Homeowners Insurance Rate Increases Impact The Atlantic Coast in 2006

2006-05-28

With the massive damage that the Gulf Coast region suffered in 2005, homeowners shouldn't be surprised to see home insurance companies raise their rates all along the Atlantic Coast all the way to New York state.

With forecasts for 2006 to be an extremely active year for hurricanes with potential 4-6 major hurricanes, 3 of which could impact the US, many insurers are re-evaluating their risk exposure in this area.

According to Kiplingers Personal Finance, insurers paid more than $50 billion in claims for hurricanes Katrina, Rita and Wilma in 2005, hammering the previous record of $27.3 billion in 2004. With the streak of storms predicted to continue, homeowners in the affected areas shouldn't be surprised to see their rates surge by 20% to 40% or more this year, predicts Robert Hartwig, chief economist for the Insurance Information Institute.

"We're very concerned that we could see a major hurricane in the Northeast sooner rather than later," says Ken Reeves, director of forecast operations at AccuWeather.com. "The storm could take a path like the 'Long Island Express' of 1938, which grazed North Carolina, went up the Eastern seaboard and caused tremendous damage on Long Island and in New England."

Georgia, South Carolina and other states along the Atlantic coast have also had several near misses in the time since Hurricane Hugo in 1989. Many feel it is only a matter of time before one of these states are hit again. Home insurance companies are preparing by taking another look at their risk exposure and what should be the cost to insure the coastline of these states.

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