Insurance rates for home and business owners are increasing due to recent storms. Sometimes, their insurance policies are not being renewed.
An insurance expert says that it’s a problem that can be solved using basic math. Insurance companies are paying out more money for weather disasters than they are collecting from premiums. And that is not good for business.
“In 2020, we experienced the most severe weather event in Iowa, resulting in a loss of nearly $300 million,” stated Jeff Menary.
Menary is the Chief Executive Officer of Grinnell Mutual Insurance. He explains that insurance companies are facing significant challenges due to bad weather and inflation.
“The main thing that affects your profits the most in terms of expenses is payment claims.” However, at the moment, there is not enough money being received to cover these claims. “Companies that are still providing or renewing business in Iowa have increased their rates significantly,” said Menary.
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“It’s very frustrating,” says Clinton Webster, a business owner in Newton. Webster’s insurance company stopped covering him after the derecho caused damage to his Thunderdome event space in Newton. His insurance payments doubled because of a new policy. He gets anxious every time a new storm is approaching.
“It’s a balancing act to decide what risks we are willing to take and what we are willing to spend,” Webster said.
Many big insurance companies are leaving Iowa and other states because they are losing money. Customers are receiving the bad news through mail.
If you experience bad weather today, you might be let go. Wishing you the best of luck. “And perhaps finding another company that is willing to insure you despite a weather-related claim,” says insurance seller Brian Neal. Neal is assisting his customers in locating new insurance companies.
“That is a very difficult situation and it’s affecting Iowa more than any other state because we have experienced a lot of losses,” explained Robert Conroy.
Conroy is in charge of the Iowa Fair Plan Association and provides guidance to customers. “But make sure you are well-informed and don’t delay when you receive the letter. Take action promptly and complete the task,” he said.
What is Conroy’s best advice? Make sure to plan in advance with your insurance agent. Iowa has hundreds of insurance companies. You have a high chance of finding coverage.
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