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21-09-2023, 07:54 AM
BY KEN SWEET
Updated 12:20 AM GMT+8, September 21, 2023
NEW YORK (AP) — A growing number of Americans are finding it difficult to afford insurance on their homes, a problem only expected to worsen because insurers and lawmakers have underestimated the impact of climate change, a new report says.
A report from First Street Foundation released Wednesday says states such as California, Florida and Louisiana, which are prone to wildfires and damaging storms and flooding, are likely to see the most dramatic increases in premiums. But the fire that destroyed the Hawaiian community of Lahaina on Aug. 8, as well as the historic flooding that happened in Vermont and Maine in July, are examples of events that could drive up insurance costs for homeowners in other states.
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The U.S. homeowner’s insurance industry has had three straight years of underwriting losses, according to credit rating agency AM Best. Losses for the first half of 2023 totaled US$24.5 billion, which is roughly what was lost in all of 2022.
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There are likely to be more insurance market failures in the future, Porter said, as more insurers simply refuse to underwrite policies in certain communities or go property by property. Comparisons to the National Flood Insurance Program, which is now US$22.5 billion in debt, have become common.
Even the backstop programs are buckling under tremendous losses. Louisiana’s insurer of last resort, Citizens, raised its rates for 2023 by 63.1% statewide to cover higher costs.
This summer, reinsurance companies such as Swiss Re and Munich Re raised their property catastrophe reinsurance premiums in the U.S. by an average of 20% to 50%.
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“It used to be homeowner’s insurance was an afterthought when you are looking at buying a property. Now you’ll really need to do your research into what risks there may be in that property in the coming years,” Bevington said.
https://apnews.com/article/homeowners-in...b47c1acbbc
Updated 12:20 AM GMT+8, September 21, 2023
NEW YORK (AP) — A growing number of Americans are finding it difficult to afford insurance on their homes, a problem only expected to worsen because insurers and lawmakers have underestimated the impact of climate change, a new report says.
A report from First Street Foundation released Wednesday says states such as California, Florida and Louisiana, which are prone to wildfires and damaging storms and flooding, are likely to see the most dramatic increases in premiums. But the fire that destroyed the Hawaiian community of Lahaina on Aug. 8, as well as the historic flooding that happened in Vermont and Maine in July, are examples of events that could drive up insurance costs for homeowners in other states.
......
The U.S. homeowner’s insurance industry has had three straight years of underwriting losses, according to credit rating agency AM Best. Losses for the first half of 2023 totaled US$24.5 billion, which is roughly what was lost in all of 2022.
......
There are likely to be more insurance market failures in the future, Porter said, as more insurers simply refuse to underwrite policies in certain communities or go property by property. Comparisons to the National Flood Insurance Program, which is now US$22.5 billion in debt, have become common.
Even the backstop programs are buckling under tremendous losses. Louisiana’s insurer of last resort, Citizens, raised its rates for 2023 by 63.1% statewide to cover higher costs.
This summer, reinsurance companies such as Swiss Re and Munich Re raised their property catastrophe reinsurance premiums in the U.S. by an average of 20% to 50%.
......
“It used to be homeowner’s insurance was an afterthought when you are looking at buying a property. Now you’ll really need to do your research into what risks there may be in that property in the coming years,” Bevington said.
https://apnews.com/article/homeowners-in...b47c1acbbc
