WCCO Minneapolis followed up on the New York Time’s recent blockbuster article on home insurance and climate risks, and confirmed that home owners in the midwest are now clearly at risk from rising losses due to increasing storm damage from climate pumped extremes.
Hail damaged the roof of Dr. Brandi Mace Storm’s home near Des Moines last year. After months of haggling, her insurance company, Pekin, sent a check to cover the repairs. Before she could get the repairs done, Pekin dropped her, along with all of its 40,000 homeowners insurance customers in Iowa.
Trying to find a new company to insure a house with a damaged roof was a challenge, said Dr. Mace Storm, a dentist.
Severe weather combined with the rising costs of rebuilding is “making it unprofitable for us to successfully operate in that state,” said Susan Crisler, a spokeswoman for Pekin.
Others have been hit with sharp increases in their premiums. Tim Kuehner, a general contractor whose home just outside of Marshalltown was also damaged in the 2020 derecho, saw his annual premium jump to $9,189 this year from $6,453, a 42 percent increase.
In neighboring Minnesota, the home insurance industry has lost money in six of the last seven years, and those losses are growing. Insurers there are also pulling back, according to Tony J. Larson, senior vice president of personal lines coverage at Christensen Group Insurance, a brokerage.
Since last summer, 10 of the 25 insurers he works with that traditionally offer homeowners coverage, including Travelers and Nationwide, “have halted or made it near-impossible to place a new homeowners policy,” he said.
A spokeswoman for Travelers, Chesleigh Fowler, said in a statement that the company continued to write and renew homeowners insurance in Minnesota, adding, “we monitor our risk exposure and make adjustments as needed to ensure we are operating responsibly.” Nationwide did not respond to requests for comment.
Other Midwestern states are facing similar pressure. Pekin says it has “paused” writing homeowners insurance in Illinois, Indiana, Ohio and Wisconsin, citing the increased frequency and severity of storms. Secura is dropping customers in Illinois, Indiana and Michigan.
The homeowners insurance market in each of those states has become unprofitable, according to AM Best data.
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