The recent pandemic has pushed issues like climate change to the back of the minds of many people. However, the problem isn’t going away. Concern over climate change has even worked its way into the insurance industry. Insurance providers have begun making changes to their home insurance policies, restricting claims and increasing premiums for many homeowners. Over time, we can expect to see home and condo insurance costs continue to rise. Here are some of the reasons why.
The Frequency of Payouts is Increasing
As we continue to see an increase in the frequency of volatile and violent weather incidents around the country, more home insurance claims are being filed. Insurance companies report that the value of those claims is also increasing as homeowners experience more severe damage, and the cost of repairs goes up. Same Goes for Condo Insurance
Even condo owners are feeling the impact of climate change. While individual unit owners are not required to carry insurance, condominium associations are required to, by law, in most states. As the rates for this insurance increases, the cost is generally passed directly on to unit owners in the form of higher maintenance fees or special assessments.
Tie In With Health Insurance
There is some evidence that with more home insurance claims resulting from weather and natural disasters, there is a corresponding increase in healthcare claims. Homeowners have to deal with disruption, loss of their home and property and sometimes a temporary loss of their employment as they recover from a natural disaster. Health insurance claims are made to help offset costs.
Supporting Research and Education on Climate Change
How then are insurance companies dealing with these changes? Raising rates is one way, however, companies recognize that homeowners cannot bear the brunt of the entire cost. To protect their profitability, some home insurance providers have removed certain types of coverage from their standard policies. In other cases, homeowners living in areas considered high risk for flooding, forest fire, or other events have been denied insurance coverage. In addition, companies have begun setting up advisory boards and contributing money to agencies that research solutions and educate the public on what can be done to minimize climate change.
In the meantime, as a homeowner, you can do your part to make your home less prone to events like severe basement flooding and physical damage caused by storms. Doing so may not stop rates from increasing now, but protects you from loss and stress, and makes your home appear less risky to insurance providers.
We are home insurance experts and can help you find home and condo insurance to fit your needs at a price that you can manage. Call us at (248) 362-1313 to discuss your home and find a policy that is right for you.
