Rob Hoyt, chair and professor of risk management and insurance in the Terry College of Business, discussed a changing insurance market with the Savannah Morning News.
Storms are increasing in frequency and severity, leading to more flooding events than ever seen before on Georgia’s coastline. Now, homebuyers have to factor in the price of flood insurance when choosing a home.
Hoyt said that insurers are also thinking about flooding and how it is going to cost Georgians.
“One thing that’s important to understand is that we’ve seen multiple years of increasing catastrophe, losses that have impacted the insurance industry, and certainly the people that are exposed to those events,” Hoyt said.
He explained that when companies insure a home, they are assuming that in the event of a flood they will be paying out funds. This means that many companies are expecting to pay more as the incidence of extreme flooding increases. Flooding isn’t covered in regular home insurance, so Georgia homeowners will need to budget for the added cost.
Hoyt said that some companies are going through reinsurance. That means the insurance companies themselves buy insurance to transfer partial risk to another company. While this diversifies the risk for the companies, this is likely to make insurance more expensive for all Georgians in the long run.
