Will Hurricane Michael Spike Insurance Rates?

17 Oct
Will Hurricane Michael Spike Insurance Rates?

Hurricane Michael hit Florida in the middle of October 2018. Now, only days after the devastation caused the destruction of thousands of homes, Floridians are concerned about their insurance rates. Unfortunately, whether the resident was affected by the hurricane or not, that is a valid question. After all, when devastation hits an area with such force, there is a chance flood maps could change. Yet, even if that does not occur home insurance companies are going to be looking to recoup the money that was paid out.

To add insult to injury, though, claims from 2017’s Hurricane Irma have still not been entirely resolved. While this means bad news for residents throughout the state, that also means that insurance claims are through the roof.

Early estimations equate the current claims, from Michael alone to be between two and eight billion dollars. That does not even begin to cover the backlog of claims that have yet to be paid or recovered. Thus, while the residents of Florida are the victims and deserve help, insurance companies need to recover. If the insurance companies are not able to refill their coffers, companies throughout Florida could face financial ruin. If that happens, these companies would no longer be any good to anyone.

Therefore, the answer to the question on everyone’s mind is that it depends on the company. Furthermore, though, it depends on the individual’s specific policy and claims. Sadly, in a situation like this, there is no cut and dry way to decipher an answer. The only data the companies have is that of their own losses and how much they have paid out in claims.

According to officials, though, it is likely that most insurance companies will push for an insurance rate increase. This decision must first be approved by the state but considering the situation, a modest increase is expected. Yet, there is an emphasis on modest, since the damage from both Michael and Irma was not financially debilitating. Even though the claims are backing up the price tag for the claims is not uncommon. Other Florida disasters, such as Andrew were far more devastating, which called for a much steeper increase to recoup funds.