Wildfires in the West. Hurricanes in the East. Tornadoes in the Midwest. Blizzards in the Northeast. “Once-in-a-century” floods happen much more frequently than “once-in-a-century.” And more recently, skies over New York, Philadelphia, Chicago and other major cities filled with smoke from forests ablaze in Canada.
If disasters seem more frequent and severe, you’re not imagining it.
2022 marked the eighth consecutive year when 10 or more billion-dollar disaster events hit the United States. Over the past five years, the average total cost of these events was $119 billion per year.
As might be expected, this unprecedented rise in natural disasters of every kind has challenged the insurance industry as never before.
Within the past month, California’s largest insurers—State Farm and Allstate —announced that they would no longer issue new personal and commercial property policies in the state.
Even where insurers have continued to offer coverage, many are significantly raising rates, limiting the amount of insurance they’re willing to provide a particular property or community, and tightening policy terms and conditions.
As an example of how tough things are, in Florida, it’s now practically impossible to get a new insurance policy with wind coverage through a private insurer on properties built before 2001 unless they’ve been retrofitted since then. Last year, according to the Insurance Information Institute, rates in Florida went up by 33%, and they project an average increase of 40% or more this year.
Although new companies coming into the market is a good thing, many of those new companies have sub-standard ratings or no financial ratings at all and are one disaster away from being out of business.
As important as it may be to have property insurance, it’s only worth buying if it’s provided by a company that’s proven to pay claims fairly and quickly and has the financial strength to do so.
When your choices are suddenly and severely limited, what can you do?
You can turn to Altus and “The Power of Objectivity” that we bring to all our clients as they navigate the often challenging and frustrating insurance business.
No matter how difficult the market conditions are and may become, the Altus team works with our clients to exhaust every option available to design the most cost-effective program in the market, whether the solution ends up being a transfer of risk through traditional insurance or designing a program that assumes significant risk through high deductibles or partial self-insurance.
Our advisors are among the best and brightest in the industry. They are experts—not salespeople—who take pride in their ability to bring transparency and, even more importantly, objectivity to everything we do.
And finally, keep in mind that insurance markets are dynamic and have been remarkably resilient. We’re confident that things will get better, but it will likely take some time. As they do, we’ll actively monitor the situation through the lens of what’s best for our clients. At Altus, we put our clients first. Always.