A Year of Natural Disasters: How Does It Affect Insurance?

Just eight months into 2011 and it has already become the costliest year for natural disasters in recorded history. In July, Munich Re (a global insurance company) estimated that the world had suffered $265 billion in economic losses, a total greater than the accumulated sum of damages experienced from all of 1982 through 1986! And that number doesn’t even include the costly damage that occurred throughout the east coast from the powerful Hurricane Irene. Damage totals from Hurricane Irene are now being estimated as high as $7 billion, a huge total for an already destructive year.

In North Carolina alone, two devastating disasters occurred in 2011, starting with the April 16th tornadoes that caused overwhelming destruction across the state and most recently the flooding and damage from Hurricane Irene. But what do all of these costly disasters mean for the insurance industry? 

As costs increase and insurance claims pile up, insurers are doing the only thing they can to stay afloat…raise the cost of insurance. While some areas don’t have to worry about hurricanes or tsunamis (like the giant one that affect Japan) physically affecting them, they still feel the effect of these disasters on their insurance rates. As the Insurance Information Institute notes, three of the 15 most expensive natural disasters in recorded history have occurred in the last 18 months, and pushing up the cost of insurance is the only option for insurers. By raising all types of rates, it allows insurance companies to somewhat cover losses from recent disasters across the world. Do you want to know if your insurance rate might be affected? Visit our website for free North Carolina insurance quotes or call Spivey Insurance Group today at 877-318-5951 to ensure that you have the proper insurance policies for you!

No Comments

Sorry, the comment form is closed at this time.