In May, State Farm announced they will no longer provide home insurance to new California customers due to wildfire risks and an increase in construction costs. Then in July, Farmers Insurance announced that they will stop offering policies in Florida due to the rising costs of covering properties in a hurricane-prone state.
This underscores a trend caused by the rise in claims due to natural catastrophes. As a result of escalating concerns regarding risks posed by climate change, insurers and lenders are developing a heightened sensitivity to the potential ramifications posed by such events. The withdrawal of larger insurance companies from certain markets has left property owners in a scramble to secure coverage since property insurance is required by lenders. But despite the exorbitant premiums (Florida’s commercial property rates may increase more than 40 percent in 2023), there is no assurance that insurance providers will deliver payouts in the aftermath of a natural disaster.
In this GlobeSt. article, published on August 21, 2023, Tony Liou, founder and President of Partner Energy, a division of Partner Engineering and Science, discusses a concerning trend centered around property insurance and a rise in claims due to natural catastrophes.