Risky Travel Choices and Insurance Coverage

It is a well-known fact that many insurance companies refuse to offer coverage to home and business owners and renters who choose to live in areas that frequently experience horrible weather and geologic conditions, such as earthquakes, floods and hurricanes. Those insurers that do offer coverage typically provide it at incredibly high premium rates.

 

NASA’s recent travel warning  related to Pacific Ocean Typhoon Songda and the subsequent downgraded storm that battered the West Coast this Saturday has brought up another question regarding insurance: Should people who knowingly choose to travel during severe weather and geologic events be allowed to submit claims to their insurance companies? Insurance companies expect people to do everything in their power to prevent an accident. If that were not the case, companies would not investigate the events that happened before an accident. When enough insured persons do things that help accidents along, such as drive to a fast food restaurant in the middle of a major storm when there is plenty of food in their home or drive into a known advisory area, companies often raise rates for everyone. Some people have begun to wonder if the best way to prevent rate increases would be a rule that requires all companies to drop those who make these types of critical errors in judgement.

 

Research into the psychology related to weather warnings though suggests that some people should not be held accountable for their decisions. Many people do not trust weather predictions because of past false alarms.