Will hurricanes and wildfires cause insurance prices to rise nationwide?

The property insurance level has been have been growing in the US for yearsAnd a number of factors contribute to the problem, including inflation, building high-risk expansion and recording natural disasters losses.

Destruction: Current fires in California And last year’s storms in the southeasterly fear that huge percussion companies will be processed in those countries, at least partially will be processed on national carriers who do not affect other countries.

An air view of the sun, which is on the other side of the houses, burned on Etadena, January 21, 2025, in the Altadyena city of California. Many fires burned by Intensive Santa Ana Winds burned in Los Angeles, leaving at least 27 dead w (Mario Tama / Getty Images / Getty Images)

One source supporting this concern comes with a 2022 Examine Harvard Business School: “Settlement and Cross Subsidies” entitled “Price Subsidies”, which signed “households in low communication [risk] The states are disproportionate to the risks of households in high contact states. “

Is Insurance industry says it is not true.

Drop drops on a state farm after fires

Robert Gordon, Robert Gordon, a research of the American Property Victim Insurance Association, says he does not dispute some of the study data, but he will find its conclusion.

In an interview, he explained that insurance was regulated, and each state prohibits interest rates that are discriminatory or unnecessary. Thus, the regulators do not allow companies to arbitrarily charge excess pace.

Households check the damage of his house, Helene Helen at the Florida horse beach, 2024. On September 28. (Chandan Khanna / AFP Via Getty Images / Getty Images)

Beyond such regulations, insurance is one of the most competitive industries, he said. There are thousands of insurance companies, in which hundreds of people are in each state, and many of them are not national companies, but state-only companies or regional insurers.

West Woast will have “long-term” insurance challenges due to fire destruction

“So if the national insurer loses money in California, it does not mean that it can increase its list of Iowa or Vermont or any other country, as it competes with all these carriers, so they do not raise their pace with California. because of losses, “Gordon said Fox Business:A number

He compared the situation with the gas stations. If, if, as Chevron, there was losses in California, the company did not increase prices by 50% in Oklahoma, as they would go to another gas station in the state.

Smoke reptiles are seen as a brush fire burns in California Pacific Palisades on January 7, 2025. (David Swanson / AFP Via Getty Images / Getty Images)

In any time, insurance rates are growing significantly, and companies see the growth of insurers who make purchases and change companies. That’s what the industry sees now.

Before the authors of Harvard’s study and the insurance industry disagree on the conclusion of the study, they agree to many points, including What is happening in California?What has been sent to insurers who have run away in recent years, as regulators will not allow carriers to increase the rates to reach the market.

Which insurance companies have the most impact in California?

“What we see in many states, the pressure of interest rates, is that you have any explosion residual markets, in fact government insurance plans,” Gordon said. “And these state insurance plans subsidize the rates, in particular, the highest risk properties that are ironically eliminating very important signals of the environment. Do not build in forest areas and you do, make sure there is appropriate risk mitigation. [like] Better building codes, etc. “

He added that when the states are pressuring insurance prices and subsidize the structure of catastrophic distribution, such programs in the market are lowering interest rates in the market. But all that really does is mask those signals.

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Harvard’s authors, Sangmy Oh, Ishita-Maria and Anna-Maria, and Maria, have reported that “when interest rates do not reflect the risks.”

They added. “[O]Ver long-term, exchange rate settings can be less prepared to deal with large losses and insurers, can answer markets at all or reducing the important properties of products.