The after effects are being felt by business owners and home owners in New Jersey after the tropical storm Irene had struck them. They are likely to feel the heat for many more years to come, state analysts and representatives in the insurance industry. Around $915 million may be spent by the private insurers to cover damages caused by the storm in the state of New Jersey, according to the estimates provided by ISO, which is an insurance risk advisory committee. Apart from these insured losses, another $150 million to cover the freak snowstorm that occurred in the month of October, and another $21.8 million for the severe weather that lasted in March – would be factored into the auto insurance rates in the coming years, state analysts in the auto insurance industry.
All these three events put together managed to sap around $1.1 billion from the private insurance providers, thereby making 2011 one of the costliest years for the underwriters in New Jersey as per ISO’s records. In comparison, the insured losses in New Jersey during the 2010 nor’easter were around $486.7 million, stated ISO. Although, no single event is responsible for the hike in insurance rates, the rising costs of covering catastrophes in general, will certainly have an impact on the auto insurance rates, state industry analysts. Jimmy Bhullar, insurance analyst, JP Morgan Chase states that companies are forced to raise prices because of the high catastrophe losses they incur in some regions.
Even the homeowner premium is likely to go way beyond $1,000 mark this year according to estimates by Robert Hartwig, who is the president & economist, Insurance Information Institute. On an average, US home owners usually paid around $880 for the common home owner’s policy during 2009, as per the data released by the NAIC or National Association of Insurance Commissioners. There has been a continuous rise in insurance costs at the national level, states Hartwig. Even the common policies will cost $1,004 during 2012, despite the fact that the home owner’s policies have historically trailed the national averages.
However, spokespersons for some of the top home insurers in the state have said that it is a bit too early to predict how the previous year’s storms will affect premium rates in New Jersey. The state Department of Banking and Insurance that gave its approval for rate changes in the state, is not expecting any major raise in premiums as a result of last year’s storm.
