But that, of course, would not be insurance.
When the risks are wrong
Hemant Shah will readily acknowledge that RMS' model proved to be less than perfect during Hurricane Katrina. "We got a lot of things right," he said, "but there are a few things we got wrong."
Among the wrong things: The model didn't try to estimate the cost of flooding because that's borne by the federal government. It missed the cost of pollution and of such things as power plant failures in distant locations. It underestimated the "business interruption" that came with the shutdown of the nation's Gulf Coast.
Listening to the young executive's list, it begins to sound as if the model captured most of what happened to the buildings, but missed much of what happened in between them.
But Shah and his colleagues are optimistic that problems can be fixed, the model improved. They are on the hunt for new terrain into which to expand their reach. Among the possibilities: modeling fire, one of the first dangers that the insurance industry offered to protect American homeowners against.
RMS Executive Vice President Paul VanDerMarck put it this way: "We think there are a lot of legacy assumptions built into how fire is managed and insured that may be incorrect or incomplete."
Retreating from risk
Insurance company cutbacks have left more than 1 million coastal residents scrambling to land new insurers or learning to live with weakened policies. As insurers retreat, states and homeowners are left to bear the biggest risks.
During the last two years, six insurers have stopped selling or renewing policies along the coast, especially on Cape Cod, leaving 45,000 homeowners to look for coverage elsewhere. Most have turned to the state-created insurer of last resort. The Massachusetts FAIR Plan, now the state's largest homeowners insurer, recently received permission to raise rates 12.4%.
Atty. Gen. Richard Blumenthal has subpoenaed nine insurance companies to explain why they are requiring thousands of policyholders whose houses are near any water — coast, river or lake — to install storm shutters within 45 days or have their coverage cut or canceled.