NEW YORK, Dec. 13 (Xinhua) -- Higher home-insurance rates are here to stay, while homeowners in many areas of the United States face an increasing risk of nonrenewals, reduced coverage and expensive policy conditions, from paying for a new roof to cutting down trees, reported The Wall Street Journal (WSJ) on Friday.
"Behind the crisis: climate change is making the weather worse, scientists and insurers say," noted the report. But that is only part of the story. A bigger driver of the record underwriting losses roiling home-insurance markets in many U.S. states: the propensity to build in disaster-prone areas.
Insured losses from U.S. storms have grown 8 percent a year for more than a decade, according to reinsurer Swiss Re, faster than economic growth. Climate change accounted for around an eighth of that increase. Inflation made up more than a third of the annual rise and development in climate-prone areas much of the rest.
Hail, in particular, is punching a hole in insurers' profits. It drives 50 percent to 80 percent of insured losses from thunderstorms, which are this year expected to hit 51 billion U.S. dollars globally -- more than a third of all natural-catastrophe losses, a Swiss Re report this month said.
"Even as rates rise, homeowners in storm-prone regions are finding their policies cover less," noted the report. Widespread changes include limiting new-roof payments to current, rather than replacement, value and scaling back payments based on roof age. Insurers are also ramping up their use of satellite images to cherry-pick which roofs --and homes -- they are prepared to underwrite, it added.
