Record Inflation and Natural Disasters Reshaping Property Insurance Industry

The American Property Casualty Insurance Association reports that property insurance buyers are dealing with a more difficult insurance market than prior generations. Factors contributing to the difficulties include high inflation and increased natural disasters.

In terms of inflation, it rose to 8% in 2022, peaking at 9.2% in June of 2022. However, the APCIA report also mentions that in 2022, the United States suffered 10 or more catastrophes with losses that reached over $1 billion.

Insurance experts expect that these new factors will lead to continued rate adjustments with personal and commercial property lines. It could also lead to more stringent underwriting conditions, especially in areas that are prone to catastrophic events.

How To Mitigate the Impact?

Insurance experts suggest property owners consider measures to harden their businesses and homes. You can do this by adding disaster-resistant materials. Also, consider removing piles of wood or bark from your property. If you need to keep it on your property it should be five feet away from your house or business.

It’s important to understand that building codes play a significant role in lowering losses. According to the National Institute of Building Sciences, every $1 spent on natural hazard mitigation can save $11 in disaster repair and recovery costs. This is in reference to hazard mitigation efforts within new code construction.

The Federal Emergency Management Agency or FEMA has similar guidance. It suggests that buildings that are up-to-date with building codes can lead to significant reductions in property losses from natural disasters such as floods, tropical storm force winds, and earthquakes.

Additional Measures You Should Consider

According to the APCIA, there are other helpful suggestions that you can begin implementing.

  • Install home safety devices that leverage smart technology to help predict and prevent damage or claims from occurring.
  • Ensure coverage limits reflect current costs to rebuild and update your insurance policy to reflect any increase in square footage or remodeling improvements recently made.
  • Consider adding three key coverages for increased financial protection: automatic inflation guard coverage, ordinance and law coverage, and extended replacement cost coverage.
  • Increase additional living expense coverage to cover extended reconstruction timeframes and higher rental costs.
  • Understand your policy – do you have replacement cost coverage or actual cost value coverage?

One-Stop Shop for Your Insurance Needs

COBIA Insurance has served Florida’s Brevard County and its surrounding areas since 2013. Our insurance solutions include home insurance, flood insurance, auto insurance, umbrella insurance, and more. Our commitment to customer service has earned us a 95% renewal rate with our clients.

We have a team of insurance experts that know the insurance business inside and out. Let us become your go-to location for your insurance needs whether it be personal or commercial lines.
Get started with COBIA by requesting a quote or by reaching out to one of our team members. We look forward to working with you and helping you protect what matters most.

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