Insurance companies are well covered
Flood water nearly covers a street sign in Cedar Rapids, Iowa. The city continues to evacuate residents as water from the rain-soaked Cedar River continues to rise.
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Bob Moon: We're wrapping up the first half of the year and these times have been downright biblical: Tornadoes, hail, floods... Now wildfires blazing through Northern California have destroyed at least 50 buildings.
The only thing missing, it seems, is locusts.
Insurance claims are approaching $9 billion dollars -- more than all of last year, by a couple billion.
Marketplace's Dan Grech reports on just how well the insurance industry is covered itself.
Dan Grech: The last time mid-year claims were this high was 1994, after the Northridge earthquake in Southern California.
This year, it's tornadoes which have ripped through the Midwest. Losses from the Mississippi floods will be covered mostly by the federal government.
Robert Hartwig is president of the Insurance Information Institute.
Robert Hartwig: Though it's been the busiest year in quite some time for catastrophe losses, the insurance industry overall is in quite good financial shape.
Hartwig says 2007 was the lowest year for property casualty losses in history. That's allowed insurers to accumulate a massive rainy day fund.
Hartwig: As of the end of the first quarter of 2008, it stood at about $516 billion.
The insurance industry has taken heat from consumer watchdogs for record profits in recent years. The Consumer Federation reported that from 2004 to 2007, the industry made more than a quarter trillion dollars.
Ray Bourhis: These profits are obscene.
Attorney Ray Bourhis is author of "Insult to Injury." He says despite record profits, insurance companies may use this year's heavy tornado season to justify increased premiums.
Bourhis: When they have a good year, they just chalk it up to brilliance on the part the of insurance company and when they have a bad year, they use it for an excuse to raise premiums.
With hurricane season just getting started, the bulk of claims may be yet to come.
I'm Dan Grech for Marketplace.