Natural Disasters Are Making Your Insurance Cost More
Posted in News & Updates
Natural disasters such as hurricanes, like Hurricane Helene and Hurricane Milton, along with California wildfires, have a profound impact on the insurance and re-insurance industries. When major disasters strike, insurance companies face massive claims from policyholders to cover damages to homes, businesses, and infrastructure. Re-insurers, the companies that insure the insurance providers, also see a sharp rise in payouts to help the insurers manage these financial hits. As the frequency and intensity of these disasters increase due to climate change, re-insurance rates rise sharply to account for the growing risks. This, in turn, forces primary insurance companies to spend more on re-insurance to protect themselves against future events, leading to increased operational expenses.
These rising costs inevitably get passed down to consumers. Insurance companies, now facing higher re-insurance premiums and claims payouts, raise the prices of policies to maintain profitability and protect against future catastrophic events. Consumers across the country, even in areas not directly affected by disasters, see a rise in their premiums. This is because insurance companies spread the risk across a larger pool of customers. Therefore, while hurricanes like Helene and Milton may devastate coastal regions, and wildfires ravage parts of California, the financial burden reverberates through the insurance market, leading to higher premiums for homeowners, renters, and businesses across the country.