Not only have we seen hurricanes like Milton and Helene claim hundreds of lives and homes, they have played a major role in how much you pay for homeowners insurance.
Paying more for insurance isn’t just happening in the states hit the hardest, it is happening all throughout the country.
Policymakers factor in neighborhood crime and natural disasters, and as these weather patterns happen more often some private insurance companies are priced out of the market entirely.
State Farm Insurance Agent Calvin Johnson says, for some states, the price you might pay for a policy might not be worth the risk if survivors of a storm need to make a claim.
“Let’s say your house replacement cost on it is $250,000, but the market value of that property is $79,000. So what are we going to insure it for? The market value, or the replacement cost? So you have to kind of meet somewhere in between there to come up with the right protection for the individual,” said Johnson.
Insurance providers across the country have countered the cost of severe storms by raising the average premium by 13% this year.
“The dollars, the actuarial costs, is based on claims frequency and severity. So if you’re a person who is outside of that scope, then you’ll have to go somewhere else to find a high risk plan, if you will, in order to insure your property,” said Johnson.
Private insurers stay competitive in areas like South Bend, but in states hit hardest by hurricanes and flooding, the market cannot sustain private firms and the state has to provide its own plan.
“There’s different factors that are driving rates. What is the frequency of losses due to weather in our area? What is the crime frequency in our area? What is the cost to rebuild a property? Those kinds of things,” said Johnson.
In our area, the strongest cause of a rise in premiums is the flood risk in Goshen, which spills into Elkhart and South Bend.
Goshen’s City Director of Environmental Resilience Aaron Kingsley says preserving floodplains can mitigate this type of damage.
“Those floodplains were scoured by rivers and streams over thousands of years, creating a natural place for floodwaters to move into,” said Kingsley.
Several cities in northern Indiana are increasing their tree canopy with grants from the federal government, and more coverage above means less flooding below.
“We’ve been lucky enough here in Goshen to keep significant portions of our floodplain free of significant development, but there are some other parts of town where there is important infrastructure in place within the floodplain. So that’s part of our growing awareness,” said Kingsley.
Indiana is one of 26 states in the country where premiums went up by more than 25% in the last six years.
Kingsley says there are many state policies in place to preserve the floodplains as climate projections show we are likely to see more floods in the future.
