Insurance industry reforming after disaster
Nearly six months after Hurricane Sandy struck New Jersey, the effects that the storm has had on the insurance industry are beginning to manifest. New Jersey is not expressly exposed to natural disasters like tropical storms and hurricanes, but the state has suffered from a direct hit from Hurricane Sandy, as well as tropical storm Irene some time before that. The damage caused by the disasters was immense, leaving thousands without homes and businesses without property. The insurance industry has worked to pick up much of the costs associated with Hurricane Sandy, but these losses are expected to be recouped very soon.
Hurricane Sandy forces insurers to look at New Jersey with more scrutiny
As with any natural disaster, the insurance industry within the U.S. shifted in the wake of Hurricane Sandy. Insurers began to look at the New Jersey market with more scrutiny, suggesting that similar disasters could be in the state’s future. Given the nature of these disasters, insurers in markets prone to hurricanes and tropical storms are exposed to significant risk in terms of property damage and flooding. In the case of New Jersey, the insurance industry is now responding to the damages it saw in the wake of Hurricane Sandy.
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Insurance rates expected to grow
The prices for insurance coverage, such as homeowners insurance, has begun to climb as insurance companies work to recover from their losses. Double-digit increases in insurance premiums are expected to be seen over the next few months. Insurers are also reforming many of their policies in an attempt to mitigate their exposure to risks. In some cases, policies are being restructured to provide more clarity concerning the coverage they offer to consumers. Other policies are limiting to coverage provided in an attempt to back away from the more costly elements of natural disasters.
Insurance industry may have the momentum it needs to make major increases in coverage rates
The New Jersey insurance industry is still reshaping itself around Hurricane Sandy and many of the changes insurers have planned for the future have not yet taken form. The insurance industry had been pushing for rate increases in the months leading up to Hurricane Sandy. The storm may have provided them with the momentum they need to get these rate increases finalized.