Will Severe Weather Increase Insurance Premiums?

b2ap3_thumbnail_globe-melt.jpgThe climate is changing all over the world, with global warming being the prime cause. This has surfaced a new opinion in the insurance industry. Are your home premiums going to rise because of this rise in severe weather? Homeowners are trying to find an answer to this, but all the experts have their lips sealed and are refraining from talking about this issue in front of the press or the media.

A president of a reputed insurance firm said in a statement that insurance providers have a valid reason for not giving their opinion on the matter. He added that none of them were involved with energy policies or had anything to do with them. He further said that they had no issue in discussing the weather, but no one was going to voice an opinion on the energy policy.

Whatever the professionals may say out in the public, truth is they are worried by the climatic change. Studies claim that all insurance companies and the government must formulate a proper plan that considers climatic changes. If they fail to do this, the weather severity will consume all of the funds quite rapidly in the time to come. Researchers believe that problems must be addressed right now, and if this is delayed any further, serious consequences will have to be faced.

In the past 50 years, home construction has increased significantly. Today, there are many communities that lie close to the coastal areas or the mountains, and are at even greater risks. As for storms, they have not only increased in severity, but in the frequency as well.

So what is the insurance industry doing about this? Extreme weather is becoming normal, and so something must be done, and done fast.  Insurance providers are now making use of data analysis techniques that help them in deploying an emergency team before a wildfire, flood or any other disaster hits any of their insured homes. This approach helps in limiting the consequences and the sites are evacuated in a timely manner.   Insurers are also helping planners to avoid development in areas where risks are too high.

How does all of this affect your rates? As of now, climate has not influenced home insurance premiums. The rates are currently stable, and will remain that way for a while at least. In the future, this may not apply.

Source: www.bankrate.com

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