Obviously the impact on property insurance rates should be the last thing from our minds as we watch the impacts that hurricanes have had on North Carolina and Florida. They had a death toll of over 300 people, and according to Moody Analytics are expected to have caused $20-34 Billion in property damage alone and up to $180 billion in economic loss.
I have friends and family in the Carolina’s, some specifically in Asheville so my first thought of this hurricane was overwhelmingly their wellbeing and how to help. However, my distant second though was property insurance. What was once a simple math equation for property insurance is become a larger variable than it used to be in previous years.
In 2023 the average national insurance premium for an owner-occupied house rose by 11%, in Florida the average rose 43% from 2018 to 2023, according to S&P Global. It’s too early to tell what the impact will be on insurance prices in North Carolina, but they’re sure to go up and it will most likely make what is already a bad situation worse in Florida.
However, the impact may not be as bad as you’d expect for insurance premiums. Most people have home insurance, but flood insurance still remains much less common even in the Southeast. As a result, as horrible as it is for the people of Asheville, many homeowners won’t be covered for Hurricane Helene’s damage and therefore the payouts from insurance companies will be limited which will reduce the future increase for homeowner’s insurance in the area.
Source: National Association of Insurance Commissioners (NAIC)
Source: National Association of Insurance Commissioners (NAIC)
LAND THE PLANE PLEASE
Is the sky falling? No, the ocean might be rising, but the sky isn’t falling. As natural disasters increase, the rates of property insurance will too. It will be more drastic in the locations that experience natural disasters but even places that don’t experience the same level of disasters will see increases to help insurance companies cover the costs. It just means where you could be more rule of thumb in underwriting multifamily properties in the past, now it’s more important to get quotes before closing on properties.
Thanks for reading,
Steve Parry
Sparry@WhiteBarnRealEstate.com