Oklahoma Tornado Not Going to Affect Florida Insurance Rates

May 25, 2013
By Law Office of Eric H. Luckman, P.A. on May 25, 2013 11:56 AM |

All Americans feel for Oklahomans right now, and our Florida property insurance lawyer feels compassion for those affected by the devastating tornado. But for those in our state struggling to pay already high insurance costs, it will be a relief to know aggressive insurance companies can't use the tragedy of the Oklahoma tornado to jack up insurance rates in Florida.gavel.jpg

Bob Hartwig, the president of the Insurance Information Institute, reminded reporters recently that by law insurance companies have to set rates based on the costs involved in doing business in that particular state. But he did note that after a major natural disaster, like a tornado or hurricane, the question is usually about the cost of reinsurance, which is what insurance companies buy to try to help with payments to policyholders after these natural disasters. But, Mr. Hartwig said that even at the highest estimates of the losses in Oklahoma, which are possibly above $2 billion, wouldn't have an impact on the reinsurance market. He pointed out that $2 billion is only one tenth of the damage caused by Hurricane Sandy last year.

Natural disasters cause massive amounts of damage. Last year, just tornadoes and thunderstorms caused $15 billion in damage. And in 2011, it was above $25 billion due to two horrible tornadoes, one in April that hit Alabama and one in May that hit near Joplin, Missouri. Oklahoma is one of the top five natural disaster prone states, but is not ranked as high as Florida because of our yearly threat from hurricanes. In terms of your own personal homeowners insurance, as summer approaches and with it hurricane season, it is important to remember that standard homeowners insurance usually covers wind damage, also from tornadoes or thunderstorms. But floods need a separate policy, which is possible through government run options like the National Flood Insurance Program.

All of this comes at a time when insurance rates are increasing in Florida anyway. Even though Florida itself has not had a major hurricane in eight years, the insurance rates keep going up, and are exacerbated by the problems with state run Citizens Property Insurance. Lynne McChristian from the Insurance Information Institute asserted that higher rates right now don't have much to do with hurricane damage, but the cost of other water damage, like burst pipes, and the high cost of building materials used in things like drywall.

Regardless, when devastating incidents occur, having good insurance protection means a lot. Even if it can do nothing about all of the irreplaceable things lost, it can give significant peace of mind to know that you can rebuild. So if a horrible event has occurred but your insurance company is refusing to give you the benefits you are owed, contact a Florida insurance attorney to learn about your options. In Florida, if you proceed with a case and you succeed the attorney's fees will automatically be the responsibility of the insurance company. So no matter the size of your claim, you would get to keep the court award.

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