Minn. May Lead US In 2013 Natural Disaster Claims
MINNEAPOLIS (WCCO) – Move over, Florida.
New numbers show that Minnesota could finish first when it comes to disaster insurance claims.
Last year, Minnesota generated nearly $800 million in claims, and that’s only through the third quarter.
If you’re wondering why your premium is going through the roof, you can blame what’s falling on your roof.
Hail from storms on Aug. 6 damaged roofs, windows and siding all over the south metro.
Bob Johnson from the Insurance Federation of Minnesota remembers that Tuesday well.
“It was up to, if you remember, softball-size hail. And when that happens, anything it hits is broken. It’s gone,” Johnson said.
For the most part, 2013 was a quiet year for hurricanes and tornadoes. So the estimated $1 billion in claims generated was from Minnesota hail in 2013.
This could make the state number one for weather-related catastrophic losses in the country.
“We actually describe Minnesota maybe [as] the Florida of the Midwest within the insurance industry,” Johnson said.
He says with the concentrated severe weather over Minnesota, the costs of the resulting claims just aren’t sustainable. And it’s forcing insurance companies to rethink their system.
In the future, Johnson thinks homeowners insurance might look more like your car insurance.
“You don’t get new for old, you get paid the loss that you actually suffered, which would be the depreciated value of the house,” he said.
In a world where Mother Nature can’t be stopped, Johnson says something’s got to give.
“They’re troubling, difficult issues,” he said. “We can’t stop the hail storms.”
Johnson adds that new research is being done to help develop both building codes and materials that are more weather resistant.