Hurricane Andrew was a Cat4, causing "catastrophic" damage ... if Hurricane Frances gains another 15 mph in its wind speed, it will be a Cat 5, according to recent news of this south Atlantic storm headed for the East Coast.
Consumer misunderstanding of the various flavors of "replacement cost" homeowners insurance can mean a natural disaster is a financial disaster, according to a story in The New York Times > Business > "Homeowners Come Up Short on Insurance".
Most insurance claims are not for the total loss of a home, which is where "replacement cost" coverage is most important. When wildfires strike in the West, or a Hurricane like Charley or Andrew hits in the East, folks learn far more about the technicalities of their insurance coverage. A total loss of house and contents tests the extent to which coverage applies.
The problem can be aggravated by a rise in the cost of labor and materials following a major disaster. Despite calls to prevent "price gouging," the law of supply and demand means that the need for massive amounts of lumber, shingles, siding and skilled labor after a disaster will naturally drive prices above "normal." This may leave consumers underinsured. Part of this is due to insurance marketers efforts to keep premiums "competitive" by underestimating replacement costs, and by consumer choice for the less expensive version of homeowners coverage.
The article includes sources to further information about the different types of "replacement cost" homeowners insurance coverage, and highlights the potential exposure if an agent fails to get "full coverage" when such is requested by a consumer.
EFF reports: Ninth Circuit Declares Grokster, Morpheus Not Liable for Infringement . EFF has the decision in PDF format. Sufficient non-infringing uses saved the widely-used Peer-to-Peer (P2P) technology from charges from the Recording Industry Association of America (RIAA) plaintiffs that Grokster, Sharman Networks and Streamcast Networks had contributed to copyright infringement by those using its software and systems.
The decision has been compared to the Betamax decision years ago by the United States Supreme Court.
Read more ...
Plaintiffs ("Copyright Owners" in the decision) alleged that over 90% of the files exchanged through use of the “peer-to-peer” file-sharing software in question involve copyrighted material, 70% of which is owned by the Copyright Owners. This was sufficient, argued the Copyright Owners, for a finding of vicarious and contributory copyright infringement pursuant to 17 U.S.C. §§ 501-13 (2000). In April, 2003, the District Court disagreed and granted partial summary judgment to defendant software companies, in Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 259 F. Supp. 2d 1029 (C.D. Cal. 2003) (“Grokster I”) and the Copyright Owners appealed.
The three-judge panel found that the District Court's application of the Betamax standard was correct, saying:
In this case, the Software Distributors have not only shown
that their products are capable of substantial noninfringing
uses,[fn 10] but that the uses have commercial viability. Thus,
applying Napster I, Napster II, and Sony-Betamax to the
record, the district court correctly concluded that the Software
Distributors had established that their products were capable
of substantial or commercially significant noninfringing uses.
Therefore, the district correctly reasoned, the Software Distributors
could not be held liable for constructive knowledge
of infringement, and the Copyright Owners were required to
show that the Software Distributors had reasonable knowledge
of specific infringement to satisfy the threshold knowledge
The Court's analysis found that the inherent nature of the defendants' Gnutella-type network and KaZaa-type network isolated them from knowledge of specific infringement.
A new GAO report calls for improved insurance regulator access to FBI nationwide criminal data, cross-industry sharing of regulatory enforcement data to prevent "the migration of undesireable people, or rogues, from one industry to another" and assesses oversight structures for sharing of consumer complaint data among multiple regulators. The 26 page report, titled "Better Information Sharing Among Financial Services Regulators Could Improve Protections for Consumers," is available at the GAO's website.
As damage estimates from Hurricane Charley are added up, a look back at Hurricane Andrew (Category 5 - 1992) provides some perspective. Insure.com notes that Andrew took 23 lives, destroyed almost 30,000 homes and damaged over 100,000 others. with aggregate loss over $15 billion, only surpassed by September 11 on the list of insured disasters. Source: Insure.com - home insurance - "10 years later, Hurricane Andrew would cost twice as much".
(read more ... )
As the impact of Hurricane Charley becomes better known, we will see how the insurance industry will react. Following Hurricane Andrew in 1992, while most insurers were able to pay claims and draw on reinsurance, several insurers with concentrations of insureds in the path of the storm became insolvent, and their losses fell on the guaranty fund. That fund had to borrow money to pay the flood of claims in order to stay afloat itself.
Since Hurricane Andrew, coverage provisions for windstorms have changed in Florida. We'll be seeing in coming months how those respond to Hurricane Charley as the loss statistics are added up. We'll also probably get some new cases to chew on, as we did following Hurricane Andrew in 1992.
The Insurance Information Institute provides a "Hot Topics" page with information on Hurricane Charley, which includes information about the Citizens Property Insurance Corporation, a Florida-regulated association offering full coverage and windstorm-only coverage in that state. CPIC replaced the former high risk pools, the Florida Windstorm Underwriting Association and the Florida Residential Property & Casualty Joint Underwriting Association.
The III's page includes summary data on the ten most damaging hurricanes (with dollar loss figures adjusted to 2003 dollars) and data on hurricane and hurricane-related deaths for the last twenty years.