Learn how parts of the homeowners’ insurance pool are impacting the whole.

Read why repetitive weather extremes affect your homeowner’s insurance premium. 

Insurance is a big pool of risks. What was once predictable within an acceptable range in the deep end is literally burning up and blowing through risk models, causing noticeable churn in the shallow end. Homeowner’s insurance premiums are going up everywhere, including Ohio, a state that has been traditionally low risk. Across-the-board increases in U.S. homeowner’s insurance premiums are tied to ongoing wildfires, severe storms, and drought.

What is pooling of risks, and what does it have to do with homeowner’s insurance? For purposes of this blog, consider the pool to be homeowners’ insurance policies written in the U.S. On the most basic level, insurance premiums paid by many cover the losses experienced by some. When the losses experienced by some become increasingly frequent and severe, the pooling principle is jeopardized. Without the pooling mechanism working within a predictable range of acceptability, insurance doesn’t work.
Without insurance, modern societies don’t work.

The quick fix when claims paid are out of balance with premiums collected by insurance companies is to raise premiums, tighten up on underwriting, and/or exit markets that are experiencing repetitive insurable losses. That is what is happening in the U.S. homeowners’ insurance market right now, and the effects are being felt everywhere, including Ohio. Because extreme weather and climate conditions are occurring more broadly, more frequently, and more severely, the impact on the U.S. homeowners’ insurance market is likely to be long-term.

The good news is Ohio is a relatively low risk state for homeowners’ insurance at this time. The bad news is Ohio is part of a much larger pool that is churning at unpredictable levels. The reality is the American dream of homeownership is not sustainable without the protection and peace of mind that comes with homeowner’s insurance.

Your Trusted Choice Independent Insurance Agent at Richey-Barrett Insurance is committed to providing quality, affordable homeowner’s insurance. Call us today to discuss any questions or concerns you may have about your homeowner’s insurance.