Insurance Reserves

3 Months Ended

Mar. 31, 2012

Insurance Reserves [Abstract]

Insurance Reserves

10. Insurance Reserves

The Company records expenses and liabilities for losses and loss adjustment expenses for claims associated with: (1) insurance policies with Allegiant Insurance Company, Inc., A Risk Retention Group ("Allegiant") and re-insurance agreements issued by StarAmerican Insurance Ltd. ("StarAmerican"); (2) self-insurance, including workers compensation; and (3) deductible amounts under the Company's insurance policies. The establishment of the provisions for outstanding losses and loss adjustment expenses is based on actuarial studies that include known facts and interpretations of circumstances, including the Company's experience with similar cases and historical trends involving claim payment patterns, pending levels of unpaid claims, product mix or concentration, claim severity, frequency patterns such as those caused by natural disasters, fires, or accidents, depending on the business conducted, and changing regulatory and legal environments.

The table set forth below summarizes the insurance reserve activity for the three months ended March 31, 2012 and 2011.

	Three Months Ended March 31,
	2012			2011
	(Dollars in thousands)
Balance at beginning of year	$	50,459		$	52,901
Expense provisions		644			480
Cash payments		(6,181	)		(1,350	)
Balance at end of period	$	44,922		$	52,031

In the ordinary course of business, the Company makes payments from its insurance reserves to settle litigation claims arising primarily from its homebuilding activities. These payments are irregular in both their timing and their magnitude. As a result, the $6.2 million in cash payments shown for the 2012 first quarter are not necessarily indicative of what future cash payments will be for any subsequent quarter.