People in Minnesota and Wisconsin need not be told we’ve had more than our fair share of damaging storms during the past couple of years. No region of either state has been spared. Just about every area has seen at least a few severe thunderstorms with damaging straight line winds, lightning and small hail. But what causes the most damage are tornadoes and very large hail, and Mother Nature has delivered unusual numbers of those events, too.
We all pay for those losses even if we aren’t the primary victims. Insurance is an efficient mechanism for collectively sharing the risk of financial loss from storms and when there are many losses, we all end up paying more. We are seeing many insurance companies raising rates these days for property insurance because it seems no insurance company has been spared.
When we compare the rates of insurers we represent and compete against, we are commonly seeing increases in the 10% to 20% range. Most companies could actually justify even higher increases based on their actual payouts. But increases always tend to be softened by competition. Most companies believe things will average out over time and are willing to absorb a big chunk of the losses themselves as they await a return to better days.
So what’s a policyholder to do, aside from just swallowing hard and paying more? It’s a good time to consider things like raising deductibles and capturing additional discounts if possible. A new roof or furnace will usually earn a discount, as will packaging auto and home insurance with the same insurance company.
Blog Authored by: Ken Mogren, CPCU