Many people may find that their premiums and their deductibles will rise because of the superstorm.
The northeastern states were slammed by superstorm Sandy, generating a tremendous number of homeowners insurance claims, and have led experts in Delaware to predict that this will generate a number of changes to customer policies, including to the premiums they pay and the deductibles they face.
The direct impact of the storm was only the first stage in the damage that it caused.
Even though the damage faced by residents of Delaware led to only moderate homeowners insurance claims, when compared to those in some other states, residents and business owners are being warned that there may be some painful changes on the way. That said, it is important to note that precisely how much the changes will cost and when they will occur has yet to be decided.
It has even been implied that some homeowners insurance policies could be denied in the future.
This risk is particularly high among those living the closest to the coast. At a bare minimum, homeowners insurance companies will be reexamining the way that they measure their risks. According to the president and senior insurance adviser at Poland & Sullivan in Newark, Delaware, John Yasik, when asked about the chance of a rate increase “Is there a probability of it happening? Probably.”
Another industry expert, the Aon Risk Solutions property practice managing principal, Al Tobin, said that “I also suspect they’re going to be looking hard at deductibles.” These are the types of actions that are taken as a result of the growing financial challenges that homeowners insurance companies have been facing over the last few years. Even ahead of the superstorm, many insurers had already been battling to strengthen their revenue and handle the increasing number of claims that were coming from a series of different catastrophic events.
Moreover, before Sandy was even on the radar, homeowners insurance companies were facing a challenge from a slowing in one of their central sources of revenue: their investment incomes. Yasik explained that “they have to really pay attention now to the other component, which is underwriting profit or loss.”