Damage from Ian could impact on home insurance rates nationwide
SPRINGFIELD, MA (WGGB/WSHM) - As Florida residents recover from the devastation that was brought by now Tropical Storm Ian, local insurance agents are warning of possible increases on bills possibly nationwide.
Florida residents are still riding out the true impact of Ian. The Category 4 hurricane brought devastation to the area on Wednesday and ripped off roofs, brought major floods, and causing serious damage to people’s homes. Of course, that means insurance agencies will be busy in the aftermath, taking claims for losses suffered, and the effects of that could mean a dent in your wallet in the Bay State.
“This is definitely going to effect, it’s possibly a billion-dollar storm,” said John Sweeney, owner of John R. Sweeney Insurance.
Sweeney told Western Mass News that insurance companies have to buy their own insurance too, called reinsurance. Because of the storm, the price of that insurance is expected to go up and then Sweeney told us the consumer will ultimately have to absorb the cost.
“This is definitely going to be a cat loss, so reinsurance is going to go up,” Sweeney added.
What doesn’t help is the price of lumber is on the rise.
“The cost of building materials has gone up, so that means the cost to rebuild a house, so you might have bought a house that cost $200,000 to rebuild a year ago, now it costs $220,000, so therefore your insurance has to go up to 220. Therefore, your insurance rate is going to go up,” Sweeney explained.
However, most people won’t feel the effects right away.
“Over time, over the next couple of years, as rate filings are made, that’s going to be in the cost of the rate,” Sweeney noted.
The ones who may feel it the most are customers with a national insurance company, rather than a regional one.
“The regional carriers are not going to be affected as much as some of the national players who have business down in Florida,” Sweeney said.
Copyright 2022. Western Mass News (WGGB/WSHM). All rights reserved.