Brace yourselves, folks! 🌪️ Hurricane Milton, a Category 5 monster, is barreling towards Florida, and it's not just the winds we should be worried about.
As residents pack up essentials and secure their homes, a looming question hangs in the air: How many of us are actually protected against the aftermath? Many are looking back at the devastating impact of Hurricane Helene, which slammed into western North Carolina and other southeastern states on September 26th. The heartbreaking reality? Most property owners hit by Helene weren't covered by private insurance or the National Flood Insurance Program (NFIP).
Imagine rebuilding your life from scratch without any financial safety net. Scary, right?
CoreLogic, a top data analytics firm, estimates that Helene caused between $30.5 billion and $47.5 billion in damages. Of that, uninsured flood losses are pegged between $20 billion and $30 billion. That's a staggering amount left on the shoulders of everyday people.
Here's the kicker: Standard homeowners' insurance policies usually don't cover flood damage. To get that coverage, you need a separate policy or sign up with the NFIP. But as of May 2023, a whopping 92% of properties at risk of flooding in the U.S. weren't covered by the NFIP, according to a Congressional Budget Office study.
With climate change amping up the frequency and intensity of natural disasters—hello, record-breaking temperatures in July! 🔥—this insurance gap is only widening. Since 1980, weather and climate disasters have racked up about $2.6 trillion in losses.
To make matters worse, insurance companies are hiking up premiums because of the rising demand. Charles Nyce, a professor of risk management and insurance at Florida State University’s College of Business, explained to Salon, \"Insurance regulation ensures that insurers remain solvent to pay for claims. This means they need more premiums and capital to ensure they have enough money to pay future losses.\"
Translation: We're paying more, and it's hitting those with less cash the hardest. \"Higher premiums will disproportionately impact less wealthy individuals, who are least able to afford the additional costs,\" Nyce warns.
So, as Hurricane Milton approaches, it's not just about stocking up on supplies and boarding up windows. It's also a wake-up call about the storm brewing in our insurance system. Stay safe out there, and let's hope for sunnier days ahead. ☀️
Reference(s):
Multiple hurricanes raise grave concerns about U.S. insurance gap
cgtn.com
