Get a new one, quick?
“I’d rather see an insurance company go broke than the tens of thousands of my friends and neighbors in Mississippi, Alabama, and Louisiana go bankrupt.”
The uncertainty regarding the outcome of his potential lawsuits made me think, at first, that everyone will pay more in insurance. there will be price increases, but they will not be spread evenly across the set of policy owners. However, if we think about this extra risk like a tax it is interesting to think who might actually bear it.
Economics teaches that those who have the least ability to avoid the tax, will bear the burden of the tax. Who is least likely to bear the tax in this case? Well, owners of assets stuck in Mississippi are at the top of the list. Thus property values will take a hit as those landowners will pay much higher insurance premiums. This litigation reaction could cause serious dislocations and reductions in Mississippi specific asset values.