Insured losses resulting from claims relating to Mother Nature have been climbing sharply.
Natural disaster damage has been sending homeowners insurance claims upward and, as a result, it has meant that rates for policies have been rising, too.
A new analysis showed that severe storms and other catastrophes are becoming more common.
Over the last ten years, natural disaster damage has become more commonplace and more expensive for homeowners and insurers. According to a new analysis, this is causing home insurance rates to head sky high.
The analysis was done based on data from the Insurance Information Institute (I.I.I.). The analysis showed that there were 850 natural catastrophes that occurred around the world in 2018. This was a substantial increase over the 740 that occurred the year before and the 500 that happened ten years earlier. As a result, those catastrophes are becoming increasingly expensive for insurers to cover. Over those years, they cost insurers $350 billion, and that figure represents only the insured losses.
Homeowners insurance companies have struggled to keep up with rising natural disaster damage.
As insurers continue to struggle to keep up with growing natural catastrophe costs, homeowners have found themselves experiencing sharp rate increases. This is especially true in parts of the United States that are more prone to disasters.
In Oklahoma, for example, homeowners insurance rates have skyrocketed by 78 percent since 2007. This means that in a matter of 12 years, Oklahomans are paying an average of $821 per year more for their coverage. The reason is that natural catastrophes have become far more frequent and expensive. FEMA data shows that the state has experienced 192 natural disasters since 1955, said a Forbes report.
Only one state has experienced more than that: California. That state is plagued by wildfires and has seen a tremendous 313 of Mother Nature’s catastrophes in that same span of time. That said, comparatively speaking, California hasn’t seen nearly as much of an increase in insurance rates, paying only $75 more than was the case in 2007.
Instead, it’s the states such as Kansas, Colorado and Nebraska in Tornado Alley that are seeing the highest natural disaster damage leading to home insurance rate hikes. Since 2007 Nebraska’s rates are up 74 percent, Colorado’s rates are up 75 percent and Kansas residents are paying an average of $644 more each year.