Home and Auto Insurance Rates and Climate


Home and Auto Insurance / WeatherChicago began 2019 with record-setting cold, and July brought days with a heat index over 100 degrees. In 2020 we have seen Death Valley hitting 130 degrees, a large “firenado” in California, an increase in the number of tropical storms, record loss of ice sheets, and rising sea levels. All across the world we are witnessing an increase in extreme weather, and insurance companies recognize that an increase in extreme temperatures is linked to an increase in the number, and severity of claims. The math is simple- The more extreme the weather, the higher the Home and Auto Insurance Rates.

January’s record cold resulted in insurance companies being inundated by claims of water damage resulting from frozen pipes. Water leaking from pipes can cause extensive damage. When wind-chill temperatures reach such dangerously low levels, people will dress with hoods, hats, scarves and now masks; which will limit their ability to see cars, In an attempt to avoid the cold, pedestrians will tend to take more shortcuts which carries obvious dangers. Winter also brings Icy conditions, increasing the timing times, which also increases the number of auto accidents.

Heat waves bring their own problems that can result in a larger than normal number of insurance claims. A study conducted by the National Institute of Environmental Health Sciences, analyzed over 118,000 collisions and found that heat waves cause a 2.9 times greater likelihood of an accident than under average conditions. A warming planet increases both the frequency, as well as the severity of tropical storms. While insurance prices are determined state by state, it is impossible for insurance to ignore the claim rate they are experiencing nationally. So despite the fact that Chicago does not live in fear of hurricanes, costly storms elsewhere will often result in insurance carriers spreading those losses across all policy holders.

We have seen many companies issue notices of Home and Auto Insurance rate increases. Just today I received an email, from one of the many companies with whom we are licensed, stating:
After careful evaluation, we found it necessary to implement a statewide average rate increase of 19.5%
While weather reflects very short-term changes; climate reflects patterns over time; so when we recognize that the hottest years were 2016, 2019, 2015, 2017, 2018, 2014, 2010, 2013, 2005 and 1998 we are living through more than just a few hotter years.

One of the advantages of buying your insurance through Urban is that we will compare rates with up to twenty different companies, in order to find you the lowest price, for the right insurance coverage to meet your needs. We are constantly searching for new markets to save our clients money.
Chicago’s weather will almost certainly throw more surprises our way, but at Urban we have 59 years experience navigating the ever-changing insurance landscape. Call us today to see how we can save you hard-earned money.


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