Property Insurance Rates Rise in Coastal States
I can always reshop your insurance but this year you can expect on average a 10% insurance premium increase for home insurance and 5% increase for auto insurance. Some areas have higher increases. Property insurance rates are up across the Atlantic and Gulf coasts, with inland regions also seeing higher premiums due, in part, to revised hurricane modeling. The size of any increase varies among inland and waterfront areas. The average we are using in our part of Texas is 10%, some areas are as high as 25% for home insurance. The average increase is 5% for auto insurance. Most of the increase came after Hurricane Ike which caused storm prediction models to increase their storm costs after that storm caused 22 billion dollars in damage over 8 states. It was the most expensive hurricane ever.
Given the economic climate, some insurers are gradually increasing rates to avoid hitting policyholders with a large rate hike.
Along with model changes, industry loss rates from atypical storms in the past five years are also contributing to rate increases. Companies are now considering that the storms may no longer be freak occurrences and that they should expect and plan for them. Another reason our insurance rates are going up.
In 2011, unusual tornadoes ripped through central and western Massachusets. That year, there were also losses in inland areas of the state from icing, weight of snow and Hurricane Irene.
Some other reasons for rate increases is the increasing cost of construction materials. The cost to rebuild and repair the homes is going up – so keeping the replacement value on your home insurance in line with current cost to rebuild.
In addition, some standard carriers no longer want to write for certain areas. That means less carriers are competing for new business.
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