Although many have finished cleaning up from last week’s storms, their damage continues.
Paying for home insurance can be stressful, even if there is no damage.
Insurance firms in Minnesota claim to have lost money for the past five years running. Now, some people are paying an extra $1,600 or more for coverage.
If nothing changes, this pattern will simply continue.
While most of us associate a hurricane with felled trees and power disruptions, Aaron Cocking sees dollars, cents, and an unwavering pattern. He is the president and CEO of the Insurance Federation of Minnesota.
“I don’t think it’s a surprise to anybody that the insurance market is a challenge right now,” Cocking told reporters. “The current price we pay for insurance premiums is a direct outcome of climate change. The wind and hail that we’ve been seeing on an unprecedented scale in the previous few years have just not allowed insurance to catch up.”
As a result, insurance firms have lost money in six of the last seven years and have increased their premiums to compensate.
“We’ve seen premium increases of 20 to 30% per year; they’ll need to keep up that pace to make money,” insurance analyst Mark Kulda said.
According to Kulda, corporations are now looking for additional methods to minimize costs.
“We’ve noticed that insurance companies are reducing their coverage. They’re either exiting the market, making it more difficult for policyholders to obtain their insurance, or reviewing the policies and withdrawing benefits that they previously provided to consumers,” Kulda said.
As a result, the state receives twice as many complaints from homeowners about out-of-pocket expenses and refused claims.
With no signs of these storms abating anytime soon, both men believe this story should serve as a reminder to study your policy and maybe shop about.
Inflation, labor expenses, and supply costs are all contributing contributors to rising insurance prices.