost of insurance.”

—Kristina Baldwin, assistant vice president for state government affairs at the Property Casualty Insurers Association, commenting on the proposal by New York officials to create a “crash tax” for those who receive emergency services when involved in a car accident.

Focus Shifts to Underwriting

“This year is one where underwriting discipline and managing costs are going to be more important than ever because we can’t allow the results of 2010 to delude us into thinking they are better than the true underlying numbers suggest.”

—The Hartford CEO Liam McGee, speaking at a CEOs’ round table at the Joint Industry Forum earlier this month. Several key insurance executives agreed that although the P/C industry will show a profitable year in 2010, underwriting discipline will be more important than ever to insurers in 2011.