Your insurance premiums are rising and you can thank climate change.
Climate change is destabilizing the insurance industry, causing uncertainty around risk prediction and creating a crisis of confidence.
Businesses should consider climate adaptability to lower their premiums, as growing risks from climate change and rising reinsurance costs are causing insurers to raise premiums and pull out of markets, leaving business and homeowners with fewer choices and less protection.
The cost of insuring commercial properties will likely continue to rise in the coming years as the risks become more severe. Extreme weather events like hurricanes, wildfires, and floods are putting properties to the test. As the frequency and severity of extreme weather events increase, insurers face more property damage claims; at best, they are raising their rates, and in some instances, they are choosing not to offer coverage in select areas. In the US alone, a recent survey found that 90% of insured homes had seen an increase in premiums, with the steepest increases in disaster-prone states.
Reinsurance companies have been withdrawing from high-risk areas impacted from wildfires and floods, driving up prices and pushing insurers out of high-risk markets. This trend is increasing the number of state-run insurance plans, which cover people who cannot buy insurance from a company. The Senate Budget Committee held a hearing in late March of this year (2023) highlighting the various ways climate change is hurting property insurers and triggering dangerous growth in state-run insurance plans, and that impact on the federal budget.
As a distributor, it’s more important to be proactive about sustainability now than ever. Insurers use sophisticated climate models to assess risks and identify areas with higher risks of climate-related damage. As a result, they are charging higher premiums for properties in those areas and requiring more comprehensive risk management plans from commercial property owners.
By investing in sustainable building practices and materials, your business can demonstrate its commitment to mitigating the impacts of climate change on its properties and more importantly, minimize your risks. While building with more resilient materials can cost up to 50% more than conventional ones, Double Green’s Climate Adaptability consulting will ensure your business has the information to make sustainable upgrades with the best returns. We can enable your business to stay at the same location and avoid being denied insurance coverage or facing higher premiums. Additionally, we provide guidance on relocating facilities to less risky locations within a territory by considering incentives, impacts and infrastructure.
Ultimately, the increasing costs of insuring commercial property reflect the significant financial risks associated with climate change. As a distributor, acting now to mitigate those risks can reduce insurance premiums and ensure your business’s longevity and resilience. Don’t wait – work with Double Green on a Climate Adaptability plan for your business contact us [email protected] 307-855-1342
