An ill wind is blowing for home insurance premiums. More than a decade of destructive weather has seen coverage rates rising. Learn why and what homeowners can do.
With auto insurance, we can drive more carefully and see a reduction in premium rates. With health insurance, we can live more sensibly and reduce our chances of paying more for coverage. With home insurance, the situation is a little more complicated.
Weather events have worsened globally, and homeowners play a reactive role. Two of the most devastating disasters are earthquakes and floods with the latter, in particular, a significant threat for New Yorkers both now and in the future.
Many individuals don’t know that a standard home insurance policy won’t protect them under either of these circumstances, and that special coverage steps must be taken. This increases the monthly expense to stay safe, but there’s a good reason to consider coverage, given the dramatic damage weather causes.
Analysts see growing impacts from climate change, with New York and the Northeast making the Top 10 places where worsening weather is felt. For many Americans, an eventual clash with nature is inevitable.
The high cost of climate change for homeowners
It’s a provider’s business to stay informed on the risk, and insurers are developing methods to more accurately forecast weather events and analyze the risk profile of regions, right down to microclimates. Even if one zip code manages to dodge the elements, so many others are being hit that a collective rate increase is the only way insurers can hope to handle the massive payouts.
Insurers have begun to withdraw from areas deemed too high risk. Climate change effects are worst around a nation’s coasts, so those areas may become less and less attractive, with more homeowners choosing to live inland. This could lead to the issue of higher home concentration in more weather-friendly areas.
Wherever there’s a lot of anything—people or cars, for example—accidents increase, claims go up, and rates rise to compensate. Wherever homeowners gather to escape, hard weather will become more concentrated. Accidents will increase. Crime is likely to do so, too, leading to non-weather-related rate increases.
Sooner or later, experts believe the impact of climate change will reach us all no matter where we live, and the added cost of elemental coverage will get added to the cost of living. Nature may be beyond our control, but there are ways for homeowners to weather the storms.
Winning the weather war
The first step every homeowner should take is establishing their risk profile. This is a straightforward thing if they live in a notorious wildfire, earthquake, or other hazard zones. But boundary lines are blurring as places once considered relatively weather-safe join the lengthening list of risk areas. We recommend consulting with an experienced insurance team who can realistically assess the chances of suffering a weather event.
This can be a tough pill to swallow. In fact, our previous blog highlighted that some areas of New York are actively resisting being classified as danger zones in hopes of stalling premium rates. Checking where your address currently sits is a first step to get the full picture.
When policyholders accept how much they stand to lose, they can begin to calculate the potential financial impact—a calculation greatly aided by an effective home inventory. Knowing what’s at stake in dollars helps establish proactive and sufficient coverage.
Next, think of the weather as a very powerful burglar that’s always outside your home. Keep it out by installing storm shutters on windows and doors (including garages) and secure roofs with storm clips. Ensure the property is free from debris or potentially damaging objects, like low-hanging branches, that could impact the structure.
Admittedly, upgrading to a “hurricane-proof” home isn’t attainable without expense, but it’s a sound investment—one that could save a small fortune or perhaps even a life down the road. The same goes for taking out element-specific insurance against floods. Exercising these practical prep steps can also go a long way in delaying or mitigating that call to your insurer.
Contact the NICRIS team for tailored coverage
As a New York-based firm, we’ve got a close eye on what the weather has in store for us in the short and long term. We’re qualified to find not just the best suite of insurance solutions for your home today, but also to protect it tomorrow. Our personalized insurance review is free, so connect with us for proactive advice.
NICRIS Insurance focuses on providing clients with the appropriate suite of products to protect them, their interests, and their loved ones. If you need some insurance advice or would like a free, personalized insurance review, just drop us a line.