P.J. Miller
As the climate changes and we continue to see an increase in natural disasters, homeowners may be wondering how this will impact their home insurance coverage and rates. Partner P.J. Miller provides insight on the affordability of insurance in the face of climate change.
With all the natural disasters of late, is homeowners insurance harder to get in high-risk areas for flooding or wildfires?
Yes. As new business to the insurance carriers or renewals, applications ask the underwriting questions as to those two perils – wildfire and flood. Flood is somewhat of an exception since it’s NFIP/FEMA-based underwriting but they still analyze location as to proximity of water and also wind velocity. Flood Zones A/AE are subject to significant annual rate increases, typically 25% annually.
Have you found that homeowners are being dropped or getting notice of large rate increases?
Only in those categories and proximity issues, otherwise, not necessarily widespread non-renewals or large rate increases.
Can homeowners dispute a home insurance rate increase?
In extreme cases, they might dispute with the State Department of Insurance in their respective state. Insurance rates are filed and approved for Personal Lines in each state, so it would be difficult to dispute and/or overturn a particular home or auto account rate change.
In your experience, are homeowners in non-high-risk areas also seeing increases to partially "bear the brunt" of the losses?
Rates are trending upward, not necessarily with any significant increase, but wind, for example, is definitely part of the problem. High risk area or not, wind damage to roofs, for example, are always going to occur, even in the low-risk settings.
Any experiences or stories you could share about the topic?
In Wallace & Turner’s area (Ohio), it’s considered a low to medium wind zone but that doesn’t mean we don’t have any wind claims when a non-significant windstorm rolls through and the average wind claim is $12,000 for a new roof.
What do you advise your clients to do?
Keep your roof well-maintained or replace as it nears 15 to 25 years of age.
Questions about homeowners insurance or flood coverage? Contact Wallace & Turner at (937) 324-8492 in Springfield, (937) 652-8492 in Urbana, or info@wtins.com.