Gulfshore Insurance > Gulfshore Blog > Disaster > Natural Disaster Spike Driving 2020 Insurance Rates

Natural disasters have been on the rise in the last decade, and according to a new analysis, it’s causing a spike in home insurance rates across the country. According to the Insurance Information Institute, 2018 saw 850 “natural catastrophes” across the world—a jump from 740 in 2017 and just 500 a decade earlier. The disasters have racked up damages to the tune of $350 billion in some years – and those were just the insured losses.

A recent report noted that 2017 and 2018 brought the costliest back-to-back years on record for economic losses solely due to weather-related events. As insurance companies struggle to keep up with two years of higher-than-expected losses from natural catastrophes, homeowners may see increases in rates, particularly in more disaster-prone parts of the country.

“Every year in the United States, natural disasters account for tens of billions of dollars in damages,” the report reads. “A significant portion of those damages falls on the shoulders of insurance companies. When insurance companies experience huge loss from natural disaster-related claims, they compensate for that loss with an increase in home insurance rates.”

Average home insurance rates have risen in every state in the last decade, mainly due to natural disasters, according to the National Association of Insurance Commissioners. And Florida’s average rate is the highest in the nation. Florida tends to have most of its damages caused by hurricanes, such as Hurricane Irma, which hit the state in September 2017 and caused $11.1 billion worth of damage, with the vast majority of that to homes, according to the Florida Office of Insurance Regulation. Hurricane Michael hit Florida in October 2018, causing $6.4 billion worth of damage to the state.

You can read the full analysis of the decades’ worth of NAIC data by clicking here.