Severe weather and wildfires have home insurance rates climbing in states where rates had been cheaper

Hailstorms in Iowa have caused home insurance
rates to spike. (Photo by Champers Fu, Unsplash)

After a decade of severe weather and wildfires across multiple regions of the U.S., many home insurance companies have responded by increasing their rates to reflect emerging risks. 

Home insurance rate increases can be particularly onerous for rural residents who already pay more because of their distance from emergency and fire services.

In the past, traditional home insurance policies were more expensive in coastal states, where hurricanes could devastate hundreds of homes in a single season. Lower rates were reserved for inland states considered less likely to be hit by Mother Nature's seasonal wrath.

But that old playbook has been swept aside, report Carl Churchill, Jaclyn Jeffrey-Wilensky, Jean Eaglesham and Jason French of The Wall Street Journal. "Now, hailstorms, wildfires and wind damage are hammering places once thought to be shielded from the worst rate hikes."

In Iowa, where hailstorms have become more common, home-insurance rates have "increased 91% since 2021: In Florida, despite the hurricane risk, the increase is 35%," the Journal reports.

Before buying a new home, it can be worthwhile to see how much it will cost to insure. "Home-insurance premiums can vary dramatically, depending on where you live: Crossing a county line can more than double the cost," the Journal reports.

In high-risk areas of the country, finding an insurance company willing to issue coverage is difficult, and policy prices have skyrocketed. A resident in Braue of Orinda, Calif., said his "annual premium had shot up to $16,496, more than nine times his premium of less than two years ago," the Journal reports. "The reason? Wildfires, which are scorching homeowners’ chances of cheaper insurance in many states."

How states regulate home insurance rates also impacts home policy pricing. According to the article, "North Carolina is one of 11 states that allow regulators to veto requested home-insurance rate increases. . . .Cross over from Cherokee County, North Carolina, to Monroe County, Tennessee, and the typical rate jumps more than 50%." Despite similar risk assessments, the state with regulatory controls has lower rates.

A Medicare pilot program will use artificial intelligence for prior authorizations. Doctors and lawmakers are alarmed.

Some prior authorization requests are already decided
by artificial intelligence. (Adobe Stock photo) 

A Medicare pilot program that allows private companies to use artificial intelligence to approve or deny medical care requested by their members has some doctors and lawmakers worried. Companies included in the pilot would get paid, "based on how much money they save Medicare by denying approvals," reports Anna Claire Vollers of Stateline.

The pilot, known as the Wasteful and Inappropriate Services Reduction (WISeR) Model, will launch after Jan. 1 in six states: Arizona, New Jersey, Ohio, Oklahoma, Texas and Washington. WISeR is more likely to impact health care treatments for rural Americans in those states because rural populations often skew older and sicker than their suburban and urban counterparts.

At its core, the WISeR model effectively introduces a prior authorization process into traditional Medicare. Prior authorization is already unpopular with many patients and doctors because it requires members or medical providers to request an insurance company's approval for certain treatments or medications before proceeding.

While some Medicare Advantage and private insurance companies have already deployed AI into some of their prior authorization processes, its use has "attracted intense criticism, legislative action by state and federal lawmakers, federal investigations and class-action lawsuits," Vollers explains. "It’s been linked to bad health outcomes. Dozens of states have passed legislation in recent years to regulate the practice."

The new program has "alarmed many physicians and advocates in the affected states," Vollers reports. In practice, the prior authorization process can create obstacles to care by requiring physicians to spend hours fighting with an insurance company to justify the care they believe their patient needs. At times, medical providers may avoid treatments that would be best because an insurance company is likely to deny them, at least initially.

Last month, congressional representatives from several states "introduced a bill to repeal the WISeR model. It’s currently in committee," Vollers reports. The program is scheduled to run from 2026 to 2031.

Extreme weather and extremely high insurance rates may have to go together as insurers try to manage losses

At least 26 deadly tornadoes hit the U.S. in 2023.
(NOAA artist rendering, Unsplash)

After catastrophic losses from extreme weather and wildfires, insurance companies asked for significant increases in auto and home insurance rates, but state regulators told them no. Insurers like Allstate went to the "nuclear option," reports Jean Eaglesham of The Wall Street Journal. The company threatened to "stop renewing auto insurance for customers in three states that hadn't given in to its demands, which would have left those policyholders scrambling for coverage. . . . The states blinked. New Jersey approved auto rate increases for Allstate averaging 17%, and New York, a 15% hike."

Ten years ago, getting auto and home insurance was generally affordable. That's no longer the case for many Americans. Eaglesham writes, "Homeowners and drivers are facing sharply rising premiums, less coverage and fewer, if any, choices of insurer. In some places, the only options are bare-bones coverage or none at all. That can make homes worth less and harder to sell, and cars less affordable."

With insurers coming off of some of their worst years on record, along with the unpredictable costs of nature's calamities, insurance expenses are not likely to come down. Eaglesham reports, "The past decade of global natural catastrophes has been the costliest ever. Warmer temperatures have made storms worse and contributed to droughts that have elevated wildfire risk."

Barry Gilway, a 52-year veteran of the industry who retired in 2023 as head of Florida's Citizens Property Insurance, a state-created insurer of last resort that sells plans to people who can't get coverage elsewhere, told Eaglesham, "I have never seen the overall market this bad."

For consumers, shopping around, if possible, offers one panacea. "Nancy Piel, who lives Lake Forest, Ill., a Chicago suburb, contacted three agents last year after Nationwide increased the cost of insuring her two homes and 2011 minivan to $18,000," Eaglesham reports. "According to one agent, Chubb quoted even more: $29,000. She ended up insuring with Cincinnati Insurance for $10,500. The coverages were all very similar, she said."

States that have been deserted "by many big insurers are trying to tempt companies back by making it harder for policyholders to sue them," Eaglesham explains. "Despite some concessions from regulators, insurers are bracing for a tough future. Allstate Chief Executive Tom Wilson said that everywhere in the country is at some risk from increasingly severe weather. 'There is no place that's safe,' he said, 'and no place that's not going to be impacted.'"

Next deadline to change your Medicare plan is March 31; Rural Health News Service writer offers advice

If you're on Medicare, you can change some of your health-insurance arrangements this month, Trudy Lieberman reports for the Rural Health News Service.

Trudy Lieberman

"It’s also a good time for those who will soon be turning 65 to begin thinking of their options and learn what the rules are once they make their selections," writes Lieberman, a nationally recognized health-care journalist.

"Until the end of March, if you have a Medicare Advantage plan, you are allowed to switch to another Medicare Advantage plan," she reports. Or you can drop an Advantage plan, return to traditional Medicare and buy a separate drug benefit under Medicare Part D.

"What you cannot do, if you have traditional Medicare along with a stand-alone drug plan, is switch to a new drug benefit that might let you save more money on your prescriptions," Lieberman writes. "You can do that only during the open enrollment period in the fall."

Lieberman notes that if you switch to traditional Medicare, "You might have trouble buying a Medigap policy to fill in holes in Medicare coverage." Only four states require Medigap insurance to be issued: New York, Connecticut, Massachusetts and Maine.

Why would you want to switch? "If you have an Advantage plan that has a drug benefit built in as part of the coverage but you believe you can do better with another plan’s drug benefit, then you might want to do the math," Lieberman writes. "Too many consumers fail to do their shopping for the drug benefit."

Here's another reason: "Research is beginning to surface that shows Medicare beneficiaries with high medical needs may have trouble accessing care in some Medicare Advantage plans. Medicare defines those with high needs as people who have three or more chronic diseases and a functional limitation in activities of daily living or in performing routine daily tasks.

The inspector general of the Department for Health and Human Services "reported last fall that those with Medicare Advantage plans sometimes had trouble getting claims paid under those plans, or they reported other problems getting help from the plan," Lieberman writes.

Flood insurance rates in coastal areas are going sky high, as more homes are being added as flood risks

"A new law meant to stabilize the federal government's money-losing flood-insurance program is starting to send rates sky high, prompting a growing backlash in coastal areas," especially in rural areas, Siobhan Hughes reports for The Wall Street Journal. "The Biggert-Waters law, enacted in 2012 before superstorm Sandy hit the Eastern seaboard, requires that government insurance premiums for the 5.6 million property owners in flood-prone regions be set at a level that better reflects the full risk of flooding. It was prompted by cumulative losses that had ballooned to $24 billion for the National Flood Insurance Program.

One property owner, Bill Bubrig, of Plaquemines Parish, Louisiana, in the state's southernmost parish, where the Mississippi River meets the Gulf of Mexico, "estimated that flood-insurance premiums on his home will increase from $633 to $28,000 a year, with a big chunk of the increase hitting as early as 2014," Hughes reports. "The changes mean some owners must retrofit their homes or businesses—by raising buildings higher above the ground and taking other measures—to better guard against flooding, or pay rates that could surge to $10,000 and higher a year. Vacation homes are subject to new insurance rates starting this year, while primary residences already subject to flood insurance will get new rates in phases." (Journal photo by William Widmer: Burbig at his home)

To make matters worse, the government is "redrawing flood-zone maps that will classify more properties as flood risks," Hughes writes. "To soften the impact, some members of Congress are asking the Federal Emergency Management Agency, which administers the federal flood insurance program, to delay implementing parts of the law while lawmakers consider changes to limit premium increases."

But opting out of flood insurance isn't an option for most residents, "since flood insurance is mandatory for properties with federally insured mortgages," Hughes writes. "And there is little people can do to lower premiums shy of elevating properties, which likely would cost multiple tens of thousands of dollars." (Read more)

Kentucky, Maryland, Washington tell health insurers to resume selling children-only policies

Kentucky Insurance Commissioner Sharon Clark has ordered health insurers to resume sales of child-only policies effective Jan. 1, saying their refusal to offer such policies violated state law in that it unfairly discriminated against some children. Top insurance regulators in Washington state and Maryland have taken similar steps to force health insurers to offer the policies.

The nation’s health insurers stopped selling new child-only plans in advance of the federal health reform law's Sept. 23 deadline requiring them to disregard pre-existing medical conditions on policies for children under the age of 19. Previously, insurers could refuse coverage for sick children.

Insurers have argued that companies that choose to offer the policies will have to assume the cost burden of covering a disproportionate share of sick children. Also, they argue, if a child cannot be turned down for coverage, some parents will delay buying coverage. For a story from The Courier-Journal of Louisville, click here.