LOS ANGELES - Insurance payments to homeowners for water damage have doubled in California in the last four years and threaten to constrict the market, an industry survey released Wednesday said.
"There are concerns that we're heading for a crisis," said Candysse Miller, executive director of the Insurance Information Network of California. According to the trade group, water-related claims comprised about a third of all homeowner insurance claims filed last year in California and accounted for about 40 percent of payments.
The trade group polled companies representing 63 percent of California's homeowner insurance market. It found that their water claims increased to $430 million last year, up from $206 million in 1997.
Overall, insurers paid out as much as $2.5 billion for water-related claims between 1997 and 2001, the report estimated.
The numbers justify insurer attempts to raise homeowner premiums and to seek an exemption from covering claims for house hold mold, the industry said. Several insurance firms, including Allstate and State Farm, recently won regulatory approval for double digit rate hikes.
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