No safe harbor from rising home insurance premiums

[bobcat]

As the climate changes, it spawns more related disasters. From increased wildfire danger in the western states, hurricane danger in the coastal states, and tornados and hail in the central states, it seems that finding a safe haven is almost impossible, and even if you do, the cost of the calamities still follow you. Here is the dilemma.

All the insurance companies insuring homes buy insurance from global insurance companies. That way, the risk is spread out all over the world. Reinsurance costs, the insurance that insurers buy to protect themselves, have surged by nearly 40 percent in the U.S., forcing companies to pass costs onto homeowners. This means even homeowners in relatively safe areas are subsidizing losses elsewhere through higher premiums.

Eventually, that math stops working, and insurers simply withdraw from entire regions or states. In one five-year period from 2018 to 2023, insurers canceled nearly 2 million homeowner policies in the face of rising climate risks, over four times the number that would normally be expected in a year. However, since you can't get a mortgage without insurance, this forces homeowners to go to state insurance plans (Like the California Fair Plan) to cover their home and satisfy their mortgage holder, but those plans rely heavily on buying reinsurance from the same insurance giants. So even if national companies pull out of an area, the cost of insurance, no matter where you live, will be affected by the rising cost of reinsurance.

Unfortunately, even if you've had no claims and no disasters in your area, rates can still go up.

 

[outlander]

I think both home and auto insurance is a rip off.

You have to pay for bad drivers and people who own homes in high risk areas.
You have to pay for people who make a lot of claims.

If you are a safe driver and have property in a safe area, if you haven't made any claims, why are your premiums not reflecting that?

It's not just unfair and immoral, it's bordering on illegal.

Despite any bull crap we are told, it is all for profit of course.
People with high risk properties and terrible drivers should be 100% liable for the high cost of insurance coverage. That means there would be a group of people that simply could not afford insurance because of their personal choices. The insurance companies spread that high cost to lower risk people so they don't miss out on potential customers, they make money off of everyone.

A long time ago if you were a horrible driver your insurance premiums were so high you simply could not afford to drive. But then regular drivers had to share that cost so everybody could be insured

 

[Aunt Bea]

As home values and automobile prices continue to climb it’s no surprise that the cost to insure them goes up.

For people that are still in the workforce the increases don’t seen as significant as they do to retirees.

I’m not sure that it has ever been any different.

 

[officerripley]

Our homeowners ins company told us last fall they wouldn't be renewing us and the only company we could find was the one we already had our auto insurance with. And it doubled in price ($1,500/year with the company that didn't renew; over $3,000/yr with the present company).

As to owning a home in a "high risk" area: when it comes to fire, I think almost every home is in a high risk area, some are just more high risk than others.