Jan
2
2008
Yet Another Example of Insurance Saving the Day
Author: Byron UdellA power company in north-central Wisconsin lucked out thanks to insurance-sort of. They recently incurred a damage bill of about $34 million and right off the top, the insurance policy will cover $7.3 million of the damage. Getting struck by lightning is usually considered an act of God that is covered in most homeowner’s and car insurance policies but some companies-like power plants-due to the nature of their business don’t get to enjoy as much coverage in that area.
The issue at hand for Wisconsin Public Service Corp. is whether or not they can legally increase the rates that their customers pay in order to cover the $1 million deductible. This would be in addition to the fact that customers will need to find another place to get their electricity since the plant will not be able to reopen for quite some time.
Wisconsin regulators have decided that Wisconsin Public Service Corp. can get the replacement power costs from their customers when they reopen but the question of the $1 million deductible still dangles pending investigation. Power companies are required to install lightning suppression systems and Wisconsin Public Service Corp. abided by the rules. This system, however, didn’t do the job so it’s up to investigators to decide whose fault that is before they move on.
