http://www.insurancejournal.com/news/newswire/national/2002/12/19/24982.htm
Please do note the following:
"Nevertheless, it is true that the price of insurance is directly related to return on investment. No one (including consumer advocates) seemed to mind during the 1990s when expectations of high rates of return on investments pushed the cost of insurance downward, but it must be recognized that this is a two-way street. If investment returns diminish, then any change in underlying costs must be offset by price increases and tighter underwriting."
And Texas is a strawman argument...the homeowners insurance market in Texas is poor, and State Farm over-extended themselves in that poor market.
The issue is the ultimate circumstance of consumers not being able to afford premiums. We already see that with medical insurance, so people do not buy it or can't find it for any price. Then they show up at hospital ERs, thrown on the mercy of a hospital's ability to withstand yet more bad debt. Your airy dismissal earlier--"insurance coverage will always be with us," is so much wishful thinking Insurance can and will collapse.
State Farm is not the only insurer of homes in Texas, the larger insurance company has already bowed out. They refused to provide "mold gold" bonanzas to Texas lawyers. They can refuse, and will. Then I watch the Texas Insuarance Board try to tell the public that they can legislate coverage, force companies to write policies...it'll be amusing to watch them try.
Homeowners insurance has always been the most reasonable of my insurance expenses, and now I'm watching it climb like my car and other insurance expenses. Then I read of all this litigation that involves huge settlements against home insurers, staggeringly over and above the value of the actual home. The first volley of the mold litigation involved a Texas home worth $1M, and the jury awarded $32M. The insurers drew the reasonable conclusion that they could expect no reason from the officers of Texas courts, and withdrew.
Insurance is my family's single biggest expense. If it continues to climb at its present rate, I'm going to have to reduce my coverage in a few more years. If I, who live within my means, must face this, you can be sure that there are many, many profligates out there who have already made that decision.
I suppose I'm naive enough to believe that insurance is a citizen's responsibility to his fellow citizens. I think this notion has long since faded from view. It is certainly a sour experience to read of lawyers behaving like Vandals within a system designed to help the injured--knowing that every time I make a premium, some lawyer makes a fool of me.
How much better it would be to steward our resources, to make sure the injured get some coverage rather than none at all--which is where we are headed.