Additionally, life insurance coverage adequacy
has declined, according to the release: "In 2010, insured households had coverage to replace their income for 3.5 years.
: The rating is sensitive to shifts in cyclical pledged revenue declines that would adversely affect anticipated coverage levels.
* For commercial lines: The best approach is to review the true business impact of a catastrophe, operational considerations, technology coverages, business interruption coverage adequacy
, flood coverages, deductibles and property value coverages.
While it would be difficult to design a grand solution that addresses all catastrophe risk issues, there are many important steps that are supported by the industry and legislators, such as improved building codes and building code enforcement and education around coverage adequacy
, that can help policyholders prepare in advance of a catastrophe event and recover when a natural catastrophe does strike.
Instead, concentrate on the broader issues of coverage adequacy
. Your board is responsible for making certain that insurance protects your organization from losses that, based on the nature and scale of association operations, are reasonably foreseeable.
: The rating is based on the continuation of sound coverage and limited new issuance plans.