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insurance premiums paid within the state since 1989 and nearly nine times the estimated $625 million in homeowners premiums paid last year. Think about those numbers. Homeowners insurance in Mississippi was generally unprofitable even before Katrina struck. In the 20 year period from 1985 through
2004, homeowners insurers sustained a net loss of $258 million, even after accounting for investment income earned.
Overall insured catastrophe losses in 2005 exceeded $55 billion, a new record. The majority of those losses occurred in Louisiana and Mississippi. Hurricanes Katrina, Rita,
Wilma and Dennis resulted in a total of approximately three million claims.
"After mega-catastrophes such as Hurricane Katrina, insurers and reinsurers will reassess the risk associated with writing homeowners insurance in Mississippi," said Dr. Robert
Hartwig, chief economist of the I.I.I. "This reassessment will be a multi-year process."
"Clearly risk is heightened and premiums must rise to more accurately reflect that risk," said Hartwig. "Some insurers may also limit the number of homes they are willing to
insure in coastal areas until the reassessment process is complete. This would increase the number of home owners who will need to seek coverage through Mississippi's beach and windstorm plan, the state's
insurer of last resort for coastally exposed properties."
A home is a financial asset and more: it's a place to live and raise children; it's a plan for the future; it's an investment in your community. That's why the U.S. Department of
Housing and Urban Development want all Americans to have an opportunity to enjoy the benefits of owning a home. And are especially proud of their work to help first-time homebuyers.
Hartwig explained that homeowners insurance rates in Mississippi are based on individual insurer experience in the state. "Profits from other types of insurance in other states
- auto insurance in Illinois for example - cannot be used to subsidize hurricane-related losses in Mississippi," he said.
Hartwig pointed out several factors that homeowners insurance companies will be considering in their reassessment of
risk in Mississippi. They include:
- Predictions by meteorologists that hurricanes will be more frequent and more intense for the next 15 to 20 years.
- Uncertainty surrounding the enactment of a new statewide building code, its enforcement and where homeowners will be allowed to be rebuild.
- Lawsuits, such as those filed by Mississippi Attorney General Jim Hood and others that seek payments for flood damage under homeowners policies which contain long-standing and
explicit exclusions for such losses also present a problem. Insurers are concerned that they could be held liable for billions of dollars in losses for which they have collected no premiums and have no
reserves.
The price you pay for your homeowners insurance can vary by hundreds of dollars, depending on the insurance company you buy your policy from. Here are some things to consider
when buying homeowners insurance. Free Quotes Homeowners Insurance
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