Climate Change Affects the Price of Home Insurance

While purchasing new home or looking for new insurance to cover the current one, there is a lot to consider. The foremost concern is where your house is located.  For instance, some areas are likely to include more insurance claims than the homes of people who do not live in areas that are commonly afflicted with dangerous weather elements.

The amount of premium you pay to the insurance company has a direct relationship with the location of your home. Homeowners’ coverage is greatly influenced by weather. The people who reside in areas that are in hurricane zones are truly hurt by this. Wind, blizzards, high temperatures and snow are some of the weather events that affect homeowners insurance rates and cause more claims and also higher costs of coverage.  Homes removed from a water source, along a coast, in a dense forest or in areas prone to weather such as hail storms or flooding may cause higher premium charges or be denied coverage altogether.

Severe weather also increases the possibility of more accidents and damages to your home. Insurance firms understand that the forces of Mother Nature can be hard on home. When it comes to insurance to protect your valuable asset from weather related damage, the insurers are expecting that the occurrence of storms, droughts, floods and other natural disasters will ascend.

Governments are trying hard to settle on how to deal with global warming and other related climate change. World’s largest insurance companies are together in their belief that climate change is a key factor in their risk estimation decisions. No area is totally immune. In the recent times, when the tropical systems travelled up the east coast of US, many homes were destroyed. Now the owners are experiencing the realities and limitations of coverage. Due to high payouts, home insurance premiums have doubled and even tripled in some cases.

States in coastal areas are susceptible to climate havoc. Because of this, most of the top homeowners insurance companies have in fact decided to discard these areas. The areas which are hit hard due to liability to severe weather conditions will have no new policies written by the companies. These restrictions raise premium costs for everyone else.

One thing is sure- atmospheric temperatures are going up and with it are increasing the number of climate related disasters. And you are paying for the insurance companies to hedge their bets. If you live in an area that is affected with severely damaging weather, your home insurance rates are going to be much higher.

What to Do?

It is improbable that you will shift based only on size of your insurance premiums. But when you are seeking for next place to reside, consider all the other issues when selecting your home. Home insurance are most affected by location. Let know your story to agent and ask them to estimate prices for different insurance plans considering the place you are moving to.

 





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