Torrential rain, record-shattering winds, storm surges, massive wide-spread flooding have crippled the South in recent weeks due to two major natural disasters. Joel Meyers, President of AccuWeather, announced Sunday the estimated the damage sustained from Hurricanes Harvey and Irma will total over $290 Billion. As a result, insurance companies are scrambling to pick up the pieces and respond to each policy claim. For policyholders removed from the natural disasters, you may be surprised to learn insurance premium increases could potentially trickle all the way into your next invoice.

Insurance companies consistently calculate their risk analysis in every market. It is no doubt more expensive for consumers to be insured in high risk states such as Florida, Texas, and California, because the risk is greater – and costlier – to those within areas most common for major natural disasters. Let’s say a major hurricane is estimated to occur every ten years.  In the event of a catastrophe, it is expected that losses will exceed the premiums collected that year. Consider the flooding, wind damage, debris, even mold damage; and the millions of insurance claims to homes, autos, businesses, recreational vehicles and boats, crops. The cost needs to be absorbed from somewhere. This is why insurance providers factor substantial loss from these disasters into premiums nationally, spread throughout the remaining nine years. Think of it this way: together, we all help pay to rebuild.

Now you’re wondering – How will Hurricanes Harvey and Irma affect me?

Admittedly, the full implications of Hurricanes Harvey and Irma are complicated to predict. It will take months for insurance adjusters to survey the claims incurred and years to completely rebuild. Remember, insurance companies plan for these major disasters and have funds to absorb most of the cost. In addition, the significant competition between providers has companies struggling to increase premiums with a drastic leap. Because of this, for our local policy holders in Duluth and surrounding areas – your premium will (most likely) be minimally effected, if any, even as the damage estimate exceeds any natural disaster our nation has yet seen.

The big ‘but’…

As the South continues to rebuild from Hurricanes Harvey and Irma, increased insurance rates will be a consequence of the damage will be absorbed largely among the policy holders in those states immediately affected. Similarly, should an event producing expensive claims happen in our neighborhood you would likely see an increase in your policy. The summer of 2017 held three massive hail storms in the cities, plus we all remember Duluth’s destructive wind storm from last summer. You may not see direct increases from Harvey and Irma, but insurance rates will most likely increase because of these expensive storms in our own home state. Take note – these rate increases will be realized on your next annual renewal.

Full transparency is important to Hanlon and Associates. If you have questions, please give us a call. We are happy to walk you through your policy and address any concerns.



Informational statements regarding insurance coverage are for general description purposes only. These statements do not amend, modify or supplement any insurance policy. Consult the actual policy or your agent for details regarding terms, conditions, coverage, exclusions, products, services and programs which may be available to you. Your eligibility for particular products and services is subject to the final determination of underwriting qualifications and acceptance by the insurance underwriting company providing such products or services.

This website does not make any representations that coverage does or does not exist for any particular claim or loss, or type of claim or loss, under any policy. Whether coverage exists or does not exist for any particular claim or loss under any policy depends on the facts and circumstances involved in the claim or loss and all applicable policy wording.