Current:Home > StocksHere's why insurance companies might increase premiums soon-LoTradeCoin
Here's why insurance companies might increase premiums soon
View Date:2024-12-24 11:19:21
Insuring your home or other property against major disasters may become more expensive this year as the price insurance companies pay for their own coverage continues to climb.
Reinsurers, or the companies that cover policies for insurers, have upped the price they charge insurance companies by as much as 50% for catastrophe loss coverage so far this year, according to reinsurance broker Gallagher Re. Those hikes could trickle down to end customers, homeowners and businesses.
At the state level, one of the steepest reinsurance rate hikes was in Florida, where prices grew between 30% and 40% between January 1 and July 1, Gallagher Re said. However, those increases likely won't persist into the rest of the year, the broker said.
The state has seen "meaningful price increases now compounding over multiple years" but the "general sentiment is that current pricing levels are more than adequate," the report said.
Companies like Markel and Reinsurance Group offer insurance policies to insurance providers so that companies like Nationwide and Geico can lessen their own financial losses when customers file hefty claims.
Climate impact on insurance policies
Some insurance companies have come under scrutiny in recent months for halting sales of property and casualty coverage to new customers in California. Allstate and State Farm have said it's too pricey to underwrite policies in the state, which has seen record-setting wildfires and other natural disasters in recent years.
California isn't the only state where insurers are growing more cautious. Florida and Louisiana have struggled to keep insurers from leaving the state following extensive damage from hurricanes. Premiums are rising in Colorado amid wildfire threats, and an Oregon effort to map wildfire risk was rejected last year because of fears it would cause premiums to skyrocket.
Allstate, Geico, State Farm and Nationwide didn't immediately respond to a request for comment Monday.
To be sure, insurance companies in many states cannot increase customer premiums without notifying state regulators. Half of U.S. states must get prior approval before increasing rates, according to the National Association of Insurance Commissioners.
Still, possible rate increases for customers would come at a time when homeowners are already seeing elevated prices.
The cost of home insurance is projected to climb 7% nationally this year, with Florida seeing a 40% rise and Louisiana prices growing 63%, according to S&P Global Market Intelligence. Auto insurance rates have climbed compared to last year as well.
- In:
- Climate Change
Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.
TwitterveryGood! (541)
Related
- Judge recuses himself in Arizona fake elector case after urging response to attacks on Kamala Harris
- Ex-gang leader makes his bid in Las Vegas court for house arrest before trial in Tupac Shakur case
- Niners celebrate clinching NFC's top seed while watching tiny TV in FedExField locker room
- Why Sister Wives' Christine Brown Almost Went on Another Date the Day She Met David Woolley
- Supreme Court seems likely to allow class action to proceed against tech company Nvidia
- Migrant crossings of English Channel declined by more than a third in 2023, UK government says
- Are stores open New Year's Day 2024? See hours for Walmart, Target, Home Depot, Macy's, more
- How to get the most out of your library
- California voters reject measure that would have banned forced prison labor
- Dog reunited with family after life with coyotes, fat cat's adoption: Top animal stories of 2023
Ranking
- U.S.-Mexico water agreement might bring relief to parched South Texas
- 22 people hospitalized from carbon monoxide poisoning at Mormon church in Utah
- Taylor Swift and Travis Kelce’s New Year’s Eve Kiss Will Make Your Head Spin ’Round
- Finland and Sweden set this winter’s cold records as temperature plummets below minus 40
- American Idol’s Triston Harper, 16, Expecting a Baby With Wife Paris Reed
- Fighting in southern Gaza city after Israel says it is pulling thousands of troops from other areas
- Israel moving thousands of troops out of Gaza, but expects prolonged fighting with Hamas
- Klee Benally, Navajo advocate for Indigenous people and environmental causes, dies in Phoenix
Recommendation
-
Dallas Long, who won 2 Olympic medals while dominating the shot put in the 1960s, has died at 84
-
Is Social Security income taxable by the IRS? Here's what you might owe on your benefits
-
Save Up to 50% on Hoka Sneakers and Step up Your Fitness Game for 2024
-
Denmark's Queen Margrethe II to abdicate after 52 years on the throne
-
Disney Store's Black Friday Sale Just Started: Save an Extra 20% When You Shop Early
-
Green Day changes lyrics to shade Donald Trump during TV performance: Watch
-
The Rock returns to WWE on 'Raw,' teases WrestleMania 40 match vs. Roman Reigns
-
Hack, rizz, slay and other cringe-worthy words to avoid in 2024