Why what happens in Florida doesn't stay in Florida: What Ian means for NC insurance rates
By the time Hurricane Ian barreled into northeastern
But a few hours later, the storm and the floodwaters were largely gone. Signs of the weakening hurricane were few and far between in
Unlike much of western and central
But that doesn't mean the Tar Heel State won't be feeling the financial repercussions of the storm for years to come.
The question is only when, and how much it will hit property owners in their pocketbooks.
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"Indirect impacts will be felt here in
'Locked in until 2024'
State insurance markets don't operate in a vacuum, but are linked - among other things - through companies that operate in multiple jurisdictions and impacts from the price of reinsurance, insurance for insurance companies to help insulate themselves from the risk of a major run on claims from their policyholders.
When it comes to rates, insurance companies negotiate through their state trade group with the
"That increase is locked in until 2024," said Barry Smith, a spokesman and safety officer with the state insurance department. "Customers won't see any type of increase until after that."
That's when any impacts from damages tied to Ian will likely appear in the rate bureau's proposed new rates, he added.
"But right now it's too early," Smith said of the cost of any property damage
Many homeowners are already seeing an increase in their flood insurance rates as the
But the move to develop a risk-based approach to determining premiums has seen homeowners facing sticker shock when they try to renew their federal flood insurance policies.
Earlier this year the
Existing in a global market
The massive financial losses expected in
That happened earlier this year to
The
But it might not just be the staggering payouts that hobble these insurance companies. The price of reinsurance, insurance for insurance companies to help them remain solvent after a major claims event, is steadily increasing - assuming it's even available to some companies.
Hornstein, the UNC Law expert, said the reinsurance market operates in a global context, meaning the pooled resources help insurance companies when dealing with payouts tied to the massive flooding in
But that's a double-edged sword.
"The beauty of reinsurance is it connects us to international financial markets," Hornstein said. "The downside is it connects us to international catastrophes."
He called it a "hardening market," where rates are rising for insurers -10 to 20 percent increases the past few years - as the reinsurance market tightens.
"Ian hit a
The average property insurance rate in
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Is
"We're a much healthier market," Hornstein said.
Giving flood insurance a look
With Ian in the rearview mirror, officials said now is the time for homeowners to review their policies and make sure they have enough and the right kinds of coverage - especially since hurricane season runs through November and climatologists predict storms are only going to get bigger and stronger in the future.
Smith, the spokesman with
Flood insurance is also a protection many homeowners should look into even if they're not in a flood plain, he added.
"Sure, it might not be required," Smith said. "But if you live where it rains, Commissioner Causey always says it might not be a bad idea to get flood insurance because it's not that expensive if you're not in a flood plain."
Scientists have said they expect climate change to lead to more frequent heavy rainfall events, overwhelming existing drainage systems, even as the actual number of storms is likely to decrease.
Another change tied to Ian might have nothing to do with insurance.
As they do after every devastating storm, officials are expected to look at building codes to make sure they offer the best protection for people and property that could find themselves in a hurricane's path.
"Building codes are your insurance," Hornstein said. "They're your real insurance."
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