Many insurance companies have recently raised their rates on homeowners policies. Why is this happening? Let’s look at one reason – above average insured losses from natural disasters.
The 10-year average for natural catastrophe insured losses is $66.5 billion. The years 2012 through 2016 were well below the average and, entering 2017, the insurance industry was flush with capital. 2017 was a terrible year with insured losses over $140 billion; however the industry was able to withstand the losses with no rate increases.
Although 2019 was a below average year, both 2018 and 2020 were above average and the insurance industry basically has run out of reserves. Thus, rates have been increased and your premium is higher.
These are global numbers and the insurance industry is certainly a global industry. What happens outside the USA does have an effect on the premium on your property policy.