2017 was a record year for natural disasters. Hurricanes, fires, and flooding plagued much of the nation, and the total cost blew previous records out of the water. 2005 represented the previous record, with Hurricane Katrina and Rita racking up $214.8 billion in damages. In 2017, natural disasters totaled more than $300 billion in damages. As a result, many insurers are taking a harder look at how they incorporate climate-related risks into their long-term and sustainability planning.
Insurers Reigning In Coverage
Many insurers are now relying on high-tech modeling to get a better idea of risk areas and what counts as a risk factor. As a result, insurers may limit where they offer for coverage, such as restricting offerings for areas at high risk for tornadoes or wildfires. Homeowners need not panic quite yet, though. Insurers are not permitted to cancel policies during the contracted term and many must renew for the following year beyond the term’s expiration. After that, however, they do not have to renew the policy. They also do not have to renew policies in non-disaster areas, so those less at risk may find themselves without coverage.
Insurers Preparing Clients
Even though some insurers are reducing coverage options in high-risk areas, they are not leaving their clients high and dry. Many insurers are taking steps to educate homeowners in riskier areas of the natural disasters that can affect their home. This includes how to prepare for climate-related weather to reduce damage and protect personal property.
The Reilly Group can help homeowners determine if they live in areas at risk to natural disasters. Common examples in the Midwest include tornadoes and hail storms, though flooding and other climate damage is also a potential source of risk. If you’re at risk, we can help you determine what kind of coverage you need as well as steps to take to mitigate the likelihood of climate-related damage. Contact us today to learn more.