P.J. Miller
Coronavirus is having a massive impact worldwide, including in the insurance industry. Partner P.J. Miller spoke with Insurance Support World about pandemic/virus “claims” and the potential for financial devastation if insurance policies had to pay out for such coverage.
P.J. commented, “Being in the insurance industry (as an Independent Agency Owner), I’ve learned, or should I say had it reaffirmed, that while most commercial insurance buyers understood the fact that Pandemic/Virus “claims” are basically not covered, some see it as an attempt by insurance companies to not cover claims, “just because.” Technically, all property policies exclude (do not cover) such claims, and there’s not another source or method to buy the coverage. The same exclusionary language exists for flood, and yet flood is almost always available and usually reasonably priced; however, the number of flood policies purchased each year falls woefully short.
So, which calamity would you have bet on to wreak havoc in the U.S.? If you were offered Pandemic/Virus coverage last year, would you have laughed it off like being offered Volcano coverage?
While there aren’t many reports out yet to determine the dollar value of what would be considered covered Pandemic/Virus claims, most guesses are that it would have eclipsed the trillions that the Federal Government expended and would have caused widespread bankruptcies in the insurance industry.
The premiums currently and historically charged for property coverage contemplates known perils (fire, wind, etc.) and without calculating and charging for the potential expense of paying an excluded item such as Pandemic/Virus, it would cause the widespread, if not total devastation, in the insurance and financial markets.”
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Questions about the impact of coronavirus on your insurance coverage? Contact Wallace & Turner at (937) 324-8492 in Springfield, (937) 652-8492 in Urbana, or info@wtins.com.