We have had an abnormally mild and snow-less winter. That doesn’t mean that Mother Nature has been taking it easy. In fact, her activities caused about $36 BILLION in losses in 2011. Four of the Top 10 catastrophic events worldwide took place in the United States. From Hurricanes Irene and Lee, to the tornadoes in the South (and more recently in the South and Midwest), to winter storms, to tsunamis (in Hawaii and California), to flooding, even an East Cost Earthquake, insurance companies have paid out in record amounts. All but seven states had one major disaster and more than half had two or more. Pennsylvania had 3 and New Jersey had 5.
What’s this mean for you? Insurance companies rates are based on their pay outs in the past. They adjust their rates to mitigate future payouts. Bottom Line – most insurance companies are increasing their rates. The amount of the increase depends on a number of factors, but base rate increases are ranging from 5-40%. Now is the time for you to review your coverage and maximize the numerous discounts that companies now offer.
It is also the time to make sure you have essential coverages, such as Flood Insurance (which is not covered under your Homeowners policy) or Sinkhole coverage, which must be specifically added to your policy. This is where your local agent can be most beneficial. Take advantage of his expertise. You’ve worked too hard to have Mother Nature’s nasty moods ruin it for you.