Have you ever tried to secure homeowners insurance in NY when a hurricane is barreling your way? Not going to happen. As inconvenient is it may be, you need to have your bank or mortgage company reschedule your closing for another day because most, if not all insurance companies will not bind insurance in NY if there is a major storm due to hit. Likewise for NY car insurance as well. At a dealership getting a new car? You might not be able to get full coverage on it during a binding moratorium.
Obviously a hurricane, not unlike an earthquake can cause a concentrated amount of damage in a small area. Multiply that by the wide area a hurricane can hit at once and you have the recipe for disaster. Remember Katrina? Most people dislike insurance companies for this reason, but they forget, the insurance companies have to make a profit too or they will go out of business. If they go out of business, millions of existing policy-holders could be left holding the bag, without any coverage.
In summary, moratoriums in the wake of a potential natural disaster actually protect existing insurance customers as much as it protects insurance companies.
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