Gephardt: The Impact Of Nationwide Natural Disasters On Our Insurance Premiums In Utah

SALT LAKE CITY, Utah – Fires in the West, flooding in the South and hurricane-force windstorms here at home in Utah. When you look at all these natural disasters hitting the country right now, you might be tempted to step back and say, “Well, at least they have insurance.”

But, the money to cover tens-of-billions of dollars’ worth in damages the insurance will pay out this year has come from us, every time we pay a premium. And while the spate of catastrophic weather events seem like a unique-to-2020 horror show, natural disasters have been on the climb for several years and causing premiums to go up – drastically.

In fact, the insurance industry has had to pay out so much more, that average home insurance rates across the country have increased by a whopping 33% just since 2016, according to research from Insure.com.

“It was the largest three-year history for insurance companies in terms of losses in history,” explained Michelle Megna – Insure.com’s editorial director.

So, how does Utah fare in all of this?

“I believe it’s the fourth cheapest in the nation in terms of home insurance on average,” Megna said. The three states with cheaper average premiums are Vermont, California and Hawaii.

But with the big national insurance companies hemorrhaging money as they deal with all the big natural disasters, are we going to see our insurance premiums in Utah go up because the insurers are taking big hits in other states?

“The short answer is not so much,” Megna responded. “The fact that there’s no coastline is helping to keep rates low here. The fact that you’re not in ‘tornado alley’, you’re not getting a ton of hurricanes. So, the lack of severe weather events certainly helps.”

The four states where homeowners pay the most for homeowners insurance on average are Oklahoma, Kansas, Arkansas and Florida – all areas prone to tornados or hurricanes.