According to the presentation Florida, Houston and California are in crisis in regards to catastrophe risks. The numbers show every “$100,000 of increased insurance costs reduces the property market value by $1.5 million and increases between 50-500 percent are adversely affecting many portfolios.”
Adding to the fun is the fact the past two years were the worst loss years in more than 30 years and with “population growth and rising construction costs loss rates are expected to double in the next ten years.”
The risks are not only due to wind exposure but also earthquake risks with rates potentially increasing 30-to-60 percent. The Terrorism Risk Insurance Act coverage is in danger of not being renewed leaving the “private market lacking the capacity to provide sufficient coverage.”
A recommendation from the presentation is the importance of “providing detailed and accurate information about their risks to underwriters to get the best coverage and price possible.” A simple practice yet very important for saving serious money on insurance premiums.
