Will homeowners insurance quotes rise after these tornadoes?

This has been a bad year with more than 1,000 tornadoes confirmed and an unusually high number of people killed in these opening four months. Indeed, you have to go back to 1953 to find a year with more deaths. April has seen some of the most severe tornadoes ever recorded with thousands of claims for wind damage. The main damage has been restricted to the Plains States and some parts of the south. But there are some immediate words of comfort. The Insurance Departments around the affected states are denying rumors all premium rates will rise as a result. Yes, there may be reviews and it's possible there may be some adjustments, but the rates will not rise because of 2011 tornadoes. One quick word of explanation and then a more general discussion. Even though insurance policies cannot be sold across state lines, insurers do take note of weather patterns across several states. So the fact there has been increased tornado activity in states adjoining yours can be relevant when it comes to setting your rates. Insurer like to hedge against the risk the tornadoes might touch down on your side of the border next time.

When it comes to setting rates, insurers tend to take a long term view. It takes time for all the claims to come in and go through processing. It will be the end of this year before we have accurate figures on the total cost of loss for these first four months. The actuaries will then factor this year's weather pattern and losses into their calculations. We may see the rates rise as direct result in 2014. But, as some of you will no doubt know, the rates are rising quite sharply this year. For example, the Insurance Commissioner for Georgia has just approved an increase of 23% for homeowner premiums. This reflects the changes to the weather pattern over the last three years. The fact there has just been a bad season for tornadoes is a coincidence.

The mid-West and southern states have been experiencing a steady shift in weather patterns with an increasing number of disasters. There have also been a significant increase in the number of fires and crimes affecting property. When you put all this together, it justifies a rate increase. The only person standing between you and big increases is your Insurance Commissioner who, in the majority of states, has a say in what increases are appropriate. Hopefully, you live in a state with a Commissioner motivated to protect consumer rights.

To protect yourself as the next homeowners insurance quotes are due to arrive, check the amount of cover. The cost of building materials and the labor to repair and rebuild have been rising steadily despite the recession. Remember you are not insuring the resale value of your property. The maximum you need is the cost of a complete rebuild from the foundations up. Even though the value of the land has been falling, you may need to increase the amount of the cover. To make any homeowners insurance claims process less hassle, you should also keep a detailed file of your home's contents and value. If possible, you want to replace all you have lost.