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The role of inflation in rising premiums
For some local homeowners, insurance premiums are on the rise. But a big factor is not climate at all. It’s inflation. It now costs a lot more to repair storm or fire damage.
The Insurance Information Institute said those costs rose about 55% percent since the start of the pandemic. As a result, homeowners insurance has risen nationwide.
Some homeowners have even found themselves dropped by their insurance carriers.
Jennifer Greenfield lives in Wynnewood and said her insurer made a surprise visit, told them they had some moss on their roof, and then canceled their policy.
“[We were] shocked,” said Greenfield. “To not have homeowners insurance especially in an area where we desperately need it. Trees are the No. 1 concern. A tree or branch could fall on our home and cause millions of dollars of damage. It was just really upsetting.”
Local insurance brokers say this is happening more and more — they point to inflation and the increased replacement costs should a storm hit.
Another rising cost for insurers is their own insurance, referred to as re-insurance. The re-insurers have raised their rates recently, which means insurers will pass that on to homeowners.
“It was almost overnight that they realized they weren’t charging enough,” said Don Blizzard, an insurance broker. “They’re going out and re-inspecting properties, every little thing is getting nitpicked now.”
Blizzard said he used to get one call a month from a homeowner asking why their rates jumped or to explain why they were dropped.
“Now, I get six to seven of those calls a day,” he said.
Pennsylvania’s Insurance Commissioner Michael Humphreys said the state does not have the same regulations as California, and so insurers can incorporate current and future risk modeling.
“Companies are becoming more sophisticated in the risk model space,” Humphreys said. “So you have these catastrophe modelers help insurers try to assess the risk in their portfolio.”
Still, he said that he hasn’t seen extreme weather be a “substantial contributor to a rate increase.” Instead, he said inflation and the increases in re-insurance have caused the rate hikes.
Humphreys said Pennsylvania’s Insurance Department has begun to work with the Pennsylvania Emergency Management Agency to draw attention to the lack of flood insurance, and encourage more homeowners to purchase it on the private market.
“Anecdotally, it does feel like these storms are becoming more and more severe,” he said. “And we’re going out to communities more often, particularly around [flooding] events.”
First Street estimates 15 million properties across the country face flood risks without flood insurance.
When homeowners lose coverage for any reason, there is a fallback. Every state runs what is called a FAIR plan — or Fair Access to Insurance Requirements. It’s designed as a fail safe, but in places like Florida, that plan, Citizens Property Insurance, now covers the majority of homeowners — about 1.3 million properties. It can be a lot more expensive, and provide less coverage.
Humphreys said the comparatively few homeowners signing up locally indicates the regional insurance market is solid. In Pennsylvania, the state’s FAIR plan covers about 9,000 properties. New Jersey has about 8,000 enrolled, while Delaware covers only about 1,000.
Cleaning up after the storm
Back in Chadds Ford, Delaware County, Cat Tucker says she feels lucky none of those giant trees landed on her house.
“This was a very shaded yard,” said Tucker. “But we can grow grass now. So we re looking at the positive. I told my son, ‘We ll find some trees, we ll plant some fun stuff.’”
 Cat and Robert Tucker with their sons Miles and Austin on their porch in Chadds Ford Township in August, 2023, after a heavy storm with strong straight winds destroyed trees on their property. (Kimberly Paynter/WHYY)
The county’s emergency management team has begun to track these storms and their costs. Anecdotally, Delaware County Office of Emergency Management’s Ed Kline said he has seen the impact of climate on the frequency and severity of storms, and the resulting property damage.
“It’s very easy to say, ‘Oh, that only happens in Kansas or Florida.’ But it now happens here regularly,” said Kline. “And it’s not necessarily the national news storm, it’s the little storm. We need to see what we can do locally to prepare and mitigate. All those blue sky operations are so important to the resiliency of the gray sky days.”
Delaware County officials say that the quickly passing storm in August damaged 34 homes. Two were completely destroyed. Tree removal alone in Tucker’s one little cul-de-sac cost residents more than $100,000 dollars out of pocket.
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