Few activities sound more boring to the average homeowner than spending an afternoon checking insurance policies.
As storms and floods become more frequent, determining what risks their homes pose and how much damage a possible accident can cause is a growing concern for many Georgians. increase.
Rising tides, rising risks
Storms are stronger than before, and scientists note their momentum is slowing, causing storms to dump more water into concentrated areas and exacerbating flooding.
Coupled with other threats related to climate change, such as rising sea levels in coastal areas and development to pave soils that help absorb floods, insurers are forecasting more floods and greater risks to their customers and businesses. .
Georgians may have already seen changes in flood insurance policies.according to
According to experts, insurance and its price all come down to risk.
“One of the important things to understand is that over the years, the catastrophes that have affected the insurance industry have increased, caused losses, and increased the number of people exposed to those events. It’s definitely there,” Hoyt said.
When a company insures a home, it takes on the financial risk of paying out in the event of flooding, Hoyt said.
Hoyt said another important part of price equilibrium is reinsurance. In reinsurance, the company itself purchases the insurance and creates an insurance policy to transfer some of the risk to another company. Reinsurance is good in that it spreads and spreads the risk and makes the insurer less likely to fail. But in the long run insurance premiums will be higher for Georgians.
In the past,
“The flood insurance program has been in a hole for years … because of all these disasters,” McDonald said.
He said the adjusted risk rating of 2.0 will move agents from subsidized insurance to real premium rates, with prices increasing by 18% annually until Georgians reach real premium rates.
With these price increases, McDonald’s shares concern that some homeowners will cancel their flood insurance. It only takes one hard blow to inflict devastating damage.
If the homeowner has a federally secured mortgage and is in a high-risk flood area, they also need flood insurance as part of that loan. Private lenders can also provide flood insurance.
McDonald said it’s important when buying a home to find out if the building has been flooded in the past and call the city’s floodplain manager’s office to learn more about the risks. rice field. Homeowners should check with their insurance agent or company for details before purchasing insurance.
For homeowners struggling with recurring floods, McDonald said the city has several options.
worth the investment
It may seem obvious, but McDonald said flooding is costly, far more than miscalculating the need for flood insurance.Every time a house is flooded, the NFIP can be up to