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Insurance Premiums Will Be Going Up

All the property losses from natural disasters need to be covered.

The big picture is this:

  • Insurance rates will be going up for everyone
  • Some insurance companies will stop offering new policies for areas of high risk
  • Some insurance companies will withdraw from entire states
  • Insurance companies may make property inspections before they offer a policy
  • Governments that regulate the cost of insurance will have significant pressures from insurance companies and their constituents to reduce the cost of insurance
  • The cost of insurance may become prohibitively expensive
  • Development along the coasts and in wildland fire areas will slow
  • People won’t be able to get insurance to back up their need to have it as required by the lending institutions
  • Insurance companies’ rates for their own re-insurance will be going way up. Those costs have to be passed on to the people they insure.

I think all of the above is a given.

What remains to be seen is how states and the federal government will react to the looming insurance crisis. Will they step in and subsidize risky behaviors with their own state or federal all-hazard insurance? They will get pressured by developers, builders, suppliers and trade unions to do something to make insurance more available and affordable.
Eric Holdeman is a contributing writer for Emergency Management magazine and is the former director of the King County, Wash., Office of Emergency Management.