How will the recent hurricanes affect the price of insurance?
People who live in states that do not have a risk of hurricane or tropical storm will not be substantially affected. However, increases in the price of reinsurance—insurance purchased by insurance companies—may spill over into non-coastal areas putting some pressure on premiums there. The increased cost of building materials across the country also may have an impact. For example, those with inflation-guard endorsement on their homeowners policy could see their premiums rise as policy limits and rates are adjusted to reflect escalating construction costs. In areas vulnerable to hurricanes or tropical storms, rates have been rising in recent years and they will continue to do so. That’s because the frequency and severity of catastrophic storms is expected to grow for decades to come. Insurers cannot increase rates to make up for past losses. They must be based on projections of future losses in a given state. Insurers cannot arbitrarily raise rates. Rates must be reviewed and approved b
