How Local Weather Patterns Affect Insurance Rates

Insurance companies assess various risks when determining premiums, and local weather patterns can play a significant role in such evaluations. Areas prone to extreme weather events may be considered higher risk. While not all weather-related factors will affect every policyholder, they can influence how insurers price coverage in specific regions.

Types of Weather That May Influence Rates

Several types of weather events can impact insurance premiums, including the following:

• Flooding—Homes located near rivers, lakes or in low-lying areas may be more susceptible to flood damage. Even though standard homeowners insurance doesn’t cover floods, the risk may still affect overall pricing, while also potentially requiring separate flood insurance.
• Snow and hail—Regions that experience frequent hail or snowstorms can lead to higher premiums for auto and property insurance due to the increased likelihood of claims, such as due to slick roads or roof damage.
• Windstorms—Areas where wind-related damage is more likely, including areas susceptible to hurricanes and tornadoes, may require residents, businesses and motorists to pay more for coverage.
• Wildfires—In dry, fire-prone areas, insurers may raise rates or limit coverage options due to the potentially high cost of fire-related claims.

5 Ways to Limit Costs

While you can’t control the weather, you may be able to reduce your premiums or at least limit potential increases. Consider the following strategies:

1. Install protective features in buildings, such as storm shutters, sump pumps, impact-resistant windows and metal roofs.
2. Bundle multiple types of insurance, such as homeowners and personal auto coverage, with the same carrier.
3. Shop for coverage from multiple carriers to find ideal rates on policies that suit your needs.
4. Reconsider small claims that you might be able to manage out of pocket without involving your insurer.
5. Increase your deductible, albeit only if you’re comfortable potentially paying higher out-of-pocket costs when filing a claim.

We’re Here to Help

At Palm Tree Insurance Agency, we can help you assess your insurance needs and find suitable coverage that accounts for weather-related concerns. Contact us today to start a dialogue.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.