In recent years, the insurance world has been facing a big problem that's affecting a lot of people's finances and homes. Why? Because we're seeing more and more bad weather like huge fires in Colorado and strong storms hitting the southeast. This bad weather is not only causing damage to homes but also making insurance for homes more expensive.
At the heart of insurance is a simple principle: risk assessment. The likelihood of a claim being filed dictates the cost of a policy. However, as severe weather events become more frequent and intense, these calculations grow increasingly complex. The result is an upward trajectory in insurance premiums, a trend that affects those in high-risk areas.
The 2021 Atlantic hurricane season stands as a stark example of this new norm. Marking the third-most active year on record, it spawned 21 named storms, including Hurricane Ida. Striking Louisiana as a Category 4 storm, Ida's ferocity led to the collapse of two insurance companies, overwhelmed by the sheer volume of claims. Similarly, California's battle with wildfires has pushed insurers like State Farm and Allstate to retreat from the state's home insurance marketplace, citing the untenable combination of increasing wildfire risk and escalating construction costs.
Against this backdrop of uncertainty, homeowners are urged to take proactive steps:
Consult with your Account Manager to help you identify risk mitigation strategies and recommend home improvements that could qualify you for insurance discounts.
While navigating the evolving industry of homeowners insurance may seem difficult, awareness and preparation are key. Understanding the link between severe weather and insurance costs empowers homeowners to make informed decisions, ensuring their homes—and their finances—are protected against the unpredictability of a changing climate.
Taking steps today to safeguard your home can prevent major repair costs and lower your insurance expenses in the face of severe weather.
Stay safe out there!
The National Flood Insurance Program: www.floodsmart.gov
DisasterAssistance.gov: www.disasterassistance.gov
FEMA: www.fema.gov