How Mississippi Insurance Companies Can Adapt to Rising Severe Weather
STARKVILLE, Mississippi (WCBI) – The National Weather Service has confirmed that 15 tornadoes touched down in Mississippi on April 13, leaving extensive damage in their wake.
As the state continues to weather a stormy spring, Mississippi Insurance Commissioner Mike Chaney said he expects insurance rates to rise to around 6%.
“We understand the price pressure,” says Chaney. “If you’re on a fixed income it’s tough when you get a raise and we’re looking at these huge raises coming for the national flood insurance program.”
According to the NWS, Mississippi leads the nation with 422 reports of severe weather so far.
“The biggest effect on rates happens to be hurricanes, not tornadoes,” Chaney said. “Tornadoes are very destructive but small. Hurricanes are very huge and large.
On Thursday, Dr. Kieran Bhatia gave a presentation as part of the Mississippi State Insurance Day program titled “Climate Change and Severe Weather: Implications for the Insurance Industry.”
“The Gulf of Mexico and coastal states have some of the highest sea level rise measurements in the world,” he says. “So that’s something that’s really important to understand is that coastal erosion, flooding from high tides and hurricanes becomes much more likely in those places.”
Dr. Bhatia is the vice president of Climate Change Perils for Guy Carpenter, with a doctorate in meteorology and oceanography. He explained how studying the ongoing changes in the Earth’s atmosphere can help predict the likelihood of severe weather events in a given part of the country.
“If you don’t understand the likelihood of an extreme event occurring and the danger you are most exposed to, you will not be prepared for those dangers,” says Dr. Bhatia.
One such proactive measure is asking insurance companies to offer homeowner discounts with incentive programs.
“Offer discounts and people would come in and fortify their homes,” Chaney says. “Things like chopping that wood, like making sure the roof is in good shape. This incentivizes you to give a discount to the consumer.
The Mississippi Department of Insurance says at least a dozen insurance companies on the Gulf Coast offer incentive programs and expects them to spread north.
“With losses on the rise, it’s so important that we have insurance as protection when these big events happen,” says Dr Bhatia.