Will Your Insurance Increase Due to Hurricanes?
Recent hurricane damage has been in the billions of dollars. Are your insurance rates going up because of it?
You can't help worrying about increased insurance costs on your vehicle and your home. Due to a huge amount of insurance claims with hurricanes Harvey and Irma, it's a fact that insurers will somehow need to recoup their losses.
States like Texas and Florida can brace for an impact on their insurance costs. But here in South Dakota, we could be somewhat immune.
Reason being, insurance costs are calculated geographically. In other words, what happens in Texas, shouldn't affect insurance rates in Iowa.
But I did say somewhat immune. Insurance companies can state that because of absorbing huge losses in a distant location, they are going to write less business in your area.
Or, just the demand for repairing damages itself, can drive up rates of materials and labor overall nationwide. That itself could affect insurance rates.
We have seen general rate increases over the past few years already. I think it's built in and I don't believe we'll see much change this year.
I did a little research out of curiosity to see what the hurricane-affected people have to deal with regarding their rates. I found this in a USA Today article.
It's too early to know how much Harvey and Irma could raise rates. But an analysis of average insurance premiums in states hit by some of the costliest hurricanes in U.S. history shows what could happen. For example:
- New Jersey homeowner: $926 in 2011, the year before Hurricane Sandy. $1,068 in 2013, the year after.
- New York motorist: $1,108.64 in 2011. $1,181.86 in 2013
- Mississippi homeowner: $860.66 in 2004, the year before Hurricane Katrina. $969 in 2006, the year after.
- Louisiana motorist: $1,228.10 in 2004. $1,254.66 in 2006
Estimated losses are $20 billion to $25 billion from Harvey and $40 billion to $60 billion from Irma.