Last year’s hurricanes, fires break insurance industry record
The natural disasters that ravaged the South and West last year are officially the worst in the history of modern American insurance.
Four hurricanes – including the first storm that measured Category 3 or higher since 2005 – and rampant California wildfires led the nation’s property and casualty insurance industry to its worst year of losses on record.
The year’s total insured losses amounted to $52.9 billion, which more than doubled the 2016 total and far exceeded the previous record of $41.9 billion set in 2011 – a year marked by the Tohoku earthquake and subsequent tsunami in Japan, an active tornado season in the United States and flooding in Thailand, according to an AM Best report.
The biggest storms of 2017 included Category 4 Hurricane Harvey, which hit Texas and Louisiana in late August; Category 4 Hurricane Irma, which hit Florida in early September; Category 4 Hurricane Maria, which struck North Carolina two weeks later; and Category 1 Hurricane Nate, which hit the Gulf Coast from Louisiana to Florida in October.
Losses also piled up in California, where five of the year’s many wildfires claimed spots on the all-time top 20 list.
Fortunately for policyholders, the significant disaster losses were partially offset by insurance companies’ investments in the stock market. AM Best reported industrywide capital gains of $39.4 billion and dividends of $4.4 billion. Nevertheless, the damage could push home insurance premiums up as much as 20% this year in repsonse.
If you receive notice of an upcoming premium increase from your homeowners insurance carrier, compare rates and coverage options in our guide to choosing homeowners insurance. Now may also be a good time to evaluate whether or not your insurance provides the coverage you want or need. Pay particular attention to what’s covered and what isn’t; while fire damage is included in most policies, flood insurance is not standard and is often offered as an add-on.