Even Missouri residents who reside far and away from last year’s deadly tornadoes are now writing bigger checks for homeowners insurance.
The state Department of Insurance reports that premiums increased 5 percent between July 2011 and early 2012. This figure is based on analysis of rates charged by insurers covering 80 percent of homes. In the past, insurers were more concerned about hurricanes on the coast. Tornadoes have been getting more attention in the past few years as they cause even more damage. Of course, the worst of 2011′s tornadoes was the massive twister that hit Joplin. The death toll from Joplin’s tornado was 161 and it left much of the city in ruins.
Additionally, insurance ratings company A.M. Best reports that earnings for property and casualty insurers dropped about 40 percent last year to $11.7 billion. “Catastrophe-related losses wreaked havoc” and contributed to this major drop in earnings.
Per Steve Weisbart, chief economist for the Insurance Information Institute: “Insurers are starting to say, `maybe this is the new normal. They’re building into rates a little more margin for catastrophic loss.”
Regulators in Missouri are also observing some insurers move away from coverage that replaces damaged property with new property. For instance, a homeowner whose roof is blown off might get a check for the value of an old roof, even though it costs more to replace it with a new roof.
“It’s really up to the consumer to do their own homework,” says Department of Insurance spokesman David Owen.
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