Surging claims from storms and reinsurance rate hikes are driving up insurance premiums nationwide.
Why are insurance costs for condos and homeowners rising? We had a chat with Bradley Maruyama from Allstate Insurance about this rising concern, and we’ll break it down for you today.
Why are insurance rates going up? It’s a common concern, and Bradley explained that the reasons for these increases have changed over the past few years. Historically, insurance rates were primarily influenced by state or geographical factors. However, a “perfect storm” of natural disasters occurring in places like Maui and Florida, as well as hurricanes in Texas and hailstorms in other regions like Kansas, have led to a surge in claims, prompting insurance companies to adjust their rates.
What areas are affected by the insurance rate increases? The issue is not limited to specific locations. Rate increases are now a national concern, affecting policies universally. For condo owners, the rise in maintenance fees from $400 to $1,200 can often be traced back to increases in the master insurance policy that covers the entire building, not just your individual unit.
“When disasters strike, reinsurance companies must raise their rates to maintain financial stability.”
What are reinsurance companies and their role? Insurance companies such as State Farm, Allstate, and Liberty Mutual rely on reinsurance companies. These companies provide insurance to the insurers themselves, helping them manage risk.
When disasters strike, reinsurance companies face massive payouts. That means they need to raise their rates to stay afloat. As a result, primary insurance companies pass these increased costs onto consumers. It’s not that they’re greedy; they just want to avoid going bankrupt. Bradley pointed out that for every dollar companies like State Farm and Allstate take in, they pay about two dollars in claims. That’s a tough situation to be in.
Understanding the reasons behind these changes can help reduce your anxiety about this issue. If you’re facing rising costs, there are experts available to assist you in finding solutions. Feel free to reach out to Bradley at (808) 591-8016 for guidance on your insurance.
Our team can help you access more resources and trusted experts. If you have any questions or topics you’d like to discuss further, just let us know. Contact us at (808) 212-9188 or info@TeamLally.com. We look forward to talking with you soon!