Hurricanes and Homeowner's Insurance: What's the Connection?

Hurricane Katrina was one of the most devastating natural disasters ever to hit U.S. soil, and its effects still reverberate throughout the economy nationwide. But those affected also struggle on a personal level, as they work to rebuild their lives, businesses and homes in the aftermath.

For homeowners, natural disasters like hurricanes, earthquakes and floods spell trouble in more ways than one. Not only can they damage and devastate homes; tragedies like these endanger lives and lead to much higher home insurance rates too.

Finding Affordable Home Insurance

For those living outside potential crisis areas, hurricanes like Katrina may have absolutely no effect on home insurance rates. However, as natural catastrophes continue on a more frequent basis, those in high risk areas sometimes struggle in their search for affordable home insurance as the market continues to escalate.

With all the talk about global warming and the increased frequency of disaster that go hand in hand, home insurance companies are bracing themselves to handle much higher claims levels in the years to come.

But insurers can't just raise rates to recoup their losses; individual state departments of insurance must first approve rate hikes state by state. In addition, financial losses in one state can't be compensated for in another. So while higher premiums may seem arbitrary following events like hurricanes, the opposite is actually true.

Home Insurance & Floods

In the wake of disaster, homeowners often turn to their insurance companies to try and recover loss caused by conditions like flooding not covered under normal home insurance policies. As an example, some Katrina victims sued their home insurance companies for property damage and loss due to flooding, hoping to get enough money to rebuild their homes and start new lives.

But because flood insurance must be purchased separately through the Federal Emergency Management Agency (FEMA) or a pool of participating insurers—and many homeowners don't have this specialized coverage—federal courts dismissed Katrina flood cases where no flood insurance was involved. Otherwise home insurance companies would have had to raise rates nationwide to cover payouts and loss.

Protecting What's Valuable

Hurricanes like Katrina provide a jolting wake-up call for many, and a brutal reminder of the priceless nature of our homes, lives and families.

But even if they don't affect you directly, making sure your home and family are protected from natural disaster with the best home or flood insurance available means you never have to worry about losing your home; instead, your insurance policy has you covered.

For free quotes and affordable home insurance—no matter where you live—shop your rates with GIQ today. With competitive quotes and affordable rates, we'll help you protect what's truly valuable!