Looking beyond recent hurricane seasons
With the increasing number of storms, homeowners may also see increasing insurance and repair costs.
The Atlantic hurricane season ended last November, but it presents an important opportunity to examine the homeowners insurance market for the year ahead, especially in Florida.
Already a substantial portion of Florida residents, including its coastal population of almost 15 million, are impacted by hurricanes. But hurricanes will continue to become a nationwide — not just a statewide — challenge.
In the next 56 years, the general population substantially affected by hurricanes will increase from 1.2 million to 10 million. As the population affected increases, we’ll likely continue to see an increase in the number of storms. In the 2019 hurricane season, for example, we saw three more storms than 2018 — 2019 yielded 18 storms while 2018 yielded 15 storms.
With the increasing number of storms, homeowners may also see increasing insurance and repair costs.
In fact, Hurricanes Harvey (2017), Maria (2017), Irma (2017), Sandy (2012), and Katrina (2005) were some of the most expensive storms in United States history. Combined, Hurricanes Maria and Irma in 2017 resulted in approximately $140 billion in losses, and 2017′s Harvey, alone, resulted in $125 billion, second to Katrina’s $161 billion.
Insurance companies may not be able to change the weather, but we can do better to help prepare and support homeowners. We can simplify coverage sign-up and offer policies for flood as well as wind damage.
Right now, most homeowners insurance policies don’t cover floods caused by storm surges, so a separate policy is needed. If floodplain maps were updated more frequently, which I foresee as a necessity with our changing weather, more homeowners could be required to have flood insurance.
As FEMA noted, “Anywhere it can rain, it can flood.” This means all homeowners could be at risk for flooding, and all homeowners could benefit from flood insurance. To mitigate this risk, perhaps flood insurance should become mandatory for all homeowners. In case this should happen, privatization may help lower prices. If more private insurers move into the flood insurance market, market competition increases, and that competition may result in lower prices for homeowners.
Beyond updating floodplain maps and offering flood insurance policies, incorporating technology is key for insurance companies. We already rely on technology to predict and track hurricanes — why not incorporate this same technology into our disaster response and proactively reach out to impacted customers/? In addition, drones can quickly provide aerial imagery to help us assess the damage and expedite claims processing.
Hurricane season may have passed, but re-evaluating how and why the insurance industry can better respond to storms should be ongoing and shouldn’t wait until the upcoming season.
Based in St. Petersburg, Fla., Angel Conlin is Kin Insurance‘s chief legal officer and is a senior insurance executive with over 20 years of P&C insurance experience in both large and small companies. She most recently spent nine years as general counsel for ASI / Progressive Home. The opinions expressed here are the author’s own. She can be reached at angel.conlin@kin.com.
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