Record Year For Hurricanes Means Insurance Premiums To Go Up
Two thousand seventeen will go down as a record year for hurricanes in the U.S. And that means insurance premiums will be going up in storm-prone areas of the country.
But what about here in Arizona? Will we see higher rates as well? That depends on who you ask.
Loretta Worters with the Insurance Information Institute says insurers are not allowed to hike prices elsewhere to make up for recent losses due to Hurricanes Harvey in Texas and now Irma in Florida.
“It’s the same that holds true whether you hold a homeowners or commercial policy or an auto policy. In this instance, what happens in Florida would not affect Arizona," Worters said.
But other industry experts disagree, arguing that insurance companies will be forced to make up the difference in the long run in less risk-averse areas like the Southwest.
George Belokas is with the Phoenix-based actuarial and consulting firm GPW and Associates. He also assesses risk as a member of ASU’s Actuarial Science Advisory Board.
“To the extent that the insurance companies that are involved in these areas suffer significant losses or the reinsurance markets suffer significant losses, (that) could impact other areas around the country," Belokas said.
He says demand for insurance may increase as well, leading to premium increases.
Belokas feels the largest impact could be felt by those who participate in the National Flood Insurance Program, which covers almost 5 million homes and is nearly bankrupt.
EDITOR'S NOTE: The story has been updated to correct the spelling of George Belokas' name.