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Economic downturn could leave US property insufficiently insured during 2010 hurricane season

‘This year has the chance to be an extreme season. It is certainly much more like 2008 than 2009 as far as the overall threat to the East and Gulf coasts,’ said Joe Bastardi, chief long-range meteorologist and hurricane forecaster at
The threat level is likely to be above normal with seven landfalls of which five will be hurricanes, he added. Weather forecasters also expect 16 to 18 tropical storms with 15 predicted to hit the Atlantic coast and the Gulf of Mexico, more than they usual 11.
Last year was calm, but in 2008 Hurricane Ike hit a 500-mile stretch of coastline in Louisiana and Texas, triggering insured losses of roughly $11.5 billion. That made it the third most expensive US hurricane, after Katrina in 2005 and Andrew in 1992.
Bastardi said the El Niño climate pattern is rapidly weakening and the ocean is warmer in the Atlantic, which could give storms more energy. The hurricane season officially begins on June 1 and continues through until the end of November.
There is added concerns that because last year was relatively quite on the hurricane front and with many property owners still feeling the pinch due to the economic crisis, they may not have kept up hurricane insurance on their homes.
But even those who are insured could face devastation as several small start-up property insurers in Florida are heading for insolvency, leaving tens of thousands of homeowners looking for a new company as the hurricane season approaches. Florida regulators said they are working quickly to mesh the troubled insurers with larger companies to soften the impact on home and business owners.
The Office of Insurance Regulation said it has been running audits in recent weeks on smaller insurers to be certain they could pay claims if policyholders were hit with a destructive hurricane this summer