Residents of tornado-prone Oklahoma already pay some of the highest rates for homeowners insurance in the nation — and rates are only going up.
It's not uncommon for insurance companies to raise rates in a region after a catastrophe like the tornadoes that hit Oklahoma in May, said Amy Bach, executive director for the consumer nonprofit United Policyholders.
“As consumer advocates, we often feel that there is an overreaction there by the insurers,” Bach said.
Since May 20, when an EF5 tornado tore through Moore, 19 insurance companies have filed rate increase notices with the Oklahoma Insurance Department. The rate increases range from 5.4 percent to 40.6 percent for homeowners insurance.
However, these increases are routine and probably have more to do with weather-related losses in previous years than the May tornadoes, said Kelly Collins, spokeswoman for the Oklahoma Insurance Department.
“It takes insurers a long time to analyze the effects of a catastrophe and to determine how they should adjust,” Collins said.
“The rate increases, which happen all through the year, are indicative of what the company experienced in years past, not current conditions.”
Insurance companies have to regularly assess their loss ratio and what their overall expenses are in a region and change rates in reaction to those calculations, said Frank Stone, chief actuary for the Oklahoma Insurance Department.
For comparison, 25 companies filed rate increases in Oklahoma ranging from 4.2 percent to 35.3 percent in the first five months of the year leading up to the May 20 tornado.
Full Story at TheOklahoman.com.
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